As interest rates continue to severely fluctuate in today’s mortgage market, you may be one of the many people wondering if now is the right time to buy that new home or refinance a current mortgage. Obviously, nothing is certain these days as our country finds itself in the midst of a pandemic.
If you’re intrigued by low mortgage rates, but are feeling unsure about what to make of the housing market given the impact COVID has had on its environment, here are a few key facts, each with pros and cons, to help provide some guidance when it comes to the decision making process.
1. The Buying Market is Extremely Active
The need to sell a house is a common complication when on the lookout for a new home. As the pandemic continues to unfold, many sellers are removing properties from the market (or choosing not to list them at all) which has made inventory tight in today’s mortgage market. This not only makes it possible to sell your current home at a higher price but also more quickly. According to a recent report issued by Redfin, many people have moved away from larger cities as the result of COVID leading to higher demands for new homes than we are used to experiencing. Conditions swaying this trend could be due to more professionals working remotely or people simply being interested in escaping crowded locations.
With higher demand and lower supply, selling certainly becomes easier. Then there is the other side of the coin to consider in that you could be paying a premium price for a new home. As of the week ending June 20, 2020, Relator.com reported year-over-year median listing prices have grown by 5.6% which is more than a percentage point above the pre-COVID pace.
2. Interest Rates Remain Low
Pandemic-induced uncertainty has led wary investors to pour money into Treasury bonds for safer keeping, causing bond interest rates to plummet. Mortgage rates are therefore lower today since they tend to track the yield on the 10-year Treasury note. In addition, policies set forth by the Fed have played a role in keeping them compressed. According to Freddie Mac, the rate on a 30-yr. loan was 2.9% and on a 15-yr. loan was 2.4% as of September 24, 2020. Obviously, no one has a crystal ball to predict which direction rates will go from here. Simply food for thought as rates remain low as of today.
3. The Lending Process Has Changed
We’re in a new world where so much has changed. Viewing properties virtually and conducting digital loan closings are likely scenarios in today’s mortgage market. When they’re in-person, expect to wear a mask and gloves. In terms of timelines, the appraisal process may take closer to 3-weeks as opposed to the typical 7-10 day turn-times. Title and closing companies are also backlogged as both purchase and refinance transactions have increased with homeowners seeking to take advantage of low rates, so it would be reasonable to anticipate closer to 10-15 days versus the normal 1-week process.
What are the answers for you? Well, it depends on your questions. The Mortgage Department at West Town Bank & Trust is committed to finding the most suitable loan program available to you at the lowest rate possible. If you’re ready to buy or refinance a home, let’s talk about the uncertainties and the opportunities specific to your situation.
Please call me at (252) 339-0933 or send me a note at [email protected] to learn more.
About West Town Bank & Trust
At West Town Bank & Trust, our most important goal is to understand what’s important to you, what’s getting in your way, and what you hope to achieve, so we can help you get there. Since 1922, we’ve been creating long-lasting relationships with our customers based on old-fashioned values and future-thinking ideas. Whether solutions come from surprisingly innovative tools or trusted products you’re familiar with, our single-focused purpose is your financial well-being.
Whether you’re purchasing your first home or refinancing an adjustable rate mortgage, it’s our commitment to find the most suitable loan program available to you at the lowest rate possible. With hundreds of programs available, let us help you unlock the feeling of home today.
About the Author: LeAnn Whitley (NMLSR ID # 1601190) has been a Mortgage Loan Officer at West Town Bank & Trust for nearly 4 years where she has a demonstrated history of working with multiple loan types, including VA Loans, USDA, FHA, and numerous types of conventional loan programs. Her mission is to help clients find the best loan program based on their unique needs and get them pre-qualified to purchase or refinance their dream home. She is relentless in ensuring her clients meet their closing dates and experience a seamless process. Apply Now with LeAnn!