It’s summer and in a normal year, that means movement. Parents typically wait until summer to buy new homes and move because they don’t want to displace their children during the school year. But like everything in our lives right now, has COVID-19 had an impact on new home purchases?
Surprisingly, it appears that home purchases are quickly ramping back up and prices have not suffered during these odd times. In fact, the Mortgage Bankers Association’s Builder Application Survey data for May 2020 has shown applications for new home purchases have increased by 10.9 percent compared to a year ago. Compared to April 2020 alone, applications rose by 26 percent.
Low Mortgage Rates Have Spurred New Home Purchases
Our current historically low-interest rates have spurred new home purchases as well as refinances. The Mortgage Bankers Association has reported an annual increase nationally in refinance applications at 106 percent. And home purchases are rising.
Joel Kan, the Mortgage Bankers Association Vice President of Economy and Industry Forecaster said, “Homebuyer traffic is rising, and homebuilders are continuing to ramp up production following the COVID-19 pandemic-related restrictions. We expect to see additional near-term strength in the coming months from the resumption of delayed sales activity caused by the social-distancing and stay-at-home orders during March and April.”
California Homebuyers Seem Eager to Move Ahead
Here in California, although sales fell sharply in March and April, home prices have shown no letup. And in the Bay area alone, buyers and sellers seem eager to move ahead, despite cautiousness about health risks. Prices pushed higher again in April, especially for single-family homes. These numbers have rivaled the height of the housing boom in 2017 and 2018. As fewer homes went on the market, the ones that were available were quickly snatched up.
Realtors Are Pleasantly Surprised
A month ago, things were quiet, and the housing market virtually shut down. But in the past few weeks, business has picked up due to the great interest rates as well as relaxation of some of the distancing rules and a pent-up desire to get back to some sense of normalcy. Despite the process becoming a bit more complicated with new COVID-19 disclosures and needing to do many things virtually instead of in person, people still want to buy homes.
Prices Have Sustained
Real estate agents, themselves, are surprised that prices have sustained during restricted showings and transactions during the pandemic. And they are seeing some new trends in buying habits. According to the National Association of Realtors, people are now seeing a great opportunity to take advantage of today’s extremely low interest rates and feel this is the time to get away from renting. They are reporting a larger number of unmarried couples and roommates buying homes together.
Call a Professional
If you are considering purchasing a new home or refinancing your current mortgage, the certified Stockton mortgage brokers at H.O.M.E. Lending are here to help. We provide professional mortgage services throughout the state of California and would be glad to answer any of your questions and provide you with a free prequalification. Call our professional team of California mortgage brokers at (209) 477-0262.