Coronavirus fears apparently haven’t scared everyone out of the housing market.
Bucking dire predictions following a laboriously slow week, mortgage applications were up better than 15% for the week ending March 27, 2020. Refinancing was up 26% for the week, and 168% higher than the same week of 2019.
The previous week, mortgage apps took a 30% dip as the reality of the COVID-19 pandemic began to grip the nation. The bleaker economic outlook from the massive shutdown of many public businesses, along with the first wave of realized job losses, likely caused plenty of potential home buyers to pull back.
Mortgage rates and applications also experienced significant volatility. But after two weeks of sizable increases, mortgage rates dropped back again to near-record lows.
With a significant number of workers hopeful their job situation is safe as they move their work spaces home, mortgage lenders who have the requisite technology will be better positioned to work with consumers who are increasingly interested in taking buying and selling to virtual platforms.
Bay Equity can guide you from application to closing, with almost all of the process conducted from your own couch.
The spring shopping picture still isn't entirely rosy. The stock market shock caused by the arrival of the virus, plus the Federal Reserve’s quick move to cut its own interest rates will impact every step of the process from here on in. Your local Bay Equity loan officer understands the changing landscape of the housing market and will keep you informed and educated every step of the way.
But some things don’t seem likely to change. One of those is hot competition. With inventory at its lowest in decades, many buyers will likely still have to deal the possibility of a bidding war.
Despite the health risks and movement restrictions, demand is very strong. Interest rates are expected to remain low enough that monthly payments are affordable, despite the higher prices.
In the most competitive markets, buyers are going to extreme lengths, coming in way above the list price, with a large down payment, or even removing all their appraisal and loan contingencies.
Unless a lot more inventory hits the market soon, this spring and summer could be very interesting.
Based on data from agents selling homes in the last two years, there are still a handful of strategies which may improve a homebuyer’s odds in a bidding war.
• Offer all cash or mostly cash.
• Write a personal letter to the seller: Improves a buyer’s odds by 59 percent, up from 52 percent in 2017.
• Waiving financing contingency: Improves a competitive offer’s likelihood of success by 20 percent.