The economic uncertainty has people wondering how the real estate market will unfold as we navigate through this pandemic. For many it was quite a bit different from what is normally a busy spring market where things were somewhat put on hold during lockdowns. However, as things have begun to reopen there has been a surge in mortgage applications for new purchases already.
According to data shared by the Mortgage Bankers Association applications were up for the first time in over two months as buyers looked to lock in extremely low rates at the end of May.
“This is a bit of a bigger rebound than I expected,” says realtor.com® Chief Economist Danielle Hale. “It’s a sign that we are going to see a delayed seasonal bump in home sales. There’s pent-up demand from people who weren’t able to get out in the early part of the spring, and we’re seeing that [materialize] now.
As regions are starting to loosen up restrictions and people are becoming more accustomed to safety precautions serious buyers are seeking to pick back up with their home searches and take advantage of the low rates. Some markets will see a slower pace than others while there still remains to be a lack of inventory. While low mortgage rates are encouraging buyers, sellers need to catch up with putting their homes on the market for sale. With the void of inventory buyers should prepare to enter a competitive landscape when they begin their searches. This in turn could yield higher home prices this summer as there could be more buyers active in the market than homes for sale.
“Given the strength of this recovery, home prices will probably rise about 4% to 6% in 2020,” predicts National Association of Realtor’s Chief Economist, Lawrence Yun.
Despite the signs of strength in a boost that we are seeing, it is still early to make any call for how things will unfold as time goes on. We will see how things unravel in real time, but for now seeing an uptick in activity is most definitely a good sign.