If you’re one of the many people who planned to buy a home in 2020, the coronavirus pandemic probably has you wondering whether or not now is still a good time. Efforts to stop the spread of COVID-19 have created a pause in the U.S. economy as people stay at home and practice social distancing. But it’s important to remember that this economic downturn is starkly different than the Great Recession of 2008, and that now is still a great time to buy a home. Here’s what you need to know.
This is not like the Great Recession
The last time the U.S. economy took a downturn was during the Great Recession. However, this slowdown is very different than the one we experienced at that time. The Great Recession was an economic downturn that developed slowly over time and was primarily caused by problematic lending practices in real estate. The economic downturn that we’re currently experiencing came on quickly and is in response to a temporary situation. Leading experts forecast that the economic downturn will have a V-shaped trajectory, meaning that the decline in the first half of 2020 will be followed by a quick recovery in the second half of 2020.
Even though stay-at-home and social distancing orders have been enacted, it doesn’t mean you can’t still search for and buy a home. While you may not be able to schedule in-person viewings of homes, you can still see them virtually. Many real estate agents are offering virtual home tours, and other aspects of the closing process have moved online. Appraisals, attorney consultations, and document signings are all happening digitally. While the real estate market has been slow to embrace technology in the past, the pandemic has fast-tracked this process out of necessity.
Mortgage rates may hit record lows
With the fed cutting interest rates, homebuyers have an incredible opportunity to secure mortgages with rock-bottom interest rates. The week before the global pandemic shook the U.S. stock market, the average rate for a 30-year fixed-rate mortgage was 3.29 percent – the lowest ever recorded. Some economists believe that the rate could go as low as 2.75 percent during the crisis. If you’re thinking about buying a home, then now could be one of the best times to get a loan.
Down payment assistance programs are still available
If you’re a first-time homebuyer in need of down payment assistance, many programs are still available during this health crisis. Many providers are moving their educational resources online and processing applications from remote offices. Research the types of programs that may be available in your location, and give yourself extra time to complete the process.
Get pre-approved for a mortgage
Finally, you’ll want to make yourself as attractive as possible as a buyer. For this reason, it’s essential that you get pre-approved for a mortgage before making an offer on a home. This shows the seller that you’re serious about the purchase, and it can speed up the closing process. It’s easy to get pre-approved online.
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