As the weeks go on, we are seeing more and more buyer activity in our local markets.
In the past two weeks, One + Company had over 100 buyers reach out with questions about specific properties. And in recent a survey conducted by LendingTree, 53% of buyers said they are more likely to buy a home within the next year than before the pandemic hit.
What’s causing buyers to act now, when the economy is in a recession?
Low Mortgage Rates
Historic low mortgage rates are a driving force behind buyer momentum. Not only are mortgage rates low now, but they are predicted to remain low into 2021, as projected by FreddieMac’s Quarterly Forecast.
“While the rebound in the economy is uneven, one segment that is exhibiting strength is the housing market. Purchase demand activity is up over twenty percent from a year ago, the highest since January 2009. Mortgage rates have hit another record low due to declining inflationary pressures, putting many homebuyers in the buying mood. However, it will be difficult to sustain the momentum in demand as unsold inventory was at near record lows coming into the pandemic and it has only dropped since then.” – FreddieMac
Increase in Savings
Over 30% of buyers surveyed stated that they have been able to save money throughout the pandemic, increasing their down payment. For those who have remained employed, reduced spending has enabled them to review finances, cut back on unnecessary expenses, and put extra money into their home savings.
Home Reevaluations
Spending additional time at home over the past few months has made a lot of people evaluate their living situation. The housing market around major cities – including New York – is booming. Many buyers are in search of larger outdoor living spaces, additional square footage, or a home office. Those who will continue to work from home are reconsidering city living.
Thinking of Buying this year?
While some buyers stated that dropping home prices was a factor in their current home search, we have not seen a drop in home values in Connecticut – so don’t expect to go in with a lowball offer. However, the low mortgage rates will help you save on your monthly payment.
Make sure you have your finances and paperwork in order, meet with a mortgage lender, and be prepared to act quickly! Working with a buyers agent who is skilled in negotiating is essential in securing a property right now.