How the COVID-19 Pandemic Is Affecting the Housing Market
In times of economic uncertainty, many homebuyers ask, “What is the housing market doing right now?” Depending on where you are in the homebuying process, mortgage rates, COVID-19 and down payment assistance programs are intersecting to provide unique opportunities and challenges.
Effects on Mortgage Rates
Interest rates may drop, which can significantly lower your monthly payment on a 15- or 30-year fixed-rate mortgage. However, these rates may fluctuate in ways that they may not when markets are more stable. Keeping an eye on rates at least once a day, doing comparison shopping and working with a mortgage broker can help you get the best rate possible.
It’s important to remember that lenders become more cautious about approving mortgages when there has been widespread job loss and a decline in investment income. Be sure you’re prepared to meet with your lender about mortgage preapproval by compiling your personal financial information ahead of time. Doing so will help demonstrate your suitability and could help you quickly lock in a lower mortgage rate.
Effects on Down Payment Assistance Programs
Wondering how coronavirus and housing market uncertainty is impacting down payment assistance programs? The good news is that they are still up and running, with homebuyer education programs becoming available online, so you can complete your requirements at home. Special accommodations are also being made to allow for electronic closings (e-closings) and the use of electronic signatures (e-signatures) on loan documents. On the other hand, expect delays in application processing due to more program administrators dealing with remote workers and staff shortages.
Effects on How You Look at Homes for Sale
Real estate agents and home sellers are taking special measures to meet the challenges of the COVID-19 crisis and its effect on housing markets. To help their clients see houses for sale, more and more real estate agents are posting virtual home tours on their websites or YouTube channels. Real estate agents can also perform virtual walk-throughs using their smartphones, allowing buyers to view homes and ask questions in real time.
If an in-person walk-through is required, real estate agents are taking extra measures to ensure the health and safety of their clients. This may include sanitizing properties between viewings, restricting viewing hours and providing buyers with personal protective equipment when they arrive.
Effects on the Inspection, Closing and Moving Process
- Inspections can still happen. Home inspectors may request special considerations and may decline to deliver an in-person report. You should also ask home inspectors what precautions they are taking to mitigate any possible risk factors.
- Closings can happen with special allowances being made to reduce the number of people in the room. Also keep in mind that real estate agents, escrow officers, attorneys and closing agents may be dealing with reduced staff and shorter office hours, so normal processing may take more time than usual.
- Moving is still possible but could be affected by state and local restrictions on travel and gatherings. If you’re using a moving company, check in advance to see what restrictions may be in place and what steps they are taking to ensure the health and safety of both their movers and your family.
Find a Travelers Representative
Once you’ve closed on your new home, you’ll need to find the right coverage. During uncertain times, we’re ready to help you protect your home and the things you care about the most. Find a Travelers representative near you to learn more about homeowners insurance.
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