Is 2020 a Good Time to Buy a House?

2020 has been an eventful year, to be sure. Along with the COVID-19 pandemic, there have been protests, earthquakes, wildfires, and so much more. This is why it is no longer surprising that most countries are entering a recession, with many people losing their jobs and the world market on a downward spiral. One of the industries that have been thoroughly affected is the real estate market. Due to global events, many people believe that this year is the right time to buy a home. Let’s find out why: 

House Prices Have Weakened Since 2017

While there’s been a multitude of events this year, the fluctuation of housing prices has been ongoing since 2017, according to the Federal Reserve Economic Data (FRED). Seeing as many are uncertain of their employment status, fewer people show up for open houses. This scenario presents an opportunity for those lucky enough to have set aside a budget for buying a home. 

Based on the numbers before 2006 ended, median sales prices went down from US$255,000 to US$210,000 – dropping an enormous 17% in just a span of two years. While prices rose from 2009 to late 2012, they plunged again in the fourth quarter of 2019 by 9%. The general forecast is that home prices will continue downhill until the end of this year before picking up in 2021. 

Mortgage Rates Are at an All-Time Low

2018 was significant for posting its highest mortgage rates in years. Before COVID-19 hit, mortgage rates declined steadily by 1% across different mortgage types. Due to the pandemic, mortgage rates will continue to remain close to 3% for the next 18 months or so. Taking advantage of such rates is ideal, especially for first-time homebuyers. To make sure you’re not going to end up in hot water with your repayments, using a reliable mortgage loan calculator is a good idea. You need to make sure you can afford your monthly repayments without fail.

The Stock Market Remains Resilient

While many businesses have struggled to keep their operations running, a number of enterprises were able to weather through 2020 due to the strong stock market. Based on the numbers of the S&P 500, the economy can still do well, and investments such as real estate would have steady returns within the next few years. This is especially true now that most are looking at real estate investment trusts (REITs) as many choose to diversify their portfolio. 

Presidential Elections Will Happen

Another good thing that 2020 will bring is the presidential election. Many are clinging to the hope that the election will bring about positive change. During election seasons, most politicians try to prove themselves by doubling their efforts to increase the economy’s health. Actions can be passing regulations that would ease up their constituents’ pockets or tighten the implementation of existing laws. 

Increasing Rental Rates

People usually resort to renting because of the enormous rates that they have to pay associated with owning a home. Nowadays, many are realizing that renting a property is rapidly becoming a more expensive option for their housing. Many previous renters are now considering buying their own home and enjoying the low mortgage rates rather than paying for high rental rates for a home that they don’t own. Considering all these facts, you should carefully examine how effective it would be for your savings to buy a home in 2020. Start going to open houses if one is available in your area. Look at your options and negotiate. Once you’ve got everything settled, you can start moving with reliable movers like Rainbow Movers to take care of your stuff. Make sure that once you are out, you practice safety precautions.