As weeks under social distancing restrictions turn into months, few Americans have been shopping for new homes. Individuals who were thinking about moving before coronavirus became an epidemic may be unsure how to proceed, especially when a new job or other circumstances mandate relocation. These are the predictions experts have made so far about how COVID-19 might affect the real estate market.
Less Market Interest
The Curbed blog reported a 40% decrease in online traffic to real estate sites like Zillow and Redfin between February 2020 and April 23, 2020. Early April saw a decline in mortgage applications by nearly 18% per week according to Curbed.
Fewer New Listings
Curbed also reported 70% fewer listings in cities most impacted by COVID-19, including San Francisco and New York. Greater Nashville REALTORS noted inventory of 9,677 Nashville homes on the market, compared to 11,276 in March 2019, just slightly less than the 15.7% nationwide decline in inventory reported by Builder Magazine.
However, the association also reported that home sales in the Music City in March 2020 showed a 3.4% increase over March 2019, with a 9.1 increase in sales for the first quarter of 2020 compared to the first quarter of 2019.
Lower Mortgage Rates
The National Association of REALTORS reported a 3.29% available rate for a 30-year fixed mortgage, representing an all-time low. What’s more, the rate for a 15-year fixed loan is below 3% for qualifying consumers. As a result, many with good credit may attempt to make a move regardless of COVID-19.
Tighter Mortgage Restrictions
As interest rates decrease in the wake of federal cuts, lenders have made it more difficult to qualify for favorable mortgage terms. According to Housing Wire, Chase now requires all home buyers to have a 20% down payment and a credit score of at least 700 to qualify for a mortgage, with the exception of specific programs for borrowers with low to moderate incomes. Other lenders have reported requiring additional employment checks before closing a loan.
In Tennessee, residential and commercial realtors are considered essential services under state law. Those searching for a home in the Nashville area can explore our available properties and arrange for a virtual or in-person tour. Contact us online or call 615-297-7711 to connect with the team at HND Realty LLC today.