While COVID-19 has suppressed quite a bit of economic activity across the board, there are indications that the housing market remains healthy. In fact, some analysts are predicting that home values could climb during 2020.
Even with coronavirus to deal with, the reality is that many homebuyers still need to move forward with their purchases and are finding ways to do that even while observing social distancing. For example, house tours can be conducted virtually.
CNBC reports that Matthew Pointon, property economist at Capital Economics, said, “Our expectation that home sales will bounce back in the second half of the year as the economy begins to improve will also prevent a substantial fall in prices. But it will take time for household incomes and savings to recover.”
CNBC also quoted Lawrence Yun, chief economist at the National Association of Realtors, as saying that home values “are likely to squeeze out a gain in 2020 to a new record high.”
Yun’s predictions were not uniform across the housing market. He expected differences in price increases or decreases in different geographic areas. Also, he predicted different outcomes for various price bracket, with an expectation that home values at the upper end may still decline. But overall, the increase in home prices could be around 1.3% if his predictions prove correct.
Even though demand for housing remains surprisingly high at this time, supply has dropped. This appears to be one of the main factors which is maintaining home values during the outbreak.
Nevertheless, there is still some margin for error with these positive predictions, and not every analysis paints such a rosy portrait of the near future. CNBC states that Zillow, for example, expects a 3-4% decline in housing prices this year has about a 25% probability of occurring. They do not expect housing prices to rise again in such a scenario until late next year.
There is still a lot we cannot predict about what lies ahead concerning coronavirus. So, it is difficult to make confident predictions about the economic ramifications in either direction.
Regardless, if you are in the market to purchase a home, there are many great opportunities out there. This is an excellent time to lock in a low mortgage rate. In fact, CNBC also reported just today that mortgage rates have hit another record low. So, this is also an ideal time to refinance to save on your home loan now and in the future.
I can help you move forward with a home purchase or refinance at this time. To schedule a consultation, please give me a call today at (619) 857-7191. Let’s take advantage of today’s low mortgage rates.