July 2020 Real Estate News
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In this month’s July 2020 Real Estate News learn the top five tips for staying productive while working from home and home improvements that give the highest return on investment. Discover three ways to keep pests from moving in and read how shopping locally helps the community. Also in this issue, check out how record low mortgage rates are enticing first-time home buyers. All of this and more in the July 2020 Real Estate News.
Record-Low Mortgage Rates Entice First-Time Homebuyers
The coronavirus pandemic has had a significant impact on the housing market, with social distancing lockdowns disrupting home sales in most states from mid-March through April. However, the pandemic is not deterring some buyers; according to the National Association of Realtors (NAR), first-time buyers accounted for 36% of all sales in April, up from 34% a month earlier. According to the NAR “2019 Profile of Home Buyers and Sellers,” first-time buyers were responsible for 33% of all sales in 2019. Individual investors and second-home buyers—two groups who typically account for cash sales—also saw potential in the market, purchasing 10% of all homes sold in April.
Mortgage Rates Near Historic Lows
First-time buyers are entering the housing market due in large part to advantageous mortgage rates. For the last full week in May, the 30-year fixed-rate mortgage averaged 3.15%; this is the lowest rate ever recorded in Freddie Mac’s “Mortgage Market Survey” over the past 50 years. According to Sam Khater, chief economist for Freddie Mac, “These unprecedented rates have certainly made an impact, as purchase demand rebounded from a 35% year-over-year decline in mid-April to an 8% increase as of last week—a remarkable turnaround given the sharp contraction in economic activity.” He added that refinance activity remains high, and the average loan size of refinance borrowers this year has declined $70,000 due to the low mortgage rates. This indicates that a broad base of borrowers refinanced while mortgage rates were in record low territory, a situation that will ultimately benefit the economy. Despite a recent rise, mortgage rates are expected to remain at record lows; for the week ending June 4, 2020, the 30-year, fixed-rate mortgage averaged 3.18%. According to Lawrence Yun, chief economist for the NAR, record-low mortgage rates “will be the key factor driving housing demand as state economies steadily reopen. Still, more listings and increased home construction will be needed to tame price growth.”
July 2020 Real Estate News
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