A once-in-a-century pandemic may seem like a strange time to buy a home, but many Americans have decided the timing is just right. Driven by low mortgage rates, increased teleworking and changing priorities, home purchases have jumped recently. Here’s why so many people have decided that now is the right time to buy a home.
Mortgage rates near record lows
Homebuyers today are enjoying some of the lowest mortgage rates in history.* The 30-year fixed-rate mortgage hit new record lows eight times this year alone, dropping to an average rate of 2.88% (2.995% annual percentage rate) in early August. That average stood at 3.6% (3.720% annual percentage rate) the same time last year. This attractive financing environment has homebuyers rushing to lock in their loans at low rates and low monthly payments. Mortgage applications for home purchases are up nearly 20% from last year, the highest level in a decade.
The home office
When traditional offices started going virtual due to the coronavirus shutdown, many Americans began working remotely from home for the first time in their careers. Working without a designated workspace can be difficult, especially if you’re competing with family and pets for valuable square footage. Some people have found it tough to separate themselves from their work since their work is never really separated from them. For that reason, many homebuyers have been motivated by obtaining more space for their work-from-home needs.
For some, home is where their family is. For others, it’s simply a place to lay their head at night in between outdoor excursions. But home took on a greater significance at the outbreak of the coronavirus as we began to shelter in place and reevaluate the things we hold dear. City dwellers have been flocking to the suburbs to exchange their one-bedroom apartments for houses with fences and lawns. Folks who were renting far from their hometowns have been returning to buy houses closer to loved ones who still live in the area. And now that companies across the nation have implemented remote work policies indefinitely, some are realizing that they are no longer geographically tethered to their employer’s address.
If you’ve been reevaluating your housing situation, now is the perfect time to learn about your options. Get in touch for a free mortgage review to find out how much home you can afford at today’s low rates.
* Based on the 30-year fixed-rate mortgage average as of 10/1/2020. Source: https://fred.stlouisfed.org/graph/?g=NUh