Today we are going to have a brief yet slightly technical post regarding the current effects of COVID-19 on the mortgage rates. There is always speculation about the real estate market when there is volatility in the economy. What does this outbreak mean for real estate investors and those looking to buy or sell their home.
Mortgage rates are currently at a record low. The 30-year fixed-rate mortgage (as of this week) has remained flat at an average rate of 3.33%. This time last year it was 4.12%. Chief economist of Freddie Mac, Sam Khater, has said there is still room for rates to go down.
The Averaging 3.4%, the 5-year treasury-indexed hybrid adjustable rate mortgage did not change this week either.
The most notable point here is the 5 point drop of the 15-year fixed-rate mortgage to 2.77%.
The reason why this is important, especially if you are looking to invest in real estate and buy now or if you need to sell your home, is because there is evidence of further drops. Historic trends show that mortgage rates have roughly followed the 10-year treasury note and as COVID-19 started to spread in the US, the 10-year treasury yield fell to below 1%. This trend of rates following the 10-year note has not been happening as much due to the turmoil the mortgage industry has had in during the virus outbreak, once things stabilize is it likely that rates will go even lower.
What does this mean for someone looking to invest in real estate? You have the chance to buy a home low now and sell the property high, in the future, once the economy goes back into an upswing.
In conclusion, talking to a realtor/real estate professional (www.aminvali.com) and figuring out your options so you can strike when the iron is hot and rates hit their lowest, is an option for anyone who is looking to invest in real estate, buy a home or sell a home in 2020.