It was barely a month ago when stock markets were at an all-time high, largely due to the fear of missing out, whereas today it is quite the opposite many people are panic selling.
To soften the economic blow caused by COVID-19, central banks around the world have cut interest rates. Anyone with an existing variable mortgage, or someone looking to get one, can expect their borrowing costs to decrease.
We are also seeing investors flee the stock market and put their money in investment-grade bonds. A result of this flight to safety is that fixed-term mortgage rates are dropping. Lower mortgage rates increase the amount a home buyer can borrow. Most real estate experts are in agreement that the Fed’s recent interest rate cut will have a positive impact on the housing market. Lower interest rates are usually followed by higher buyer demand because they can get better deals on mortgages.
All these factors are fueling the housing market and not even COVID-19 appears to be able to slow it down… yet.
For those individuals who are thinking about selling and looking to cash out or downsize, listing their properties right away could be the answer. Momentum is on your side and there is limited inventory, so sellers of quality homes are getting top dollar.
If you are thinking of buying, now is the time to take advantage of some of the lowest interest rates in recent memory but exercise caution. Don’t underestimate COVID-19’s negative impacts on the economy, jobs and buyers’ sentiment and avoid overstretching your budget.
