Home Buying Up
Interest Rates at Historic Lows
There’s no place like home. That’s never been more true than in 2020. Homes became schools, offices, vacation resorts and more. And with interest rates at historic lows, the time might be right to consider a change of scenery.
According to an article on bankrate.com, the housing market could avoid the typical fall and winter slump this year. Experts said summer homes sales were strong after a slowdown in the spring, at the beginning of the pandemic. And they see the trend continuing.
“Generally, in the autumn we do see sales come down after the spring and summer buying season, but this year it looks to be solidly up compared to other autumns,” Lawrence Yun, the National Association of Realtor’s (NAR) chief economist, told Bankrate in the article. “It could be one of the best autumns or even winter months.”
A report dated Oct. 24 at realtor.com indicated that housing activity was balancing out as “the pace of demand eased, and the pace of new listings improved.” According to the report, the realtor.com Housing Market Recovery Index reached a new high of 112.4 nationwide for the week ending Oct. 24, 12.4 points above the pre-COVID baseline and 1.5 points above the previous week.
The report showed demand had one of the biggest declines since June, perhaps due to the seasonal slowdown. In parallel, the “new supply” component posted the greatest improvement since March, growing by 3.8 points to 106.1, proving that seller confidence continues to improve.
A report on local trends at realtor.com said the median list price of homes in Shreveport was $170,000 in September, up 6.9 percent year-over-year.
The bankrate.com article said housing prices weathered the pandemic better than other sectors of the economy. So prices and competition are high in the market right now. But, with interest rates as low as they are, now is still a better time to act than waiting for the competition or the prices to go down.
Yun and other experts said in the article that the key is to prepare ahead of time. A mortgage lender plays a key role in that process. We sat down with Ashley Brint from Regions Mortgage to discuss the keys to home-buying success.
Question: How would you rate the market right now? Is it a buyer’s market?
Brint: It is more of a seller’s market right now due to low inventory. It is a wonderful time for step-up buyers and renters to purchase a home while rates are so low.
Q: How long can we expect interest rates to stay as low as they are now?
Brint: Currently, rate experts like the Mortgage Bankers Association are projecting continued low rates into 2021.
Q: If I want to buy a house but my finances have been impacted by COVID-19, what options do I have?
Brint: Most servicers, such as Regions, have set up payment deferrals and forbearance programs to help borrowers get through these tough times. As far as purchasing a new house, if you have been impacted by Covid, there are options. It is important to call your lender to determine what loan product would be best for you.
Q: What types of mortgages do you offer? What are the pros and cons of each kind?
Brint: Regions Mortgage offers many loan programs, such as Conventional, VA, FHA, USDA and Portfolio loans that are secured in-house by Regions. Each loan program may differ based on credit score requirements, debt to income, loan amount limits or income limitations. It is best to call your lender to help navigate you through the different programs to determine which is best for you.
Q: What’s the advantage of getting prequalified for a mortgage?
Brint: It is always best to get pre-qualified for a mortgage up front to determine how much you can afford before you start the house searching.
Q: What do I need to do to prepare for the process of securing a mortgage?
Brint: The first step is to contact your lender and let them know that you would like to get pre-qualified for a home loan. They will pull your credit report and ask you a series of questions, such as your monthly income, how much money you have saved up, etc. These questions help determine which loan program would be best for you because not one size fits all.
Q: How do I know if refinancing is right for me?
Brint: With rates at all-time lows, you should reach out to your lender to see if it would be beneficial to refinance. The general rule is that 1% lower in rate could be a substantial savings. Regions Mortgage has various refinance calculators, and we can assist you in determining your monthly and annual savings of refinancing your home.