Like you, I am actively monitoring the developing situation surrounding COVID-19. As an unprecedented public health concern, this is a fluid situation that is continuously changing. The long-term impact is not yet known, and truly cannot be known until the pandemic is under control. Here is a look at the world of real estate as of March 2020.
All-Time Low Mortgage Rates
Over the past year-ish, mortgage interest rates have been declining as money flows into the bond markets. As of March 12, Freddie Mac, the Federal Home Loan Mortgage Corporation, reported a weekly average interest rate of 3.36% for 30-year fixed rate mortgage loans. Around this time last year, that rate was 4.31%. A 1% change might not sound like a lot, but it can significantly increase a consumer’s buying power.
Appreciation Remains Steady
Real estate remains a solid investment with proven appreciation over time. While it is easy to remember the tribulations of the 2008 market crash and subsequent recession & housing crisis in this current time of economic uncertainty, it is important to remember that, this time, the housing market did not cause our economic conditions.
Housing is holding its value and, historically, we’ve seen homes increase in value nearly 5% annually across the nation. In times of stock market volatility, investors will often flee from equities and put their wealth into the purchase of real estate as they understand its value as an asset with multiple lines of revenue -- appreciation, tax advantages, and potential cash flow from rental income (where applicable) and paying down your loan principal.
Following the recent plummeting of the U.S. stock market, real estate investing will see increased interest from individuals who wish to put their remaining wealth in a steady, reliable place that will see a positive return. If you are looking to purchase a new home, whether you are a first time buyer, veteran real estate customer, or investor, you can enjoy record low mortgage loan interest rates if you act soon. Finally, you can rest assured that property you own now or buy soon will continue to increase in value over time.
We are living in a pivotal time in world history. Now is the time to hunker down, think about the big picture, and play the “long game.” I will be keeping an eye on world events as they unfold, as I’m sure you all will be as well, and am happy to help you navigate how Raleigh’s real estate market looks in our new reality.
Jessica Mohr is a licensed real estate broker working in her hometown of Raleigh, North Carolina.