The year 2020 has been a whirlwind for most of us. With the COVID-19 pandemic, our world seems to be speeding towards an economic recession. But how much does it affect the real estate market? For buyers and sellers alike, there have been considerable changes to consider as you venture into your next transaction. To know more, here are some real estate trends this year:
The Decline of Mortgage Interest Rates
Since 2019, the mortgage interest rates have been going down. It has been steadily decreasing below 4% for average types of loans. For this year, it is still on a decline. According to Freddie Mac, the 30-year fixed-rate mortgage dropped to 3.29%. This can be compared to when it had also previously hit an all-time low in November 2012, where it had an average rate that fell to 3.31%. Also, the 15-year fixed-rate mortgage dropped to 2.79%, and lastly, the 5/1 adjustable-rate mortgage dropped to 3.18%.
As the mortgage rates have fallen to what is considered the lowest level in the U.S., the Federal Reserve has taken steps to keep the economy from further crashing by providing money through the mortgage financing system.
What does the lower mortgage rates mean for buyers?
For buyers, the decrease in mortgage rates means affordability. They are more motivated to purchase property, as can be seen from the growing number of mortgage application data. This is considered an advantage for them, more so with the two cuts that the Federal Reserve has made. But with the increasing demand, there’s also limited supply. In today’s market, the lack of properties has been a major problem. So, as a buyer, you need to be wise about your transactions. A few tips that you can keep in mind is that you should first get a mortgage pre-approval and then let the seller know that when it comes to the closing date, you are flexible if needed.
What does the lower mortgage rates mean for sellers?
Since the mortgage rates are low, there would be more buyers and, thus, more sales. As a seller, you can take this opportunity to put your properties on the market. But if the rates increase, later on, you can also opt to let it stay there for a little longer. To make it easier for you, you can hire a real estate agent who can help make the process more favorable to you. They’ll know what price to set up and which will work best to attract a potential buyer.
Increasing Number of Millennial Home Buyers
Millennials are those who were born between 1980 and 1998. Since last year, they have been the largest age group who have purchased homes with a percentage of 37%. In addition, if Millennials are renting, they’re likely going to pursue real estate virtual tours rather than the more traditional in-person tours.
What do Millennial buyers mean for buyers?
You will definitely have a lot of competition so make sure that you know what kind of property you want. Make yourself stand out from the rest of the buyers by showing your determination. You can send a letter to the seller that could depict why you want that particular real estate. Or you can enlist the help of a real estate agent. Almost 90% of millennial homebuyers hired real estate agents when it comes to buying their homes.
What do Millennial buyers mean for sellers?
The most important thing that you have to remember is that you should always understand who your buyer is since most millennials are tech-savvy and make use of the internet to get the information that they need. That’s why you should make sure to update your online listing because 98% of millennials use the internet for their home search. You also need to make sure that you emphasize the advantages of the property rather than its size. They care more about how it will benefit them than the square footage. Lastly, show popular features such as a laundry room, 86% of millennials want houses with this feature.
Those are some of the current trends in 2020. At Virtuoso Realty Group, we can help turn these trends into your favor and make your real estate experience enjoyable and stress-free. Get the help of our real estate agents today!
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