The economy is showing signs of improvement. Pandemic-related restrictions are rolling back, and millions of Americans are getting vaccinated for Covid-19 each day. So, what does that mean for home ownership and home sales right now? Jay Myers, loan officer at Rock Mortgage Lending, gives Good Day NWA some insight into the current mortgage lending industry.
The lending industry has been turned on its head because of the pandemic. As we transition to the prospect of returning to more in-person public activities and the economy appears to be responding positively, what does the housing market look like?
It’s no secret that the housing market has been hot the past few months, but as economic indicators have shown signs of improvement, mortgage rates also began to rise in February. Homeowners out there might wonder if they’ve missed a prime opportunity to refinance–but it’s not too late to take advantage of historically low rates and potentially save thousands of dollars on your mortgage. You just shouldn’t wait too long. You have to remember, even if mortgage rates are up, they are still at multi-decade lows. And, chances are, they won’t stay that way much longer. Mortgage rates fluctuate from day to day — and, of course, no one can predict the future, but experts anticipate mortgage rates to follow an upward trend in the long term. That’s why refinancing or buying now, especially if you can tap into a temporary dip in the rates, is a really smart move. If you were waiting for rates to hit bottom, that moment has passed.
What is inventory looking like for those in the market for a home?
Spring is usually the time of year when the most listings come onto the market, but this March residential real estate inventory, or the number of active home listings on the market, was down by about half nationwide and Arkansas was no exception. Housing inventory was down 58% in March, according to Realtor.com. Homebuyers should prepare for the possibility of finding their dream house online and contacting the agent, only to discover it’s already been sold.
What are the broader implications of low inventory on the housing market?
Ultimately, low inventory affects prices. It’s a bit of a chicken and an egg deal. Inventory must grow in order to cool prices, so folks have to start selling their houses, but sellers might wait because they’re not confident they will find a new home to buy. The housing inventory was already low going into the pandemic. It was low in 2019, too. It has only been made worse by an influx of people looking for more space while taking advantage of historically low rates. Folks can get a lot more living space for their money in Arkansas than in California.
As the economy recovers from the pandemic, there might be families out there with a little more money in their pockets, who see the low interest rates and want to seize the opportunity to buy a home for the first time. For them, what’s the first step?
Talk to a lender and get prequalified for a home loan. It’s always tempting to look around online, find a home you like, and then apply for a loan. But you’ll find in the current competitive market, mortgage pre-approval is essential because many home sellers have multiple offers. Sellers want to know the buyer is serious and has the cash or financing to make a firm offer. In addition, pre-approval lets buyers know exactly how much money a lender will loan them. It also helps them target the right homes within their budget. After all, you don’t want to get your heart set on a home only to find out you can’t afford it. Every situation is different and you want to get a knowledgeable lender who will support you and guide you through the process to find the right mortgage for your specific situation.
For more information, visit www.rockmortgagelending.com or call 479.321.3355.