Updated: Apr 21, 2020
We’d like to share with you our knowledge and hands ‘off’ experience the past month in regards to the real estate industry in Atlanta. The main points we will cover in this blog are as follows:
Interest rates on home loans hit a record low in March at just 3.29%
On average, the competition for our buyers the past month has gone from 7+ competitive offers on a house to just 2 competitive offers.
Fewer people are looking for houses, which means less competition for you to have the winning offer.
Shopping for houses is still social distancing because most business is done from the comfort of your own home.
In March, the Fed cut interest rates to 0% on short term bank to bank loans. Now, let’s clear something up. Mortgage rates are not short term loans and therefore do not directly correlate with the recent Fed movement. Rather, mortgage rates follow long term bond yields (bond yields - the return an investor realizes on a loan to a borrower).
So what does that mean for current mortgage rates…
Currently, mortgage rates are at a historic low. In March they were at a record low of only 3.29%, the lowest mortgage rate of all time. With something as novel as COVID-19 and the effect it may have on the market, it's possible that mortgage rates could surge substantially in the next few months. Now’s the time to lock in that low mortgage rate!
Let’s move on to supply and demand…
Its common sense to know that within the past month, fewer people have been outside. As a business that constantly interacts with people, we’ve noticed fewer offers have been made in competition with our buyer’s offers.
Let’s look at an example: Not long ago we started working with a buyer. After a few weeks of showings and providing MLS (Multiple Listing Service) research, our buyer found a house she loved and made an offer. Her offer, along with more than six other offers on the same house were beaten by one. She was unable to make an offer with the best terms for the seller to beat out the other buyers. This week, she found another house to call home. She made an offer. This time with only one other as competition. She won the negotiations and is moving towards the purchase of her new home… Simple math of supply and demand!
Last but not least, social distancing safety…
Yes, it is true that to go look at houses, you need to leave the comfort of your own home. Fortunately, when looking at houses, you only come near one other person (your agent) and it is possible to stay very far away from that person.
In our case, we meet our buyer at the house. We unlock the door and enter the house with mask, gloves, and wet-wipe in hand. We allow our buyer to walk through the house while we stay at least ten feet away. We are solely there to answer any questions you may have. But under no circumstances do we need to be on your tail as you view your prospective homes. After showing, the rest is done from the comfort of your own home. Everything from offers to negotiations and inspections can be done through phone and email. No contact necessary!
With all that being said, we always want to reiterate…
Buying a home is one of the biggest purchases you will make in your life. We urge you to be financially comfortable before tackling an endeavor like this. Whether you are ready or not, we are always available 24/7 to answer any questions you may have. Our buying process and frequently asked questions are also available at ehlingerteam.com/buyers.
Stay safe out there!
The Ehlinger Team