A vast amount of people are looking to buy houses right now, and for a good reason: mortgage rates are historically low.
Why Mortgage Rates Dropped
Mortgage rates were already beginning to fall before COVID-19, but the Federal Reserve System proceeded to offer rate cuts by, first, 0.5% and then again by 1%. Since then, federal funds rates have been ranging between 0% and 0.25%, and the Fed has no intention of raising them until the country is in a more stable economic state and employment rates rise.
As a direct result of the Fed cut, mortgage interest rates reached a new low. The 30-year fixed-rate mortgage averaged 2.98% last month, the lowest it has been in over 50 years. The lower interest rate has encouraged many people to take advantage of the opportunity to save money by purchasing new homes or refinancing their current homes.
Loans Are Easier to Come By
Much like the mortgage rate, the number of loans granted by U.S. lenders has reached historic levels. The success of the housing market has granted them confidence and allowed for flexibility in their offers. Minimum credit scores are lower than in the past, there are fewer requirements for self-employment documentation, and the maximum loan amount has increased.
What This Means for the Real Estate Market
With all that has changed in the real estate market lately, it is a great time for both buyers and sellers. There are more people looking to purchase homes right now, allowing sellers to list for higher prices, as they have the upper hand when it comes to supply and demand. Buyers have a great opportunity to take advantage of the low mortgage rates and easy to access loans.
The team at Posh Properties has experience with both buying and selling real estate. Get in touch with us today to find out how you can make the most of this prime time in the real estate market.