Mortgage Rates and Real Estate Forecast

Back in February, the forecast looked pretty dim not only for the real estate business, but for the U.S. economy as a whole. The coronavirus pandemic has caused the unemployment rate to skyrocket, businesses to close their doors, and retail sales to suffer record drops. The Federal Government has pumped money into the economy and directly into people’s pockets in an effort to keep things afloat. 

In the same vein, the Federal Government bought more than half a trillion dollars of mortgage-backed securities since mid-March. This will assure lenders that they’ll have the money necessary to keep funding mortgages to consumers. As a result, mortgage interest rates are at an all-time low.

What are the current mortgage rates? Do experts say mortgage interest rates are going to remain stable in the coming months? What does this mean for buying and selling homes? Find answers to these pressing questions below.

Current Mortgage Rates

Mortgage rates sank to record lows in early April and have remained there. From April 3rd-30th the average rate on the 30-year fixed-rate mortgage was between 3.25% and 3.5% APR, according to NerdWallet’s daily mortgage survey. This was the lowest monthly average ever recorded by NerdWallet.

As of May 6, 2020 the average rate on a 30-year fixed-rate mortgage was unchanged at 3.375%. The average rate on the 15-year fixed-rate mortgage was at 2.891%, and the average rate on the 5/1 ARM fell four basis points to 3.2%, according to a NerdWallet survey of mortgage rates published daily by national lenders.

Even with interest rates remaining low, fewer people are applying for home loans now than were in early April. The number of refinancing applications, on the other hand, has stayed strong.

>>Click here for more on today’s mortgage rates.

Mortgage Rates Forecast

Although there are some differing opinions among mortgage experts, the general consensus is that mortgage rates will most likely drop or remain the same in the immediate future. In a recent news conference chairman Jerome Powell commented that the Federal Government foresees “considerable risks to the economic outlook” over the next year or so. This all depends on the economic consequences of the COVID-10 outbreak. The Fed will likely keep their approach the same until the economy is back on its feet.

>> Click here for news on the latest trends.

Is now a good time to buy and sell?

Here’s the bottom line. Now is a great time to apply for a home loan IF your income hasn’t been affected by the COVID-19 crisis. Mortgage rates are low and our local real estate market in southwest Missouri is strong! Although the number of active listings on the market is lower now than it was in the fall, this number has remained stable over the last two months. In fact, we saw a slight increase in the number of homes for sale from March to April! 

Keep in mind, there is no reason to sign a contract on a home right now if your job is in jeopardy. Also realize that homeowners, realtors, and lenders are all taking COVID-19 safety precautions, so the buying process could take longer than normal. 

There’s good news for sellers, too! Listing prices are also on the rise! The median listing price in southwest Missouri has increased significantly since February and landed at $189,900 as of April 15, 2020. The average listing price was recorded at $248,294. Fortunately, these numbers reflect that our local real estate market did not take a hit like many predicted.

>>Click here for a helpful resource on buying and selling a house during the coronavirus pandemic.

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