Corona virus has changed home buying trends
When it comes to buying a house, people increasingly abandon the city center and head for the mountains. Even the beaches, small towns and rural postcodes.
Maybe you thought it was time to leave town to get more breathing room in your own house.
But what does it mean to pack and move during the corona virus?
How difficult will it be to buy a home and mortgage in the middle of a pandemic?
The fact is that a lot of people do it. And you probably can too. Here's how.
Check your eligibility to purchase homes (August 3, 2020).
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Why move during the corona virus?
Moving during the corona virus is increasingly making sense for many people.
It's a chance to start again, take a different career path and make new life choices. It is also a time when the real estate market is surprisingly attractive.
Interest rates have been at or near record lows for weeks. Financing below 3% is now available for those with solid credit, low debt and healthy cash reserves. In the United States, prices have never been so low for so long.
Low down payments make buying easier. Accessible loan programs are available to almost all home buyers. Think low interest rates plus USDA and VA funding with a zero decline, FHA loans with only 3.5% upfront and conventional mortgages with only 3%
The prices and values for homes have risen. According to the National Association of Realtors (NAR), the typical existing home was sold in June for $ 295,300 – an increase of 3.5% over the previous year. "The national price hike in June," said NAR, "marked 100 consecutive months of growth over the previous year"
If you buy in a market where house values are increasing, you will gain equity more quickly. You also avoid paying more for the same house if you buy in a year
There are new home purchase options in affordable markets. Rising prices mean buyers may want to consider buying in selected countries Opportunity zones, Census areas with cheaper properties that can benefit from the development
Many tenants use this as an opportunity to switch to home ownership. And current homeowners are using record-breaking rates as an opportunity to determine their size.
In July, home buying activity increased 21% year over year. It’s huge.
Buying a home during the corona virus is not only attractive, but also feasible for many.
Check your eligibility to purchase homes (August 3, 2020).
Possible challenges when moving
Of course, moving in the middle of a pandemic will be a difficult process. We don't want to simplify it too much.
It will probably be more difficult to pack, clean, hire, and deal with a moving company if you have to deal with standard moving logistics when everyday life is so complicated.
And then there are challenges on the housing market. There are two important points to note here:
Inventories are scarce and 18% lower than last year. This means that home buying and bidding wars are more competitive, especially in the cheapest marketsMortgage standards can be a bit stricter than normal. Corona virus has put the economy at greater risk. Jobs are no longer as secure as they used to be. As a result, many lenders have tightened their qualification standards to make lending a particularly secure prospect. However, shopping with multiple lenders can help you work around this issue if your loans or finances are marginal
Despite these drawbacks, many Americans have decided that it is still the right time to buy a home.
Ask yourself: Do the long-term benefits outweigh the immediate challenges?
If you're looking for additional instructions on whether to buy a house during the corona virus or not – and how the process works – see:
Where everyone moves
Something else happens during buying and selling, financing and refinancing.
People vote with their moving cars – and that often means moving to places that are far from subway cores.
"Busy skyscrapers and cramped areas have lost their shine," says Mansion Global.
It adds that "as work from home is becoming the norm and some companies offer their employees the opportunity to finally work remotely, many Americans are considering moving to areas where they have real estate with more space, privacy and buy security. "
For example, think of Idaho. According to United Van Lines, 67% of moves to Idaho in 2019 were incoming – the highest percentage in the country.
"Without access to the usual advantages of urban life (nightlife, museums, sporting events), it seems much less sensible to spend a small fortune on a cramped apartment or condominium." –Realtor.com
In states like New Jersey, where 68% moved elsewhere, people went the other way.
Life in a pandemic "is causing more and more Americans in cities to reassess their life situations – and the long-term impact on the country's hottest urban centers could be huge and transformative," Realtor.com explains.
“Without access to the usual advantages of urban life (nightlife, museums, sporting events), it seems much less sensible to spend a small fortune on a cramped flat or apartment.
"Early preliminary data indicate that more and more die-hard townspeople are looking for new homes in cities or smaller towns, ”Realtor continues.
Home buyers use a mobile office
Corona virus has changed work-life dynamics for most households. This is one of the main reasons why flocks of tenants become homeowners.
The new office environment
The pandemic has changed the workplace in the big city. It's no longer about spending more or less time in the office. In many cases the office is closed and the building is sealed.
In their place, the home office has now become an office; There is no other place to go.
This has families looking for more space than an apartment can offer. With children studying in one room at home and adults working in another from home, a house offers the much needed space to breathe.
The new working day
It turns out that buying a house in a remote location can be of great benefit to both workers and clerks.
The working day is being restructured. Instead of spending time on the street or commuting in some other way, we now have more time to do the real work. In many cases this is a win-win situation.
Employers may see higher productivity, and more flexibility for employees – and freedom to work in sweatpants.
"Inhabitants of all ages and incomes move to suburbs and small towns in record numbers." – Kristin Tate, the hill
Kristin Tate, who writes in The Hill, explains: “A combination of the coronavirus pandemic, economic uncertainty, and social unrest is causing waves of Americans to move out of big cities and move permanently to sparsely populated areas.
"The trend has been accelerated by technology and changing settings that make it easier than ever to work remotely. "
As Tate says: "Inhabitants of all ages and incomes move to suburbs and small towns in record numbers. "
Are big cities finished?
In June the Business Insider called "the 50 best places " live in America.
Big cities like Denver, San Diego and Austin were at the top of the list. But also among the fabulous 50 were much smaller places, like:
Grand Rapids, MIPensacola, FL (population 53,000)Manchester, NHPortland (the one in Maine)Boise, IDAsheville, NC
Does this mean that big cities become empty when people flee to small and distant places?
Large cities can support companies and institutions based on their size alone, which are not possible in smaller locations.
Think of large museums, a wide range of restaurants, huge medical facilities, entertainment and the opportunity to network.
Big cities will always be attractive. However, the idea of a distributed office with people buying a house that is far from traditional office centers is becoming more and more common.
For many, small town life is simply more sensible today than ever before.
Get a mortgage during the pandemic
Getting a mortgage is one of the few things that actually became more convenient during the pandemic. At least for the most part.
Although qualifying can be a little more difficult in some cases, the actual mortgage process has become easier.
Most lenders currently take out all-online mortgages – so you can shop, apply, submit, sign, and close without ever having to go to a credit bureau.
If you are planning to buy, contact a lender first to find out what interest rate you qualify for and what you can afford.
Since mortgage rates are still near record lows, homeowners can afford larger houses than a year ago.
Check your new tariff (August 3, 2020)