May of 2020 saw about a 20% decrease in available homes for purchase, compared with the same month in 2019. Sellers are wary of inviting strangers into their home in the midst of a pandemic and while marketing options like 3D and virtual tours are becoming more popular, they’re far from ubiquitous and may not be affordable for all sellers. It’s simply a riskier time to sell the family home and a scary time to leave behind the familiarity of a known abode.
Then there’s the compounding issue of housing affordability: those properties that are available may not be affordable. In particular, many gainfully employed and eager would-be first-time home buyers are left without affordable options and resigned to renter status simply because they can’t find an affordable home in their area.
As homeowners are becoming increasingly hesitant to sell, looking to stay physically close to home and protect their sense of security in the wake of the pandemic, falling interest rates may mean cash-out refinancing or home equity lines of credit (HELOC) become more attractive options. Rather than selling in search of a more spacious or convenient option, people are refinancing, recommitting, and staying put.
Families are also generally spending more time at home, which creates greater do-it-yourself ease. Homeowners may be more likely to pursue a refinance or take out a HELOC for home improvements instead of making a big move – and this could be a great option! HELOC rates are influenced by dropping fed rates and may be increasingly affordable as interest rates stay low over the coming years. As you likely know, many large banks have raised credit score requirements for home equity products, so they may be a challenging option for homeowners building or repairing credit.
While little is certain in the midst of a pandemic, the notion of “home” is certainly becoming an increasingly important part of individual and family security. While the market is stretched thin, we’re in the important business of helping families find a place to rest, play, and recharge.
Please drop me an email or call if you have any questions – or someone you know is in need of expert advice. I love to help those you care about. If you have a referral please click the button down below. Your referrals are the heart and lifeblood of my business.
Mission San Jose Mortgage
2111 W. March Lane, Suite B100
Stockton, CA 95207