We are officially in the dog days of summer, but it’s not hampering the real estate market.
Though unemployment is high and uncertainty higher, historically low interest rates are propelling the market in spite of the pandemic. The average contract interest rate on a 30-year fixed for shy of $520,000 increased from 3.1% last week to 3.1% this week, but buyers with excellent credit are going lower, according to Houston realtor Lily Jang.
“It is a very busy time in real estate. Many of us are busier now than we were pre-Covid because we’re seeing historic rates under 3%,” she says with excitement in her voice. Jang says she had been doing online virtual 3-D showings before there was a novel coronavirus but that’s positioned her perfectly to assist buyers and sellers squeamish about strangers in their house or traipsing through a stranger’s home. For those who want to venture out, Jang says realtors are aligned with all CDC safety protocols and can accommodate just about anything. “We’re armed with gloves, armed with masks on and hand sanitizer. We’re smart about it.”
Mortgage applications are up 122% over the same week last year. And then there are re-finances.
“I know that my lenders are really busy with refi’s,” says Jang. “People are seeing their rates cut in half. It’s just a good time if you’re going to stay in your home for a long time to refi and drop your mortgage payment every month by hundreds of dollars.”According to Fannie Mae chief economist Doug Duncan, almost 60% of outstanding loan balances have at least a half-percentage point incentive.
This is the ninth straight week of annual gains in the mortgages.
photo: getty images