Before buying a home in the midst of a pandemic, you need to understand several things that are going on in the mortgage industry. This information is vital if you want to make the best purchase possible with the information available.
I’ve kept in touch with the mortgage lender representative who refinanced my previous home in 2019. He works for one of the top five largest banks in the country and is a top 20% producer in his department. In other words, he knows exactly what is going on in the mortgage market from the inside.
The housing market is heating up for a number of reasons:
- Mortgage rates have hit all-time lows so affordability is up
- Months of pent-up demand due to shelter-in-place and confidence in the economy is returning
- The realization that having a home is more valuable because more time is spent at home
- The desire to have a nicer or a larger home given we are spending more time at home
- The desire to invest in a relatively more stable asset class
- Overall supply is still suppressed
If you doubt my assertion that real estate is heating up, mortgage-purchase applications reached an 11-year high in May 2020. I’m pretty sure the index will continue to be high in June and beyond. The intent to buy property is very strong.