Is Now Still a Good Time to Buy a House?
As we head into the summer homebuying season, we typically see a surge of prospective home buyers checking out properties, negotiating on and closing on new homes. However, given the coronavirus outbreak you may be thinking “should I forget about my plans, or can I buy a house during a pandemic?”
Here’s how you can figure out whether you can – and should- shop for a home right now or hold off until the crisis blows over.
The home sales of February 2020 were the strongest they’ve been in the country since 2007, topping 5 million sales. But three months later, experts are already seeing a sharp decline in buying - job insecurity, thousands of shuttered businesses and millions of employees on leave from work has likely triggered the downturn.
The decrease in home sales is also likely due to practical reasons. When people are worried about their health, it’s difficult for them to think about purchasing a new home. Meeting with potential sellers, real estate agents and looking at properties is also complicated when trying to maintain social distancing.
However, a dwindling housing market does not automatically mean this isn’t a good time to buy a house. In fact, times of financial uncertainty generally lead to falling mortgage rates and the ease of credit qualifications. Before you jump into a home purchase at this time, you may want to consider the following factors:
- How stable is your income? If you have reason to believe you might be laid off, you may want to hold off on your purchase.
- How long do you plan on living in this home? If you plan on selling within the next few years, you may come out at a loss due to a falling housing market and an unstable economy.
- Will you have savings left after buying a home? As with any economic uncertainty, this is not the best time to be without a savings cushion.
If you can afford the purchase, and your income isn’t threatened by the economic instability, the favorable interest rates and looser qualifications during this pandemic can make it a good time to buy a new home.