Buying A New Home During COVID-19 | Pros & Cons
Just a few months ago, virtually everything about how we do life as Americans changed by the intrusion of the COVID-19 virus. Stay-at-home orders, layoffs and more flipped the healthy, boisterous economy upside down. Thankfully, it has righted itself somewhat thanks to the resilience of Americans and their iron will to prosper, and with some help from the Federal Reserve. This has led to an interesting development within the housing market, one that some people actually find advantageous. With all the changes you’re probably thinking to yourself, “Is now a good time to buy a new home?” Read on to learn more about the pros and cons of buying a new home in today’s economic climate.
- Historically Low Interest Rates: To counteract pending doom and a sure economic depression, the Federal Reserve acted quickly to reduce prime interest rates to an astounding 0 percent. This has created a situation where already low interest rates pre-COVID are now historically low. This means lower payments for you if you choose to purchase a home at this time.
- Virtual Options For Tours: Due to the dangers associated with COVID, many realtors are offering virtual tours to show properties. This means you can peruse a property from the comfort of home, determining if it is worth a second look. You can virtually tour several houses in the time it takes you to drive and see one in person, so many potential buyers consider this virtual tour option a positive, time saving addition to home buying experience.
- Low Resale Inventory, New Home Market Healthy: The new home market is actually conquering the used home market presently. Home builders need to sell their never-before-lived-in homes, so they are offering deals on properties that are somewhat unprecedented. Obviously, new homes are advantageous because no one has ever lived in them, so there is no wear or tear that is typical of an already-lived property. Some builders are even offering a reduction in closing costs to promote their new homes, which of course provides a new home buyer significant cost savings.
- Tighter Credit: Although interest rates are astoundingly low, banks and other lending corporations are being cautious when issuing these loans. Consequently, they are requiring a higher credit score and sometimes requesting a larger down payment, etc. in order to consider issuing a loan. Therefore, while the interest rates are lower and can save you a great deal of money, it might prove to be a bit more difficult to obtain a loan.
- Limited Supply: There are just not as many homes on the market today for various reasons. For example, some potential sellers are holding off putting their property on the market because they don’t want potential buyers walking through their house to tour it during COVID. Also, some potential sellers are staying put in their homes because they are scared to make such a big move in a somewhat confusing, uncertain economic time. Therefore, the overall supply of homes to choose from as a buyer is simply lower than normal. Luckily, this drawback is easily eliminated when you look to buy new construction.
Overall, there are many pros and few cons to buying a new home in today’s COVID economy. Therefore, you have to determine for yourself if you are better off waiting this out or instead taking advantage of the historically low interest rates and new home incentives. Hopefully, the information above will make this decision a bit easier.
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Contact Cachet Homes for more information.