COVID-19, Mortgage Rates, and the Short-Term Impact on the Housing Market: Expect a Slow Spring

The stock market, and the mortgage rates, have been on a bit of a rollercoaster as of late; this ride is about to get a bit more wild. Recently, in response to COVID-19, the Federal Reserve dropped their rates in an effort to stave off recession. In normal times, mortgage rates would follow suit, but these are far from normal times. To be sure, mortgage rates are likely to drop to 3.5% or so – a far cry from the Feds’ rate of 0% to 0.25%.
If you will recall, 30-year fixed-rate mortgage (“FRM”) were sitting at 3.29% as of March 5, 2020; the lowest the 30-year FRM has been since Freddie Mac began tracking interest rates 50 years ago.  After the Coronavirus, mortgage rates went up in stark contrast to most predictions. The cause of this appears to be the refinance rush, which forced lenders to raise their rates to slow down the flood of would-be refinancers. 
Notwithstanding the fact that rates are higher than one would expect, rates are still incredibly low. The burning question is whether buyers will want to close on homes during this pandemic which is, at the very least, threatening the country with recession. Unfortunately, the concept of social distancing has made its way into everyday lexicon, and has inserted itself as a general paradigm in the way we think; this could lead buyers and sellers to pull back from the market until this global disaster passes. However, in these uncertain times real estate remains the best investment money can buy and consumers and agents are getting creative. Virtual showings have become the new hot thing, and extra precautions have been put in place for things like inspections and appraisals; extra hand washing, booties, and gloves have been added. Ultimately, this home selling season will likely be a little slower but we fully expect the market to see a boom once the pandemic passes.
At the Chernov Team we understand that knowledge is power, and knowledge of how the market is behaving is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.