The “third wave” of the COVID-19 pandemic is upon us, which has left many hopeful homebuyers wondering what the surge could mean for the market. Previous surges in the pandemic led to statewide stay-at-home orders and real estate restrictions, affecting home inspections, offer contracts, and house showings. As the government begins distributing the vaccine to frontline healthcare workers and a potential end to the pandemic rises on the horizon, what should buyers anticipate today and prepare for in the future?
A thriving housing market throughout the pandemic has surprised economists, reports the Washington Post. As homebuyers look ahead, regional data can provide a big picture view to how a third wave will impact the market. Looking at the most recent data available in Montgomery County (October), for example, we see that the median sales prices has risen 14 percent in the last year up to $500,000, while inventory has decreased 44 percent and days on market has diminished 38 percent to 21 days. These figures show strong demand is persisting through the pandemic and homes are moving quickly. Judging by this data, buyers should anticipate a competitive market today – even with a third wave underway.
As COVID-19 has caused delays to certain areas of the homebuying process, the COVID addendum emerged as a means to allow sellers and buyers to permit extensions in the sale while also defining rights for each party to cancel the sale in certain situations. Buyers should anticipate that this addendum remains attached to offers and familiarize themselves with the document.
As you continually hear that interest rates are reaching new lows, you may feel inclined to wait until they get even lower. Some economists, however, are projecting an increase in mortgage rates as the economy rebounds. MBA and NAR anticipate that interest rates will reach 3.2 percent in Q3 of 2021. Further, MBA projects interest rates could reach 3.9 percent by 2023.
The data doesn’t yet show that a third wave of COVID-19 will meaningfully impact the current state of the housing market. However, as the distribution of a vaccine portends a welcome end to the pandemic, a rebounding economy and normalization of interest rates is possible. Looking for more tips for buying a house during COVID-19? Don’t miss these four things you should know.