Is Covid-19 Creating a Buyer’s Smorgasbord of the Real Estate Market?

There is no doubt that Covid-19 has had an amazing impact on daily life for almost every American. And most of those changes are not going to fall into the “good things” category, but could there be an exception?

Federal Involvement

With unprecedented job losses reported in the US there have been some, understandable, impacts to the financial temperature of the country. The Federal Reserve took steps in March to keep money flowing through the mortgage financing system. The actions, including two rate cuts, were part of the central bank’s broader efforts to protect the economy from more damage from the Covid-19 pandemic.

Mortgage rates started falling weeks before the Fed’s first emergency rate cut of the year, on March 3. Then, 12 days after that reduction of half a percentage point, the Fed announced another surprise rate cut of a full percentage point, setting a target federal funds rate to a range of 0% to 0.25%.The rate reductions were designed to stimulate the economy until the worst of the pandemic passes and people get back to work.

Mortgage Market

Lending institutions have responded with mortgage rates that reflect this economic stimulation measures. Keeping the mortgage lending market operational and home sales stable is essential to the American economy where the vast majority of the population has their homes as their primary financial investment. The mortgage industry and responded with highly favorable lending rates. Regardless of how low those interest rates may be if your job market has become unstable or disappeared this distills the pool of viable buyers on the market. This limited demand is a key factor in dropping interest rates.

Time to Buy?

So is now the time to buy an investment property? The magic eight ball is coming up on yes for this one. With favorable interest rates, you will see a greater rate of investment pay off or you can pocket that extra cash depending on what your long-term investment goals look like.

Basically, a win-win situation for the savvy investor. In our local market, we are seeing very little slow down of population growth. If anything, Covid-19 has served to give Florida a bump with many people seeing to relocate to a more favorable climate a benefit more ways than one.