Should you buy a house with COVID-19 still around? After all, this virus is still in the middle of rampaging across the US, smashing our economy and changing everything from our social lives to school systems.
Unfortunately, nobody knows what the next year or two holds. But our recommendation is yes, now is actually a great time to buy a house. Here are a few reasons why.
Interest Rates are Extremely Low
For various reasons, the current interest rates available on mortgages are extremely low. When mortgage rates get this low, it means houses are essentially on sale. Who doesn’t like to go shopping when things are on sale?
Let’s talk numbers to help make this easier to get our minds around. If you took out a $300,000 mortgage at a 4.5% interest rate, your payment would be about $1,520 per month. Traditionally, a 4.5% interest rate is pretty good!
But today’s environment opens new doors. Now you may be able to get closer to a 3.5% interest rate, or even lower. A $300,000 mortgage at a 3.5% interest rate is $1,347 per month. That’s a savings of over 10%, coming out to $173 per month.
What could you do with an extra $173? Put it into savings, pay off the house faster, fund your retirement – whatever works best for you.
These are great interest rates in the market right now, making it a great time to buy.
Negotiate a Great Deal When You Buy a House
Turn on the news and you quickly see the devastation the coronavirus has done to the economy and job market. Tens of millions of people are out of work. That’s a terrible thing to hear about, but there is a side effect that can be good for homebuyers.
Someone who needs to sell their home because they lost their job may be more motivated to sell. If they’re having trouble making payments, they may be more willing to negotiate a lower price than in a more normal environment.
So for example, maybe you are able to talk them down from a $330,000 list price to your desired price of $300,000. This essentially means you just got the house for 10% off.
Click here to read about four unique things to think about when buying a home.
The Downside of Buying a House with COVID-19
The main downside to consider is the uncertainty factor. How secure is your job right now? Do you work in an industry that has been hit hard by the virus, or has the potential to be hit? Or are you in one of the few industries that are profiting from this situation?
For example, some of the hardest-hit industries are restaurants, hospitality, air travel and events. If you work in one of those areas, your job may be at higher risk than usual, so there are additional risks to buying a house compared to a normal job market.
But maybe you work in an industry that’s doing very well. The swimming pool, household cleaners, videoconferencing and DIY industries are booming right now. If you’re in one of those industries, your job may actually be more secure than normal.
Click here to read more about buying a home during a pandemic.
Should you buy a house with the coronavirus still around? Our recommendation for most people is yes. The low interest rates and higher home seller motivation makes now a great time to buy a house for most people. Give us a call at (949) 651-6300 and we can help you through that process.
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