The COVID-19 pandemic has left many Americans feeling like life is on pause, with work patterns adjusted, schools closed, and events and conventions postponed. This leaves many home buyers wondering if they should continue with their plans, or put those on hold as well.
If you decide to move forward with your house hunting, here’s what you can expect as the COVID-19 outbreak continues to impact daily life.
Video Tours Instead of Walk Throughs and Open Houses
Conducting video tours of homes isn’t a new idea for real estate agents, but it’s never been more essential. Instead of open houses and walkthroughs that force agents and buyers to be in close quarters, many are adopting virtual measures.
According to Zillow, the number of home tours created with its software surged 215% compared to the volume seen before the COVID-19 outbreak. You can expect to sift through plenty of pictures and videos, only visiting properties that you are seriously considering purchasing.
Delayed Underwriting Process
There’s much more to buying a home than selecting a property and writing a check. In addition to the comprehensive assessment of your finances, credit score, and assets, mortgage underwriters also require appraisals and title searches.
But the COVID-19 has appraisers and other people valuable to the mortgage process stretched thin, especially under restricted contact requirements. “An appraiser has to go into the house, and there are concerns there when it comes to social distancing and quarantines and lockdowns,” explains Joel Kan, associate vice president of economic and industry forecasting for the Mortgage Bankers Association.
While the average mortgage loan moves through the underwriting process in about 45 days, many lenders have been forced to extend that timeframe in response to delays. Wells Fargo, for example, is “recommending that homebuyers choose their closing dates carefully to account for potential delays.”
Lower Mortgage Interest Rates
Lower interest rates typically boost home sales, and at the beginning of April those rates dropped to their lowest level ever in at least 30 years. As a result, many home buyers are jumping into the market, eager to take advantage of rates that may never fall so low again. Current homeowners are also pushing to refinance before the rates increase once again.
As Kan explained, “This decline in rates- despite Treasury yields rising- is a sign that the mortgage-backed securities (MBS) market is stabilizing and lenders are successfully working through their lending pipelines.”
A normal home closing brings together the buyers, sellers, their real estate agents, and other relevant parties to formalize the sale of a home, transfer the money, and sign paperwork. It’s a momentous occasion for many buyers, especially first-time owners.
However, due to the coronavirus, many closings are now being performed remotely. More than 20 states across the country already have remote online notarization policies, but buyers in more than half the states in the U.S remain unable to close a real estate transaction without an in-person signing.
Depending on where you live, this may or may not impact the closing of your home purchase.