Despite the world winding down and the economy doing a deep dive during Covid-19, home prices are continuing to steadily rise. Why (and how has the industry defied the odds)? Here’s what our Myrtle Beach real estate agents have to say:
Part of the reason for the housing price boom is because of the virus itself. Families are fearful of staying in smaller, multi-unit buildings, so they’re seeking more space in the suburbs, like homes for sale in Carolina Forest, S.C. More space means bigger single-family homes with a heftier price tag. And a bigger home is more accommodating for parents working from home all day and kids doing school from home … thanks to Covid-19.
Lower mortgage rates
According to Freddie Mac, 30-year fixed-rate mortgage rates averaged 3.7% on the first week of January 2020 and now it’s only 2.9%. Because lower rates make monthly mortgage payments cheaper, more house hunters are buying homes – and more expensive homes, at that.
Increased consumer confidence
Americans shifted from hoarding essential products, like toilet paper, and quarantining at home full time to a country that’s gradually starting to learn to live with the virus, even with a rise in cases.
A softer recession
Unlike the 2009 housing crash, when prices were artificially inflated and more than 7 million homes were sold, in 2019, a little more than 5 million homes were sold. While housing prices have recently risen, the growth rate hasn’t been as extreme.
Homeowners by the numbers
Bottom line, the rise of home prices correlates with the actual homebuyer demographic statistics. That is, even through all the layoffs and furloughs because of Covid-19, 133 million American still hung onto their jobs. And, with 5 million existing homes sold each year, only about 4 million home buyers are needed for the housing market to remain stable. Add to that, the largest population generation in U.S. history: 72 millennials, who are now moving into the home buying stage of their lives.
With the CARES Act enacted in March, 4 million American homeowners struggling with their budget were able to keep their homes because they could delay monthly mortgage payments up to a year and home values wouldn’t be affected.
Contact Paige Bird at 843.450.4773 or firstname.lastname@example.org to schedule an appointment to guide you through the process of buying or selling your home.