For individuals and families who have been on the cusp of making major life decisions, it can seem like the COVID-19 pandemic could not have come at a worse time. Many people have had to put their plans on hold, and those who have been looking into buying a home may feel that they are stuck in limbo. A few key changes have been taking place in the real estate market, and these changes can severely impact the home buying process for many Americans. Here are some things to keep in mind while searching for a home (and a home loan) during this period of economic uncertainty.
Changes in Borrowing and Down Payments
With job insecurity and economic instability running rampant, lenders are becoming even more shrewd and cautious. Many lenders are starting to require higher credit scores and larger minimum down payments for home loans, so folks looking to buy a home should be prepared to put more money down upfront. For some, these factors may make securing a home loan out of the question for the time being. For others, committing to such a large purchase in such an unstable economic environment is intimidating. While some buyers are determined to move during this time, many have put their search for a home on hold.
Decreases in Homes for Sale
Many Americans with homes already on the market have suspended their selling efforts. However, many buyers are doing the same. Still, the real estate market seems to be in a period where plenty of folks are looking to buy, but there is not sufficient inventory to meet demand. While this can be incredibly frustrating for buyers who have been searching for the perfect house or have had deals fall through due to the pandemic, this gives buyers time to save and build up their credit so that they can be ready when they find their dream home.
Buying a Home is a Slower Process Now
For those who can secure a loan and begin negotiations with a seller, the process of buying and selling a home has become incredibly slow. Inspections, tours, mortgage and loan application processes, and other vital steps in purchasing a home are slowing down dramatically. Many real estate agents are conducting tours online, and business closures and social distancing measures have made almost every aspect of real estate run at a snail’s pace.
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