“Given that a home transaction is a major commitment, the uncertainties on how the economy will play out and the spread of the virus itself are barriers to home buying and selling,” says Lawrence Yun, NAR’s chief economist. “The stock market crash is no doubt raising economic anxieties, while the coronavirus brings fear of contact with strangers. At the same time, the dramatic fall in interest rates may induce some potential buyers to take advantage of the better affordability conditions. It is too early to assess the likely impact as to whether lower interest rates can overcome the economic and health anxieties.”
At least in the short term, Yun predicts home sales to be down about 10% compared to what they could have been due to the spread of the coronavirus.
One movement that could lessen its impact, however, is the dip in mortgage rates and its effect on buyers to move ahead with a purchase. More than one-third of members said that their clients are excited by the lower mortgage rates.
Real estate pros credit the lower rates for prompting the majority of home sellers to not make a change in the listing of their home, the survey shows. They want to take advantage of the lower rates on the buying side.
In some areas, the number of home sellers is rising. In California, 12% of members said the number of sellers is increasing because of the desire to take advantage of lower interest rates upon moving, according to NAR’s survey. Nine percent of real estate pros nationwide also reported a higher number of homeowners wanting to sell for this reason. Only 3% of sellers nationwide have decided to remove their home from the market and refinance into a lower mortgage rate so they can remain in their home.