In May, mortgage rates hit a low after refinance applications spiked and were accompanied by a fall in mortgage applications. The month before, the Federal Reserve made two rate cuts in an effort to protect the economy and encourage people to continue taking out mortgages throughout the era of the pandemic. In March, the Fed entered a period of quantitative easing in which the government began to purchase mortgage backed securities to ensure that money is available for lending and borrowing. In the months that followed, fewer homeowners have placed their homes on the market and listings have declined 15%. More homeowners are also refinancing.
At present, experts predict that mortgage rates will remain near the low 3% range with benefits around shortening the number of years as well. The Federal Funds rate is very close to zero and the asset purchase program has expanded as explained. Experts predict that there will be increased demand for new homes around summertime when the economy begins to open up and life starts to return to some sense of normalcy. While there is a lower demand for loans, now is actually a great time to buy a home if you are in the place to do so, and to opt for a home that has energy-efficient and innovative materials. If you are going to build a new home, ICFs and Structural Insulated Panels will attract potential homebuyers as the market begins to open up, as will energy-efficient appliances and HVAC. Energy efficiency will be key as homeowners look to eliminate electricity bills, especially during the heat of the summertime.
It is also a great time to purchase a home with in-demand modern amenities while rates are low. This includes synthetic shingles, energy-efficient windows, and efficient roofing materials. If you are going to purchase a home with the intention to increase property value, a kitchen remodel is a great place to start, paying mind to the cost of quartz countertops, the benefits of updated appliances, and small hacks with fixtures and accents that will truly add to the value of the home. These are great considerations for those who are looking to sell as demand for homes picks back up, as now is a great period to tend to renovation projects that you’ve been putting off.
It is also a great time to consider national vs regional demand. There are some regional housing markets that have been hit harder than others, so that, of course, factors into the decision to purchase amidst a pandemic. It is also likely that the absolute perfect dream home may not be on the market right now, but these renovation projects can help craft any home into your dream spot.
Matt Lee is the owner of the Innovative Building Materials blog and a content writer for the building materials industry. He is focused on helping fellow homeowners, contractors, and architects discover materials and methods of construction that save money, improve energy efficiency, and increase property value.