Should I buy a house during a pandemic?

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You have been planning to buy your first home this summer or fall, and have spent years preparing for this purchase. But considering the negative impact the coronavirus pandemic has had on the economy, you‘re wondering if you should go through with your plan. No one can say when this pandemic will come to an end, or what kind of lasting impact it will have on the economy. Experts can only look at past economic crises and downturns to try to predict what the shortterm and long-term financial future will look like. Let’s take a look at the mid-pandemic housing market and explore the wisdom of purchasing a home during a time of economic instability. What does the current housing market look like? Ironically, home sales in February 2020 were the strongest they’ve been in the country since 2007, topping 5 million sales. Factors like falling interest rates and a booming economy contributed to the thriving housing market, but just a few months later, experts already are seeing a decline in the buying trend. This downturn has likely been triggered by the economic devastation caused by the outbreak, including widespread job insecurity, thousands of shuttered businesses, and millions of employees on leave from work for an indefinite period of time. Practical reasons – people worried about their health, being confined to their homes and social distancing rules – also likely contributed. Does it make financial sense to buy a house now? A dwindling housing market does not automatically mean this isn’t a good time to buy a house. In fact, times of financial uncertainty generally lead to falling mortgage rates and even a possible easing of credit qualifications. Mortgage rates have already reached a record low, and some experts predict rates will remain low throughout 2020. Some market experts believe the coronavirus pandemic will cause an eventual spike in home sales, as buyers, fearing a recession, will desire the stability and control that homeownership brings. A fixed-rate mortgage will not be subject to the peaks and valleys of a volatile national interest rate. Before you jump into a home purchase, take a step back and look at your entire financial picture. Consider the following: • How stable is your income? If you have any reason to believe you might be facing a layoff, you may want to hold off on your purchase. • How long do you plan on living in this home? If you anticipate living in your new home for many years, it can be a great time to lock in a mortgage at a low interest rate; however, if you plan on selling within the next few years, you may face a loss due to a falling housing market and unstable economy. • Will you have savings left after going through with the purchase? As the economy heads toward a probable recession, this is not the best time to be without a savings cushion. The pandemic has destroyed all kinds of plans, from vacations to weddings, parties and more. That doesn’t mean you need to put your plans of buying a house on hold. If you can comfortably afford the purchase and your income isn’t threatened by the economic instability, the favorable interest rates can make this a good time to buy a new home. If you’re in the market for a home mortgage loan, it’s important to choose a lender you know will give you honest answers, low rates, and exceptional service. To learn more about a Belco Home Mortgage Loan, stop by one of our 14 branch locations, or call us at 800-642-4482. You can also view current rates or apply for a loan 24/7 at www.belco.org.