Coronavirus attacks the real estate market

If you were born before the year 2000 then you will have the ability to talk about the two greatest economic depressions our country has seen in the last 50 years.


We saw the economy tumble due to the real estate market in 2008, and now we’re in the midst of a pandemic the likes of which of we’ve never seen.

This downturn is much different than the housing market crash, during the 2008 recession we saw real estate prices tumble and foreclosures skyrocket, people have expected home values to mimic 2008, but the opposite has happened.


When the country declared a national emergency and the stay at home orders were put into place, there were massive layoffs, people assumed that real estate values would decline as foreclosures took hold. We actually saw the opposite effect. Partially due to lenders tightening the purse strings in anticipation of more job loss.  For a week home buying stopped dead in its tracks.


This adjustment in lending created a niche for higher credit score, conventional buyers. People that could afford larger down payments and more competitive offers.


But with the stay at home order in place many would-be sellers chose not to sell their homes, but people still continued to buy. This caused the already scares inventory to be eaten up even more. When inventory is low and demand is high, prices skyrocket.


That is exactly what we’re seeing today,  This video will explain even further:



When we have an economic downturn the federal reserve typically decreases the cost of money which lowers interest rates in an effort to stimulate the economy.


With fewer houses on the market and rates dropping Refinance loans became very popular.  With 15-year fixed rates as low as 1.75 (paying points) in 30 year fixed in the mid twos, this caused a wave of pre-existing homeowners to redo their mortgages when they saw   Interest rates are at an all-time low.


With the ever-increasing home values due to people aggressively paying more for houses, it has created a significant increase in equity and home values.


It’s the perfect storm for a refinance boom, low interest rates and high equity.


The future is uncertain, but if you have a reliable job and want to save money, this is a great time to consider refinancing.  The money is plentiful and cheap, and your home value is at an all-time high.





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Executive Mortgage