Though the Covid-19 pandemic has affected many industries this year, real estate is one that has bounced back surprisingly well. After a minor pause in April and May, the real estate market surged upward during the summer and is expected to continue to perform strongly in the fall and winter.
Why the Market is Strong Right Now
Low interest rates. Current interest rates have been under 3% for over 12 weeks, making buying a home an incredibly attractive option. These historically low rates are incentivizing people to move up their buying plans, which has revitalized the market. With rates expected to remain low throughout the next year, we can anticipate people continuing to take advantage of these rates.
Flight from density. As people continue working remotely, many individuals no longer feel the need to live near their workplace. This has led city-dwellers to move to the suburbs or exurbs to get away from crowds and be more socially distant. This has caused the market along the coast and around the suburbs to experience a rise in home sales.
Housing affordability. The current housing affordability index is 158.9, meaning the median household income has 58.9% more money than needed to afford a home. The index takes into account interest rates, median income and median home prices. With the current environment, consumers have strong buying power, allowing them to purchase homes they otherwise couldn’t afford.
In today’s competitive real estate market, Long & Foster’s integrated network of services makes it easier to navigate the market. We’re here for you and available to meet (virtually) and answer any questions you might have about buying or selling in today’s market.