Residential Real Estate, Culture, & Lifestyle Consultancy in Los Angeles

Impact of the Coronavirus on the U.S. Housing Market

The Coronavirus (COVID-19) has caused massive global uncertainty, including a U.S. stock market correction no one could have seen coming. While much of the news has been about the effect on various markets, let’s also acknowledge the true impact it continues to have on lives and families around the world.

With all this uncertainty, how do you make powerful and confident decisions in regard to your real estate plans?

The National Association of Realtors (NAR) anticipates:

“At the very least, the coronavirus could cause some people to put home sales on hold.” 

Currently, I've seen no impact on the activity of homes going into escrow but that can change. Gov't. offices like the Counter Recorder (the dpt. responsible for recording title transfers) are still operating at a reduced capacity. But if the crisis worsens, it's possible that these types of departments could shut down altogether. That's something to think about.

When there’s fear in the world, we usually see lower mortgage interest rates as investors flee stocks for the safety of U.S. bonds. This connection should be considered when making real estate decisions.
According to the National Association of Home Builders (NAHB):

“The Fed’s action was expected but perhaps not to this degree and timing. And the policy change was consistent with recent declines for interest rates in the bond market. These declines should push mortgage interest rates closer to a low 3% average for the 30-year fixed rate mortgage.”

Although mortgage rates dipped sharply and were hovering near 3%, they've since shot back up and are closer to 4%. The sharp decline was short lived. Even still, rates at 4% are historically low.

My last thought - The impact of the coronavirus pandemic could have long lasting effects on the economy. When we eventually get through the worst of the spread, businesses are going to experience a financial impact from the economic halt. How bad will it be? That remains to be seen, but the impact of shutting down businesses for any period of time will effect the owners and employees alike. 

Bottom Line

The full impact of the Coronavirus is still not yet known. It's in times like this that I pay extra close attention to what's happening around the world so I can share that with you. You'll know what I know so you have more clarity on what's happening in the real estate industry. In the meantime, let's all continue to do our part to slow and eliminate this threat. Wash your hands, practice social distancing, and encourage others to do the same.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Explore LA Living does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Explore LA Living will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

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1 Comment

Cathy Ohnstad - March 18th, 2020 at 7:32am

Hi James!