Uncertainty is high right now in the real estate markets. News of the COVID-19 vaccine from Pfizer has the stock market soaring while the continuing economic instability has main street worried. Real estate has nonetheless been affected by the news cycles with two trends this week:
Decreasing mortgage rates: The U.S. experienced an uptick in mortgage rates last week after the election results were confirmed which correlated to the spike in the 10-year Treasury rates. The market has since cooled down and pulled the mortgage rates down with it. This could lead to an increase in home purchases in the coming weeks which have been decreasing week-over-week since the boom in late August. For reference, as of November 10th:
- The 15-year mortgage rate is at 2.50% (down from 2.65% last week)
- The 30-year mortgage rate is at 3.02% (down from 3.07% last week)
- The 30-year jumbo mortgage rate is at 3.07% (down from 3.12% last week)
- The 30-year refinance rate is at 3.18% (down from 3.19% last week).
Decreasing rents: New data from Apartment List highlights the impact that COVID had on rental prices within major metropolitan cities across America. As expected, big cities took big hits. San Fransisco leads the pack with an 18% decrease in rental prices start of the year; New York trails behind at a 13% decrease since the start of the year; And Boston sits in third place at around 8%. We can't determine how long this trend will last. Homes are selling like hot cakes and people are moving around the country at record rates. Big cities will likely recover but for the time being, renters have the upper hand on their landlords.