Covid-19 bids positive impact on housing industry with record low interest rates

Local News

RUSTON, La. (05/19/2020) — Covid-19 may have taken money out of your wallets with furloughs and layoffs. However, for investors in the housing industry, it caused them to move their money into less risky business ventures. As a result, interest rates fell significantly.

“Interest rates plummeted, so it really prompted people to start looking at houses, to refinancing their homes and looking at their investments to see how they can rearrange their money,” said Mortgage Loan Officer with Movement Mortgage, Chelsea Belcher said.

According to Belcher, more people normally look to buy homes during the spring season.

For her, a normal non-pandemic day, it would bring 3 to 4 applications to her desk. Right now that number is between 7 and 10. Across the country, there’s an 11% uptick in mortgage applications.

“People are in their homes, they’re noticing that they’re able to clean out the clutter and sell their home. They’re noticing that it’s not enough space for their family.”

Chelsea Belcher

Mortgage financing giant, Freddie Mac reports historically low-interest rates, down nearly 1 percent in just a year.

However, Belcher says the home buying demand is high, but not everyone is able to take advantage.

“Some of your lower income, lower credit score borrowers, some of the investors, and some of the mortgage companies have tightened their requirements,” she said.

It’s also forced the hand of some homeowners to delay their mortgage payments with a forbearance.

“If you have forbearance, you could potentially have to wait 12 months to get a new mortgage or a refinance. The best thing to do, instead of going directly into a forbearance, is to talk to your mortgage loan officer,” said Belcher.

Freddie Mac says, “Although demand is increasing inventory is low, with no signs of a turnaround.”

The Congressional Budget Office released a report Tuesday saying residential investments are expected to rise 16.7 percent by 2021. It also says as people lose their jobs, the demand for homes will drop.

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