As the Fed dropped the interest rate to near-zero percent and the president signed the $2 trillion stimulus package passed by congress, the Puget Sound’s housing market continued to move forward. Despite freefalling stocks in March, and the shuttering of many businesses, albeit hopefully temporarily, Realogics Sotheby’s International Realty’s (RSIR) brokers continued listing homes and helping client’s place offers on their next.
“Locally, while so many people are affected by COVID-19, we also have such a large percentage of people who are able to continue working from home, and from them, we’re seeing an uptick in (home) purchases. They’re seeing this as an opportunity,” explains Lysa Catlin with Caliber Home Loans.
Caliber has been business as usual during an unusual time. While lenders, like many of us, have been working from home, they are still able to help clients receive loans. “Appraisals are taking a long time, so we’re asking for a longer time to close on sales,” says Lysa.
There will be effects of the COVID-19 response in the housing market and lending, however. Lysa believes home buyers should expect to see limitations in types of loans offered, like government-backed loans and jumbo loans. It may also impact some of the smaller lenders, who will be less flexible in what they can offer to keep down payments lower.
One takeaway from the stimulus package and the federal government’s action is the view that housing market is “too-big-to-fail.” Treasury Secretary Steven Mnuchin formed a task force to divert some of the $2 trillion stimulus packages to loan servicers to help their liquidity crunch, while Ginnie Mae may also step in by diverting disaster relief fund.
Those currently making mortgage payments who have been financially impacted by the COVID-19 pandemic are able to apply for relief. “On a consumer level, they have essentially allowed clients to have three months forbearance on their mortgage with no negative impact on their credit report. That can be extended up to a year,” says Lysa. “They’re trying to keep people in their homes.”
But for homebuyers and sellers looking to make moves in the current market, Lysa says now is the time to, “make sure you’re working with the best agent and a strong, well-capitalized lender, so you don’t get surprised at the bargaining table.”