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The Coronavirus & Mortgage Rates


As we have seen over the last couple of weeks, the Coronavirus is shaking financial markets and it’s hard to know when things will start settling down. So far, fears have prompted mortgage rates to drop. Investors are pulling their money out of stocks and putting it into steadier U.S. Treasury bonds—and when bonds perform strongly, mortgage rates tend to dip, realtor.com® reports.

Although the coronavirus may slow home sales in some segments of the market, low mortgage rates will continue to encourage buyers and sellers. Refinances are hot right now and some companies are finding it hard to keep up with inquiries. The 30 year fixed is now below 3% (depending on credit) and that creates a huge incentive to make a move now.

The impact is still unknown at this time but it is assumed that home sales may slow in areas where there is discretionary buying. Since the stock market is down, people have less cash to spend so new investments may be on hold. On the flip side, people with larger cash holdings or cash down payments may decide that now is the best time to buy.

Although the Monterey Peninsula does not have a big Chinese buyer pool, other areas of California do. Foreign purchases in the U.S. over the last few years have been slipping but the Coronavirus could create a larger vacuum, according to the National Association of REALTORS®.

There are a lot of unknowns right now and where there is a down side, there is always an up!

Source: Realtor Magazine, March 2, 2020

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Sotheby's International Realty
3775 Via Nona Marie Suite 100, Carmel CA 93923
831-624-9700

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Debora Sanders is a real estate salesperson licensed by the state of California affiliated with Sotheby's International Realty. Sotheby's International Realty is a real estate broker licensed by the state of California and abides by equal housing opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description. All measurements and square footages are approximate. This is not intended to solicit property already listed. Nothing herein shall be construed as legal, accounting, or other professional advice outside the realm of real estate brokerage.

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