The global pandemic has affected everybody in one way or another. We learned a “new normal” for beach activity. Buyers found new ways to view Jersey Shore properties for sale as well as. And now, record low interest rates push undecided buyers off the fence and into homeownership.
Record Low Interest Rates
For the last several weeks, we watched as interest rates continued their downward trajectory. Yesterday, Freddie Mac announced that they hit their lowest levels ever since 1971 (the first time the company began keeping track). The interest rates for 30-year, fixed-rate loans hovered around 3% to 3.5% for a while now. But just last week, they fell just under 3% to a reported 2.98%. To put that in context, home buyers paid almost 2% more in November 2018 when interest rates hit 4.94%.
Refinancing Applications Soar
As a result, homeowners scrambled to refinance their home loans for the lower rate. Refinancing applications make up the majority of the mortgage applications lenders currently see in their offices. An increase in home values and decrease in interest rates encouraged homeowners to lower their monthly payments to free up cash to spend elsewhere.
Time to Hop Off the Fence
First-time home buyers also decided to take advantage of record low rates to purchase their first homes at the Jersey shore. The applications from these buyers are also on the rise. Why? It costs much less to buy a home today than it did a year ago. According to Realtor.com, the median sale price for a Margate home is $430,000. If you qualify for the 2.98% 30-year fixed-rate loan, it costs you about $166 less per month than it would have 12 months ago. That’s almost $2000 less per year or almost $60,000 over the life of the loan.
Lenders Begin to Tighten Standards
As American businesses start to open back up, we find out that some temporary furloughs turned into permanent job losses. This affects homeowners’ ability to pay their bills, including their mortgage. In April, 3.4% of mortgages became delinquent. That’s more than even the worst time of the 2008 economic crisis. As a result, lenders have begun to tighten their standards. If your means of employment has remained steadfast, you pay your bills on time, and your credit score is good, you may qualify for the best rate possible in the last 50 years. Talk to your lender today to see how much you qualify for before you start your search. Then, contact me about showing you what’s available at the Jersey Shore.