5 Summer Home-Buying Trends
Upward pressure on home prices, competitive mortgage rates and virtual home tours are a few factors shaping the housing market in Idaho and Utah.
The housing market — like many things in 2020 — looks a bit different this year.
After the COVID-19 pandemic stalled the typically bustling spring homebuying season, home sales started to pick up in May as restrictions were lifted. Now, mortgage professionals expect the real estate market to heat up even more during the summer months.
Here are five home-buying trends to watch for this summer.
Summer home-buying trend #1: Low supply will put upward pressure on home prices
While the coronavirus pandemic has disrupted nearly every aspect of the economy, the good news for homeowners is that home values have largely remained steady.
“Despite furloughs and layoffs, home values are stable, though some zip codes may have seen a slight decline,” says Mike Gould, Mortgage division manager for Zions Bancorporation.
Now pent-up demand — particularly in already tight housing markets — could put upward pressure on prices.
Summer home-buying trend #2: Homes will sell relatively quickly
Even in March and April — as widespread lockdowns and stay-at-home orders discouraged would-be sellers from listing their homes — inventory moved quickly, Gould said, with many home sellers receiving multiple offers.
As restrictions eased in May and listings increased, homes continued to spend a relatively short time on the market — a trend expected to continue through the summer.
Nationwide, homes sold in May were listed for a median of 37 days, according to RedFin, a national real estate brokerage. Hot housing markets like Boise and Salt Lake City saw significantly shorter times sell times: 10 days in the Boise metro area and 20 days in the Salt Lake metro area.
Summer homebuying trend #3: Mortgage rates will remain competitive
Mortgage rates reached historic lows in June as the benchmark 30-year fixed-rate mortgage dipped to 3.43%. That rate could fall even lower, according to Fannie Mae, which recently forecasted 30-year fixed mortgage rates dropping to 3% later this year.
These low interest rates will continue to make homes more affordable for potential homebuyers, and also present opportunities for existing homeowners to refinance your mortgage and save on monthly payments.
Summer homebuying trend #4: Virtual tours and online applications will take center stage
In an era of social distancing, people are using technology in new ways to sell and shop for homes, opting for virtual tours and online open houses over traditional realtor showings.
“Use technology and digital services to help narrow your home search,” Gould says. “With an online application like Zions Bank’s Zip Mortgage you can get preapproval and do it all digitally.”
Summer homebuying trend #5: Young buyers gravitate to fixer-uppers, new construction picks up
A phenomenon some attribute to the popularity of HGTV programming, a growing number of home buyers — particularly young buyers — are opting to fix up older homes rather than pay a premium for new construction.
“They are buying their first home in the neighborhood they want to be in,” Gould said. “They’re not afraid of redoing the kitchen and bathrooms.”
Still, new construction continues to perform well, gaining momentum recent weeks. Volumes of Zions Bank’s One-Time Close Construction Loan rose in May and June, particularly in Utah’s Wasatch Back region and rural Idaho, according to Gould.
If you’re a prospective homebuyer in 2020, give yourself every possible advantage
If you’re seeking to close on a home this year, you’ll benefit from having a mortgage provider with a streamlined application process. Zions Bank’s Zip Mortgage* allows clients to complete their application in 10-15 minutes and offers a 24-hour automated underwriting system.
If tight inventory has you looking to build rather than buy, consider a Zions Bank One-Time Close Construction Loan*. This loan bundles the lot purchase, construction and permanent loan in one transaction — which means there is only one set of home loan closing costs and loan documents. To learn more, contact a Zions Bank Mortgage loan officer.
*Loans subject to credit approval. Terms and conditions apply. See a banker for details.
Kallee Feuz is a Public Relations officer for Zions Bank.