How does the stock market affect your ability to buy a new home? Let's see what the expert, Steven Welch, from Guild Mortgage says.
If COVID vaccines and treatment drugs begin to become available in the next 90 days, this will be an important psychological boost to consumers and business owners, and we will see increased consumer confidence, increased spending, and increased hiring. I believe that the increasing desire for people to not stay cooped up at home and the availability of vaccines and treatment drugs will lead to significant increases in economic activity and an improving jobs picture, starting this fall. I think we will see some markets have home prices declines, but most markets, including the first-time homebuyers and conforming loan balance markets, will fare much better.
The economic value of owning your own home and taking advantage of today's super low 30-year fixed rates, puts you in a stronger financial position than renting. The key is for people to buy homes that they really enjoy living in, with a long-term outlook, rather than speculators who are only looking to flip the home and make a quick profit. A short-term paper loss is nothing compared to the long-term economic benefits a homeowner would receive.
The Fed has been very clear that they will not raise the Fed Funds rate or allow MBS prices to worsen for the foreseeable future and mortgage rates should continue at their low levels at least until early 2021.
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