A Time of Great Concern — And For Potential Homebuyers, Great Opportunity
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ith South Carolina still struggling to stamp out the coronavirus and millions of people impacted by job losses and business closings, it hardly seems like the ideal time to buy a home. And yet, record low interest rates and other enticements make this a prime opportunity for those looking to buy a house — rather than just hide in one. “Strangely enough, based on how the mortgage rate environment works, concern can create a great opportunity for optimal mortgage financing terms,” says Kimberly Branham, 2019 Mortgage Lender of the Year (loans over $400,000) for Synovus. “Since bond yields are the foundation for most long-term mortgages, when uncertainty and concern are present, you
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traditionally see bond yields decreasing based on people or entities buying treasuries as a classic flight to safety. So when this happens, rates generally stabilize or decrease, creating better payment options for many. If a person is comfortable in their employment, then getting a mortgage in a time of concern might be a very good thing.”
Columbia Homes Magazine | Summer 2020 | biacolumbia.com
That may seem like surprising news, given that sales of previously lived-in homes dropped 17.2 percent in April, according to a report by the National Association of Realtors, marking the largest single-month fall in nearly a decade. And yet despite the economic tumult caused by the coronavirus, listings are still attracting buyers, and the average on-market duration of 27 days in April was up just three days from the same month in 2019. “I am being told by the Realtors in the Midlands that this is a great time for sellers,” says Shawn Daughtry, 2019 Mortgage Lender of the Year (loan volume $300,000-$400,000) for Ameris Bank. “The inventory is low and houses are moving at extremely rapid paces, and with multiple offer situations being very common.”
Lower rates, lower payments But even though home sales prices are continuing on their upward trend, there are still deals to be had for buyers thanks to historically low interest rates. Interest rates are currently anywhere from .625 percent to 1 percent lower than they were before the pandemic, Daughtry says, which “will give customers great buying power resulting in lower payments, or the ability to afford more expensive houses without overstepping on their budgets.” The interest rate drop applies primarily to conforming loans, which can be sold on the open market, as opposed to “jumbo” loans of more than $424,000, and whose rates are more dependent upon the lender. With the continuing volatility in the market, Daughtry says, the expectation is that the lower conforming rates will continue through the remainder of the year. And even though the tax code was amended in 2017, there remain several tax benefits to home ownership. Most homeowners can deduct the interest paid on their mortgage, the money paid in property taxes, and any payments for
