Is it time to take advantage of the current attractive mortgage rates?

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May 22, 2020
is it the best time to take a mortgage?

Due to the COVID-19 pandemic and the economic downtrend, mortgage rates are at the lowest rates they have ever been. Is it time to purchase property and take advantage of these low rates?

Coronavirus has affected the NYC real estate market in various ways. While some impacts are negative, others can be seen in a positive light. A few changes the market has had to make in order to survive during this pandemic includes transitioning from traditional in-person home showings to virtual ones.

At the start of the pandemic, many sellers also pulled listings from the market and many others held off on listing their properties in fear of falling prices. As a result, the real estate market found itself with an even smaller supply pool. However, the lack of demand for housing in NYC due to the pandemic and stay-at-home order balanced out the small supply pool of available housing. This led to a semi-frozen real estate market in NYC.  

However, for those still researching housing, there have been many price drops in listings on the market. This includes both rentals and homes for sale in NYC, with Manhattan seeing the most listings with price drops, followed by Brooklyn. This discount in prices for properties along with low mortgage rates during this time can be a great opportunity for those looking to move, purchase a starter home, or even invest into property. These two factors are contributing to a faster than expected recovery in buyer demand, which means as long as this keeps up, the market will be able to recover relatively quickly.

Are mortgage rates going up or down in 2020?

As of May 2020, we are seeing the lowest mortgage rates ever with an average of 3.28% for a 30-year fixed mortgage. Looking at the 30-year fixed mortgage rates, they have already been low with the average in January 2020 being 3.72%. However, these rates have dropped even lower in just four months. As this is just an average, some lenders are even offering lower rates than this, while others can be higher.

So why are mortgage rates right now so low? This is due to the Federal Reserve cutting short-term rates and putting money into the mortgage finance system by buying many mortgage-back securities. By doing this, they are ensuring lenders will have money to lend to future home buyers. 

So how is the mortgage rate calculated and what factors affect it? There are various factors that go into mortgage rates. This includes credit score, loan-to-value ratio, overall economy, and much more. The biggest factor in determining the mortgage’s interest rate is the secondary market where mortgages are bought and sold. This is where lenders sell mortgages to investors in order to get their money back right away at a profit.

These investors are the ones who determine how high or low your mortgage rate will be since lenders offer an interest rate that these investors will be willing to buy. While many of these factors are out of your direct control, it is important to shop for a mortgage with different lenders to see where you can get the best deal. 

Should you buy a house in NYC right now? With the current low mortgage rates, it can be a great idea to look into purchasing property right now. This is because the current rates might not stay as low as it is now in the coming months as many believe the rates won’t be pushed any lower.

Additionally, according to Steve Kalifowitz, President of Localize, many people will be looking “to invest in more stable assets like real estate.” He also stated that “once people will be able to leave the house freely, we should expect the rental market to come back quickly” and “the sales market may come back fast too if the economy stabilizes.”

What would make your next home perfect?
Find it now on Localize ✨

Here are a few lenders with low rates right now:

Home price drops in NYC

If you’re looking to take advantage of the historically low mortgage rates right now, there are plenty of homes for sale in NYC with price drops. Localize is here to help you make home buying in NYC an easy experience. These are just a few discounted listings along with their percentage discounts:

3215 Avenue H, #6H

Space: 1 bed, 1 bath

Neighborhood: Flatbush, Brooklyn

Price drop: 7%

Current price: $325,000

This Flatbush apartment has a price drop of 7% and the building it is located in has no violations, no recent complaints, and no elevator issues. It is a renovated space that features a terrace with views of Downtown Brooklyn and Manhattan.

According to Localize’s insights the apartment has limited natural light with only about 3.5 hours of direct sunlight during the summer. There are eight construction sites nearby with one estimated to end in 2020, four set to end in 2021, one in 2022, and two in 2023. The neighborhood has an above average crime rate and the nearby school rates low.

3215 Avenue H, #6H

701 Lafayette Avenue, #2B

Space: 1 bed, 1 bath, 570 sqft

Neighborhood: Bedford Stuyvesant, Brooklyn

Price drop: 7%

Current price: $519,000

This Brooklyn apartment has a 7% discount and the building it is located in has no violations, no complaints, and no elevator issues. The space is located on a tree lined block and features white oak flooring, in-unit washer/dryer, and kitchen with white quartz countertops and full range Bosch and Blomberg appliances.

The neighborhood has slightly above average crime rates and there are 5 construction sites nearby with one estimated to end in 2020, one in 2021, two in 2022, and one in 2023. The apartment is located near Herbert Von King Park and the neighborhood has plenty of block parties and local festivals during the warmer months that are great for families. 

What is today's 30 year fixed mortgage rate?
701 Lafayette Avenue, #2B

53-24 201 Street

Space: single-family home, 4 beds, 3 baths

Neighborhood: Auburndale, Queens

Price drop: 7%

Current price: $1,120,888

This single-family home has a price drop of 7% and is a completely renovated space. It features large bedrooms, california closets, oak floors, formal dining room, eat-in kitchen, living room, and yard with patio. According to Localize’s insights, the building has no violations and no recent complaints. Additionally, the neighborhood it is located in has a below average crime rate.

Are mortgage rates going down in 2020?
53-24 201 Street

61 East 77 Street, #8E

Space: studio, 1 bath

Neighborhood: Upper East Side, Manhattan

Price drop: 6%

Current price: $419,000

This Manhattan studio has a 6% price cut and is a rare amenity as only four other listings also have an air conditioner and only two others have in-unit laundry. It is located within the Upper East Side Historic District and the space is bright and sun drenched with 10.5 hours of sun during the summer. The apartment features 11-foot ceilings, stainless steel appliances, hardwood floors, oversized arched windows, dining space, and an in-unit washer/dryer.

The building has no violations and no elevator issues, but there have been 18 recent complaints that mainly consist of heating or hot water issues. The neighborhood it is located in has a below average crime rate and there is a hospital nearby which can be great for emergencies.

Should I lock my mortgage rate today?
61 East 77 Street, #8E

830 Park Avenue, #1A

Space: 5 beds, 4.5 baths

Neighborhood: Upper East Side, Manhattan

Price drop: 6%

Current price: $8,000,000

This Manhattan co-op has a 6% price drop and is located within the Upper East Side Historic District. The building it is located in has no violations, no recent complaints, and no elevator issues. The apartment gets moderate natural light with about 5 hours of sunlight during the summer. It’s a luxury townhouse that features a wood burning fireplace, oversized living room, dining area, bay windows, chef’s kitchen, recreation room, wet bar, home gym, and much more. The neighborhood it is located has below average crime rates and is near a hospital. This can be great for emergencies but there could also be ambulance siren noises.

Are mortgage rates dropping?
830 Park Avenue, #1A

24 Bennett Avenue, #31A

Space: 1 bed, 1 bath

Neighborhood: Washington Heights, Manhattan

Price drop: 5%

Current price: $399,000

This Washington Heights apartment has a 5% discount and the building it is located in has no violations, no recent complaints, and no elevator issues. The space has limited natural light with only about one hour of direct sunlight in the summer. It features a large living room with a dining area, remodeled eat-in kitchen, renovated bathroom, eight windows, hardwood floors, and king-sized bedroom.

The neighborhood has slightly below average crime rates and the area is known as “Little Dominican Republic” with plenty of food and cultural amenities nearby. The apartment is also near the George Washington Bridge that features views of Manhattan and an escape to nature. 

Compare Current Mortgage Interest Rates
24 Bennett Avenue, #31A

157 East 72 Street, #1H

Space: 1 bed, 1 bath, 700 sqft

Neighborhood: Upper East Side, Manhattan

Price drop: 12%

Current price: $550,000

This Upper East Side condo has a 12% price cut. However, it is important to note that this space is available for investors only and not tenants. It is located within a historic district and has potential for growth as there is 23,425 sqft of space currently unused. The building it is located in has no violations, no complaints, and no elevator issues. The space gets moderate natural light with about 6 hours of sun during the summer.

It features hardwood floors, crown molding, classic sash windows, 22-ft long living and dining area, windowed kitchen, and spacious bedroom with windowed full bathroom. The neighborhood it is located in has below average crime rates and the nearby schools rate high on citywide school quality measures and has strong teaching and leadership.

What is today's mortgage rate?
157 East 72 Street, #1H

With the low mortgage rates along with price drops in many NYC listings, it can be a great time to look for a new home. Localize tells the truth about any home and has insights on all listings in New York City.

We do the intensive research so you don’t have to! Our insights help you avoid unpleasant surprises before it’s too late. Best off all, you can easily home hunt right from the comforts of your own home. Stay safe and happy apartment hunting!

Thinking of your first mortgage? Check out our guide for everything you need to know before getting your first mortgage.

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