Due to Corona virus Pandemic, International financial markets have been consistently experiencing the various challenges of containment as well as the threat to international economic growth. In the US, long-term interest rates have a heavy drop-down that was never seen in the past because of the economic and financial impact.
While the full effect of difficulty remains to be seen, it’s evident that the virus has the potential to cause significant disruptions to business.
Will this lower Interest rates help the real estate investors?
Favorable interest rates help to make commercial and residential real estate financing more affordable, and this is good news for investors. When investors start thinking about investing in the stock market, they tend to sell their stocks. Few of them started buying bonds, the demand for bonds make increases the price up. In other terms, mass selloffs in the stock market requires loads of cash that needs to be invested. The higher bond rate and the lower interest payment are often relative to the price. Mortgage prices are lower when bond yields are lower.
If you are a house flipper, you can get a lot of benefits because of the lower interest rates as they make home more affordable. The lower interest rates provide an opportunity for investors. Adjusting real estate portfolio helps to boost revenue and protect against risk, because the level of interest rates in the economy affect the way on certain investments, such as stocks, bonds, and real estate.
If you are a real estate investor, it’s a great time to refinance because you can benefit from lower rates.
Foreigners Buyers are stimulating buying activity:
Residential real estate in the U.S appears for investors, especially single home rental houses. Foreign investors are encouraging buying in the U.S. In this pandemic situation many investors are quickly moving their funds into hard assets, such as real estate in stable areas such as in the U.S. So, if you are thinking about making an investment on real estate property, it’s a great time to invest and earn some money.
The Interesting thing is many of the foreign investors are not even visiting the U.S. in order to evaluate their houses. Instead, they are buying houses through online.
Reduced Access to materials:
According to the National Association of Home Builders, most of the home building materials in the U.S. are imported from China. In case significant lag in product delivery makes the home construction on delay. Also, home Construction delays occur due to various factors, such as lack of available land, construction cost, and the shortage of construction labor. Home sales are largely depending upon the number of homes that they built. As an investor, if you invest in lower inventory means you have a chance to get more offers on your property. So, you can get advantage of this new demand.
The Impact of corona virus causes minor slowdown, it may put a limitation on home demand. However, this would be usually happening in competitive markets, but it doesn’t let down the home prices in the U.S. It is likely to just slow down the speed and we expect gradual price increasing in the future.