Interest rates on a 30 year fix rate mortgage, reached a new historical low two weeks ago, going down to 2.86% from the pervious historical low of 2.88%. reached in the second week of July. Last week, Freddie Mac reported that interest rates went up 1/10th of 1% to 2.87%.
Record low interest rates have increased homebuyer demand since March, squeezing the low inventory of homes even further around the country and in Miami Lakes single family market. August number of sales was encouraging with 16 properties selling, as compared to July with 14. So far, September has seen 13 properties sell. Nationwide, August saw a record 19% increase in sales around the country. Further illustrating that real estate is local, since we have not seen such an increase.
Looking ahead, Freddie Mac is still forecasting that interest rates will remain low and should average 3.4% for the rest of the year and possibly even lower, in the first quarter of 2021.
Due to COVID-19, it is expected that home sales will fall to 4.8 million in 2020 and rebound to 5.6 million by the end of 2021, which is below the 6.0 million sales recorded in 2019. Additionally, it is expected that price growth will slow down from 2.3% to .04% in 2021. However, this forecast may change if the economy continues it's upward trend, during the next quarter and the first quarter of next year.
As the summer months ends, it appears that pent up demand from Spring, caused a slight rebound in the U.S. housing market. However, many economist feel that the future is much more uncertain than past economic recessions, due to the unprecedented and sudden economic downturn, caused by the shutdown, due to the COVID-19 pandemic.
The good news is that we have experienced four months of unexpected job growth, after the downturn. It really remains to be seen, if the job numbers stay on an up swing, for the rest of the year. So far, so good!
Due to the current low inventory of properties available in Miami Lakes, we should see a strong seller’s market during the rest of the year, as prices are holding steady. Only 7 properties had a price decrease, in August, while only 3 so far this month.
Thankfully, foreclosures have been few in 2020 in Miami Lakes. Presently, at least 13 of our neighbors have received notice of lis pens, and may be facing foreclosure, in the near future.
Three of these were filed since August 1st and only 1 so far in September. The relatively low number is a good sign thus far, unfortunately, not for these 13 families.
At present, it is hard to tell how many local homeowners were able to negotiate a forbearance agreement with their lender, to put off mortgage payments, if they lost their regular income. Equally as hard, is to be able to determine how many will not be able to resume making payments or default on their loans, by the end of the year, when the forbearance period may end for many homeowners. Nationwide, approximately 4.7 million mortgages are in forbearance, representing 8.8% of all m mortgages.
Hopefully, we won't feel the effects of foreclosures, in our local market, this year. It's just very hard to tell with all the current uncertainty, lack of information and not all sectors of our local economy, returning to normal.
If history is any indicator, we might have reached the high point in home values in July/August. If foreclosures start earlier than anticipated, property values will decline. It may be a good idea if you are thinking of selling within the next few months, to sell now, while property values are high.
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