With the global outbreak of coronavirus (COVID-19), many countries are going through an unprecedented situation in terms of economic change. This especially holds true for the U.S., which is currently experiencing landmark moments in the financial sector. This includes The Federal Reserve’s $1.5 trillion injection into the economic market, which allows flocks of investors and stakeholders to take shelter under government debt.
That phenomenon isn’t limited to a single segment, and has many far-reaching effects across a number of industries. As one of the largest sectors of the U.S. economy, the California real estate market is front and center of this development. From modification in buyer behavior to a change in San Diego mortgage rates, the industry is seeing a wave of rapid evolution.
San Diego Mortgage Rates Have Dropped
Over the past few days, the mortgage rates in San Diego have dropped by a significant level. While this has caused a shift in a longstanding market, it has also made homes more accessible to a variety of potential homebuyers.
At 3.19 percent for a 30-year fixed-rate mortgage, America’s Finest City currently boasts some of its lowest mortgage rates in recorded history. Ever since these rates debuted in the first week of March 2020, they have opened new doors to affordable housing.
The fact that this shift comes in a market with high demand makes it even more profound, especially if you have been looking to buy a home in San Diego for a while.
The Federal Reserve Has Cut a Benchmark Rate
With the COVID-19 outbreak in full force, interest rates in general have plummeted all across the globe. Following this trend, the economic markets in the U.S. also took a dive, which ultimately led to the Fed cutting its benchmark federal funds rate. With a drop in bond yields, mortgage rates were set to follow the trend. And they did.
With these developments, the overall market trend of lower interest rates had an expanded effect on various markets, and also influenced San Diego mortgage rates to touch their current percentage.
The developing situation also means that if you are looking to buy a home in the area, you might benefit from even lower rates in the upcoming months.
Lower Rates With a Smaller Inventory
According to some experts, the current drop in mortgage rates for San Diego as well as other housing markets aren’t limited to the next few days. Since the novel coronavirus situation is currently developing, it is likely for mortgage rates to go even lower.
But that’s where it gets interesting.
Some experts take a different approach to this analysis, and point out the shortage of inventory in San Diego. It is a significant factor that asks for a closer look: In January 2019, San Diego had 5,884 homes listed for sale. As of January 2020, it only had 4,186. If demand drives up, then a shrinking inventory may end up ascending San Diego mortgage rates.
With this in mind, many San Diego homebuyers who previously couldn’t afford certain listings are now doubling down on closing. In case you do not want to wait on further projections and consequently watch listings slip through your fingers, then you can use the current opportunity to buy the home of your dreams.
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