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    Real Estate you should know

    3 Ways Low Mortgage Rates Impact The Value of Your Home

    The COVID-19 pandemic has had an effect on everything... From travel to toilet paper stock at your local grocery store....

    • Susana Murphy
    • April 8th, 2020
    • 3 min read

    The COVID-19 pandemic has had an effect on everything...

    From travel to toilet paper stock at your local grocery store. However, there’s another effect you might want to keep an eye on if you’re a homeowner: Falling mortgage rates. In the United States, the Federal Reserve cut rates by half a percentage point on March 3 (to keep up with the market), then again by 1.5 percent on March 15 (in response to COVID-19). 

    What does this mean if you’re already a homeowner? The first answer is easy: If you’ve been thinking about refinancing, now’s a good time to lock in a low rate. But if you’re concerned about the value of your home (particularly if you’ve been looking to sell in the next year), the news is a little more complicated. Here’s how the latest low mortgage rates might impact home values:

    ONE

    The number brings out more buyers — typically.

    Low mortgage rates motivate many potential homebuyers to take the leap into homeownership. When there are more buyers than there are homes, supply and demand apply and you can expect property values to increase. However, that’s the expected scenario when there are low rates without a worldwide pandemic. If COVID-19 keeps buyers at home and properties linger on the market, price cuts abound and then create a trend towards lower home values.

    TWO

    Low rates here means low rates elsewhere.

    Interest rate changes don’t just affect mortgages, it also affects savings accounts, CDs and other investments. Lower rates of return elsewhere mean less capital that could go into purchasing real estate, a factor that puts “supply” ahead of “demand.” Ideally, though, lackluster rates of return could motivate potential buyers to put their money into real estate instead, leading to a rise in home prices (and home values).

    THREE

    Buyers could be waiting for even more cuts.

    While no one knows the long-term effects COVID-19 will have on the economy, many anticipate another rate drop to follow. Potential buyers might take a “wait and see” approach, which leads to homes languishing on the market, price cuts and possible trends in lower home values as a result if it’s a long-term issue.

    Overall, the low mortgage rates generally mean good news for sellers, but the current pandemic does add an element of uncertainty that brings caveats. While national trends are an important factor to watch, your best indicator of where your local market is going is by keeping an eye on your neighborhood — and getting in contact with a realtor who already is up on the area.

    While we tried to cover the most common reasons why low mortgage rates can affect property value...

    The other factors that could affect your home’s value might not have been mentioned. We know that every seller has different timelines and priorities. 

    If you’re concerned about how your home’s value could be affected by low mortgage rates, we’re here to listen to your concerns and help walk you through the process.

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    About the author

    Susana Murphy

    508-345-5632
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    I'm Susana Murphy, and I founded ALANTE with a clear vision and a passion for redefining what real estate should be. Let me share with you why ALANTE exists, what we stand for, and what we aim to offer both our valued clients and our dedicated agents. ALANTE Real Estate wasn't just a business venture for me—it was a calling born out of a deep-seated belief in doing things differently, and doing them better. Having been in the real estate industry since 2005 myself as a top producing Realtor, I saw firsthand the immense potential for innovation and improvement. I recognized that traditional practices were falling short in meeting the evolving needs of clients and agents alike. My vision for ALANTE was simple yet profound: to elevate the real estate experience by combining cutting-edge technology combined with story driven marketing and timeless values. In an industry often defined by transactions, I wanted to focus on service. I wanted to create a space where clients felt heard, valued, and supported every step of the way, and where agents could thrive in an environment that prioritizes collaboration, growth, support and integrity. At ALANTE, we believe in offering our clients more than just transactions—we offer them transformative experiences. We understand that buying or selling a home is not just a financial decision; it's an emotional journey filled with dreams, aspirations, and life-changing moments. That's why we approach each interaction with empathy, expertise, and a genuine desire to exceed expectations. For our agents, ALANTE is more than just a brokerage—it's a community of like-minded professionals committed to excellence. We provide our agents with the tools, training, and support they need to succeed, all while fostering a culture of mutual respect, collaboration, and continuous learning. We believe that empowered agents create exceptional experiences for our clients, and that belief is at the core of everything we do. In an industry that's constantly evolving, we remain steadfast in our commitment to innovation and adaptability. We embrace technology not as a replacement for human connection, but as a catalyst for enhancing it. From advanced marketing strategies to streamlined processes, we leverage technology to enhance efficiency, transparency, and results. We don't just meet industry standards—we set new ones. We believe in raising the bar and redefining what it means to be a leader in real estate. Our dedication to excellence, integrity, and client satisfaction sets us apart, and it's what drives us to continually push boundaries and exceed expectations. So, whether you're a client looking for a personalized, unparalleled real estate experience or an agent seeking a supportive, forward-thinking brokerage, we invite you to join us on this extraordinary journey. Together, we're not just reimagining real estate—we're elevating it to new heights. Welcome to ALANTE Real Estate, where your vision meets our passion.

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