The global pandemic has had numerous impacts on society over the last five months, and as we wait to see how the reported 40 million Americans will fare with eviction, there's a new trend worth reporting on today in terms of buying intent. According to an article that ran on CNBC, searches for real estate rocketed up to new heights in July as people are looking to move for one reason or another.
Real Estate Searches Surge in July
In the article, it was reported that Fannie Mae's monthly home purchase sentiment index went backwards in July. In more simple terms, the number of responding participants who opined that it was a good time to buy a house dropped from 61% down to 53%.
However, Google searches ballooned for the phrase “process of buying a house.” And when we say ballooned, it went up a whopping 950%. Additionally, the term “minimum credit score to buy a house” started garnering more searches. Lastly, the search volume for “can you use your 401(k) to buy a house?” rocketed up an astounding 2,800% in the last three months.
So what does all of this mean?
As home sales surged (we reported just last month about the difficulty of buying a home in some areas) and surpassed expectations despite the pandemic, homebuilders saw major upticks in buyer traffic. Searches for anything related to buying a home soared over the last 90 days.
So while we can say that there is a decline in consumer confidence going on right now, the curiosity that consumers have is certainly not. (Real estate agents, hang tight, things will turn around.)
Mortgage rates are definitely helping the consumer optimism and curiosity, as we see all time lows intriguing hopeful buyers that a quick turnaround will allow the economy to return to normal in tandem with allowing them to scoop up a property at a solid interest rate.
Not ironically, the searches in Google for “refinance home loan calculator” surged almost 4,000% last week according to Google's own tool, Google Trends. Some curious and perhaps hopeful searchers looked up “how low will mortgage rates go,” as that term also saw a huge demand, seeing four times it's normal volume.
As our earlier commentary talked about, there are bidding wars for the sales that are happening. Here's an excerpt from the CNBC article:
Just over half of the offers submitted to Redfin agents faced a bidding war in July, according to the national brokerage. Competition was highest for single-family homes, followed by townhouses and then condominiums.
Stay tuned for more updates as we keep our pulse on the economy and real estate market, 24-7-365.