As many experts forecasted, fears surrounding the coronavirus have seeped into various financial markets and now the effects are being felt as the US stock market took a major hit this past week. But while other markets are being negatively affected, the real estate market remains on top. Now could be a good time to invest in real estate or refinance your investment property.
The Current Volatility of the Stock Market in 2020
With new cases of the coronavirus popping up around the world almost every day, traders in the stock market seem to be buying and selling with great volatility, most likely through computer trading.
Most notable among the drops in the stock market this week was the Dow Jones Industrial Average which, after a drop this past Wednesday, has accumulated a total loss of more than 2,000 points. The worst-performing Dow Stock is reportedly Disney which is now trading for more than 3% lower after the CEO, Bob Iger, resigned.
The S&P 500 and the Nasdaq Composite also saw major drops this week.
How Do the Drops in the Stock Market Affect Real Estate Investments?
Although real estate stocks are also suffering, property investment is likely to see a boost from the current state of the stock market. Along with the drops in the stock market, the 10-year Treasury note fell to 1.3%, hitting a record low. The 10-year Treasury note and the 30-year fixed mortgage rate have a kind of direct relationship- when the 10-year Treasury note drops, so do mortgage rates. And this is exactly what players in the real estate market witnessed this week as the 30-year fixed mortgage rate fell to around 3.34%.
Bankrate reported that the rate is now hovering around 3.75% which is still very close to historic lows.
Wait or Invest in Real Estate Now?
There is speculation of whether or not mortgage rates will drop any further following the volatility of the stock market and the drop in the 10-year Treasury note. Bankrate surveyed experts in the market for their mortgage rate predictions for the timeframe of February 27- March 4th, 2020:
- 10% said mortgage rates will rise
- 60% said mortgage rates will fall further
- 30% said mortgage rates will remain steady (± 2 basis points)
If you are in the real estate market looking to land a mortgage and buy an investment property, this week may be the best time to make a move and invest in real estate according to the majority of surveyed experts.
Whether you plan to wait out the week or buy investment property today, you need to have a profitable real estate deal in hand to move quickly. Using Mashvisor’s real estate investment tools, you can find a high return investment property in 15 minutes. Start your search now and be ready to take advantage of the low mortgage rates.
And if you wish to refinance a rental property, now is a good time to lock in a lower rate and start saving money every month.