This past year has created a large increase in business for lenders and altered where people are looking for homes. So, this affects the city living and suburban housing trends.
Since the pandemic has forced many to work remotely, urban residents have begun moving away from city living. Workers within the mortgage industry have learned to adapt to these changes throughout 2020. But, a shift may be coming again.
Continue reading to learn how the COVID-19 vaccines may alter the suburban housing niche.
Why did the city living trend shift?
Almost one-third of Americans have considered moving to less populated areas in 2020. This is due to the COVID-19 pandemic, and people wanting to live in less-crowded areas. Public health has made it clear that living in large cities may be a health risk.
Real estate agents shared that many prospective home-buyers are looking to purchase outside of cities. House hunters are leaving behind the urban city living and looking into suburban housing neighborhoods.
What does this mean for the mortgage industry?
According to real estate agents, many home-buyers looking for suburban and rural homes are searching for second residences. This means that people are keeping their properties in cities but looking elsewhere to temporary getaways.
As mortgage rates remain at all-time lows, many dream of wide-open spaces due to social distancing. It is difficult to predict how the virus will continue to impact real estate as a whole.
The surge in home-buying reflects how drastically the priorities for millions of potential homebuyers have shifted. Urban office spaces are mostly dormant and companies are likely to allow for more remote work. Even after the COVID-19 vaccine becomes more readily available, paying city prices for fewer square feet isn’t as appealing.
The demand for space has grown. This demand also highlights the fact that the same pressures driving prospective buyers out of the city are encouraging those already in the suburbs to stay put.
How could the vaccine affect suburban housing?
The coronavirus can be seen as a tipping point for people wanting a different quality of life outside of city living. But, this may be a shift due to the COVID-19 vaccine.
Vaccines are rolling out and there is the widespread consensus that the worst of the pandemic may end in 2021. Mortgage originators can begin to prepare for another change in mortgage trends.
How can loan officers adjust?
Since the virus created the purchase boom, many loan officers are wondering where to move from here. After all, if the vaccine does reach most Americans in 2021, the demand for real estate in suburban areas may go down.
So, suburban housing may not carry the same appeal as a reopened city to borrowers once the vaccines are readily available. However, younger families tend to dislike moving often. This is due to the stress moves can place on young children and the moving process in general.
Overall, the suburban purchase boom may halt with the vaccine being distributed. But, borrowers who moved from the city due to fear of the pandemic in a dense area may stay put in those suburban areas.
Due to ongoing high volumes with purchase business, be sure to focus on planning for when rates do rise. Many expect that rates will move up this year. This can be due to changes in policy or a simple inflation-driven trickle.
The recent refi boom means that we will likely see a refi drought for a long time to come. So, for now, pay special attention to your realtor partners and turn times.
Focus on realtor partners
Loan officers may not recognize the hard work that goes into assisting their mutual client. This includes finding the right home, making an offer, and then negotiating the final terms of the sale. On the other hand, the realtor may not understand the loan process. They may be frustrated by the various obstacles that arise as their client’s loan application moves toward approval.
In the end, you and the real estate agent are a team. So, you need to work together for the happiness of the client. Once you establish a common ground, put differences aside, and focus on teamwork, it will be that much easier to close more deals together.
You can start tracking and measuring your realtor partner relationships through Reffinity in Jungo. For more information about Jungo’s Reffinity feature, click here.
COVID-19 pushed residents to skip town in search of suburban real estate. But, the vaccine distribution may end this suburban purchase boom. If volume is too slow, loan officers have to pivot accordingly. Try to focus your loan officer reputation during this high-volume period. Then, when volumes do drop, your key referrals will still reach out to you.