Investors are fleeing to safe-haven investments amid coronavirus fears, pushing U.S. mortgage rates to new lows.
As the coronavirus spreads across the globe, the U.S. housing market is bracing for the economic fallout from the epidemic, which was first identified in Wuhan, China, on December 31, 2019. The rapidly spreading disease, named COVID-19, has contributed to projections that foreign real estate investment will plunge considerably this year.
Florida was a magnet for foreign buyers, followed by California. Chinese home buyers have had the largest presence in California and New York markets. However, the luxury real estate market has seen Chinese buyers, who had been dominating that market, quickly vanish from it. With concerns rising about a slowdown in China’s own debt-laden economy,reports that the Chinese government “imposed capital controls to clamp down on splashy overseas property deals.
“China is the world’s second-largest economy, with a worldwide supply chain,” realtor.com reports. “So what happens there affects businesses around the world, which then affects global financial markets. Amid market turmoil, investors tend to pull money out of the stock market and park it in safer, more stable U.S. Treasury bonds. And when bonds are strong, mortgage rates fall.”
“Coronavirus fears are hitting financial markets, driving stock prices lower and bond yields to record lows as investors stampede to safety,” he said. “Don’t let short-term concerns cloud your long-term thinking and prompt you into knee-jerk reactions. Stay the course, and if you’ve been waiting for a better buying opportunity, the stock market is 3 percent cheaper today than it was Friday.”, which could spark a flurry of refinancing and home buying.
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