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Tactical Talking Points During a COVID-19 Volatile Market

 

Helping to keep home buyers and sellers calm.

Following the most volatile week in the history of the lending world, the Fed stepped in on Sunday, March 15th and cut the overnight bank-to-bank and Fed-to-bank lending rate (not mortgage rates) by 1% in order to encourage banks to keep lending. This was a critical move to keep banking and lending from freezing, but it has also led us into uncharted territories. 

This is like nothing our industry or country has experienced before, even our most trusted experts are making the best decisions within the moment. Mortgage rates are fluctuating up and down every hour and the industry has been flooded with concerned home buyers and homeowners. 

Here’s a brief summary of what has been going on:

  • Mortgage rates were at all-time lows on Monday, March 9, for most lenders. 

  • The average U.S. rate for a 30-year fixed mortgage fell to a record low of 3.29% during the week ending March 5, according to data from Freddie Mac. The 15-year fixed-rate mortgage fell even lower to an average of 2.79% during the same week.

  • By Friday, March 13, rates had risen faster than they’ve ever risen in one week.

  • By Friday, March 13, the gap between mortgages and Treasury yields was the widest on record.

  • On Sunday, March 15, the Federal Reserve announced a 1% rate cut.

  • Any improvement in the bond market in the coming days and weeks will most likely only recover some of the huge losses from last week (March 9-13).

For a more in depth overview of the mortgage rates check out this article: "What Is Happening with Mortgage Rates?" 

 

The cause of this disturbance is Coronavirus (COVID-19). While home buyers and sellers may want to push the pause button on buying or selling, the truth is fear has a tendency to lower mortgage rates and stimulate the housing market.  

So how do you help your clients make powerful and confident decisions regarding their real estate plans?

We spoke with Tom Gillen, senior vice president of capital markets at Churchill Mortgage, to gather a few tactical talking points to share with your home buyers and sellers during this uncertain time.

 

1. Avoid crisis-driven decision making

It continues to be a great time to buy and sell a home but it's important to make sure your clients don't choose to buy or sell based on fear. If buying or selling still makes sense for your clients in today's market, take advantage of the opportunity to help them through the process and be their guide. You will be the voice of reason for many clients!

 

2. Rates should never be the reason to buy

No one knows if rates will further drop or if they are going to spike. What we do know is rates are very attractive for home buyers during this time. We are seeing mortgage rates in the low 3% range on a 30-year term (depending on credit, down payment, etc). If your clients have found a home they love with conditions they are comfortable with, they should act now. Don't fool them into thinking that rates may further drop. 

 

3. Be the voice of calm

You are the real estate professional and therefore you are well equipped to handle the emotional rollercoaster of home buyers and sellers. With our world currently feeling unstable, it is so important that you help the situation by instilling confidence into clients. We will come out of this. Our economy will bounce back. Be your clients' place of calm. 

 

As we all work together to do our part during the next few weeks, be safe, and be healthy!
 
 
 
 
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