Buying a Home Post-Pandemic: What Will Look Different?

At this point in quarantine, many Americans have fully acclimated to a new way of living. Chances are, you’ve cleared out that empty room and converted it into an impromptu home office. Your mask for going out in public sits next to your keys and wallet as a new essential accessory when leaving the house. And the money you save on driving your daily commute now goes toward your weekly to-go order at a favorite restaurant. What about when it comes to buying a home post-pandemic?

But the effects of the pandemic will likely prove to be more than these short-term adjustments. We are already witnessing the implications of a world after COVID-19 that will endure far longer than the virus itself, and the home buying process is certainly not immune to these changes. 

Although declines in the economy in the past might have reduced the number of current and prospective homebuyers, the after-effects of the pandemic may not only cause a surge in mortgage applications but also transform how we research and purchase these homes.

To better understand the future of the home buying process, let’s unpack some of the leading trends changing how your family might buy and sell homes in the years to come. 

Home away from the city

As many working professionals and young families relocate from their apartments in the city, is there anything enticing them to move back once the virus has been eradicated? While there are several reasons why life-long city-dwellers evacuated their urban lifestyles, there are markedly fewer incentives to move back any time soon. 

In the face of unemployment, reduced hours, and furloughs, the steep costs of rent in a large city may not fit many household financial equations. This made moving to quieter areas of the country a wise decision, both in terms of economic and physical wellness. The choice to move back to expensive cities, especially while lacking months’ worth of salary, isn’t the most enticing option for many. 

The resistance toward city life is only further compounded by the widespread acceptance and implementation of remote work. The ability to work from anywhere has allowed organizations to remain compliant with social distancing best practices while also enabling employees, who may have only lived in these cities to work in-person at the office, to perform the same job responsibilities in more affordable locations.

With no pressure to work or live in highly populated areas—in the immediate months and years to come—the housing market could see demand spike in suburban and rural areas. Couple this with impressive mortgage rates, which are by some accounts as low as 3.5% for 30-year conventional loans, it’s no surprise that the pandemic will likely lead to a long-term exodus from major cities and city real estate markets around the country. 

Equity toward the future

Among many of the conversations occupying our national consciousness, the pandemic has forced American families to reconsider how they are spending their income and how they can begin building their wealth toward future emergencies. How will you better spend or save your cash to prepare for the next crisis, whenever it might be? 

The answer to this question has led many renters and apartment owners to strongly consider becoming a homeowner despite the current tumult of the world. Though the costs of property taxes, home hardware maintenance, and the monthly mortgage bill certainly make home-buying an intimidating financial decision, your home may not only return your investment but net you a profit in the long run. This can make homeownership a wise choice of an asset for wealth building and protection for future emergencies. 

As opposed to paying your monthly living expenses to a landlord, owning your own house, and paying off a mortgage loan instead allows you to build equity over time. This equity—or the difference between the current worth of your home and your remaining mortgage payment total—can be tapped into and leveraged through various means. 

Older homeowners can use their existing equity to help fund their retirement, while those looking to move can wield their home’s equity and current worth to earn out a profit toward their next house. Though a practice that should be reserved for emergencies, you can also borrow against your equity for quick cash relief. Home equity loans leverage your existing equity, making them a valuable line of defense (should you need it) against future financial strain. 

The pandemic has altered the way Americans think about and save their money, and the past four months have revealed that even several months’ worth of living expenses in your savings account might not be enough. As the world returns to normal, it’s more than likely that people will be more mindful of how they are saving their income and investing in the spaces where they live. 

Virtual reality

Perhaps the world was always headed toward increased integrations with technology, but the pandemic has only accelerated these trends in the brief span of a few months. As communities scrambled to find socially distanced alternatives to nearly every facet of life, technology often played a crucial role in making these transitions successful. In the real estate industry, specifically, the home buying process has been transformed through the implementation of virtual reality technology. 

Realtors have found themselves in the near-impossible situation of having to sell a house without home tours and other viewing opportunities that went against quarantine best practices. As virtual reality capabilities have expanded into several industries, the real estate market has used the software to further the digital home purchase journey. 

Compared to photographs of a listing, 3D virtual tours lend themselves to an immersive experience, allowing users to “walk” through the house as they would in-person. Drone photography, which is capable of capturing the exterior of a home and its surrounding property, even provides a perspective that an open house would be unable to offer while walking the grounds. 

For some realtors and home shoppers, VR home tours deliver a superior buying experience, proving that they are here to stay as a new permanent fixture to the real estate industry. A single real estate agent, who would be capped at a certain number of visitors for home tours each day, can use a VR-guided tour to allow a limitless number of interested buyers to view a home on any given day. And for house seekers looking to relocate across the country, virtual reality will function as a pre-emptive viewing before a final in-person visitation. 

Like any other purchase behavior, the ways we search for, research, sell, and live in our homes will adjust to a post-pandemic way of life. Whether you are a current or a prospective homeowner, looking toward the future with these trends in mind will only better equip you when buying a home post-pandemic.

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