If you were hoping to make a significant purchase this year like a car or a home, the coronavirus pandemic and the recession may have changed your plans. However, you may find that it's still a good idea to buy, assuming you can afford to, experts say, since both prices and interest rates are low.
Feel free to follow through with your plans, provided that your job and financial situation are stable, says Dawn Doebler, senior wealth advisor and principal at The Colony Group. "Ask yourself: 'Is this a purchase I was planning on making anyway?'" she advises. If so, "it may make sense to go ahead and get it at a lower price."
Here's how the pandemic could affect pricing on two big-ticket purchases.
Vehicles have seen dramatic price increases in recent years, with average monthly payments for leases and loans topping $500. But with showrooms closed and prospective buyers staying at home, dealers in 2020 are struggling to move cars off their lots.
"Nobody is buying cars," Chris Rupkey, chief financial economist at MUFG Union Bank, recently told CNBC. He cited reports that show car sales have declined by more than 25% in response to the pandemic.
Video by Jason Armesto
As a result, many car brands are already offering incentives and discounts to those willing to shop from home, like 0% financing for several years in some cases as well as deferred payments and other deals.
Experts expect those offers could get even better later this year when dealerships can resume normal operating procedures. A majority of car sales are initiated by walk-in customers, according to a 2019 report from Cox Automotive, and the loss of those customers is pushing dealers to make concessions.
In general, experts say, consumers should look for certified pre-owned vehicles to get the most bang for their buck and avoid luxury brands, which have higher sticker prices and are more costly to maintain.
Home sales are drying up, too: Over half, or 55%, of sellers have put their listing on hold or taken it off the market, according to recent data from Clever Real Estate. The report also found 80% of buyers have either decided to postpone their search or spend less money.
If you are still in a good financial position to buy a home, you may be able to take advantage of the dip in the market, experts say.
A report from Fannie Mae says that home prices could fall an average of 15% during 2020 because of the pandemic. And Clever's report found 27% of sellers have already reduced their asking prices.
Plus, you may be able to lock in a low interest rate on a mortgage as rates are near all-time lows. That could potentially save you thousands over the life of the loan, says Glen Smith, a certified financial planner at Texas-based Glen D. Smith & Associates.
Video by Jason Armesto
If you're ready to buy and know what you want, you don't necessarily need to wait until the pandemic resolves — although the economy has made getting approved for a mortgage may be more difficult than it was a few months ago, and your ability to tour properties in person is limited.
On the other hand, if you're more comfortable waiting for the crisis to subside, use this time to make sure you're in a good position to make an offer when the timing feels right. That means continuing to save for your down payment, improving your credit score so that you're eligible for the best mortgage rate, and going over the numbers to make sure you're prepared for all of the hidden costs of homeownership.
"Think about the other costs that are attached" to big purchases like a house, says Doebler. Factoring in costs like maintenance, insurance, and taxes can help you make sure you're buying a home you can afford.
More from Grow: