Mortgage interest rates, which fell to a 50-year low earlier this week, are keeping Oahu’s real estate market relatively strong even as uncertainties mount over the economic impacts of coronavirus outbreaks.

Sales volume for Oahu single- family homes last month rose 18.8% to 247 transactions from 208 a year earlier, according to a home sales report released Friday by the Honolulu Board of Realtors. The report also showed that the median sale price for single-family homes dropped 3% to $765,000 from $789,000 in February 2019.

However, the report said the median price drop was largely due to a boost in midrange sales. Some 55% of all single-family home sales in February were in the $600,000-to-$899,000 range.

For condos the median sale price rose 3.6% to $430,000 from $415,000 a year earlier. But the number of sales fell to 316, a 1.6% drop in volume from February 2019.

“While COVID-19 presents new concerns and uncertainty in the general economy, the impact on our housing market remains to be seen,” said Tricia Nekota, president of the Honolulu Board of Realtors, in a written statement. “However, we anticipate that homebuyers will continue to drive steady activity as they take advantage of historically low interest rates.”

Mortgage firm Freddie Mac reported Thursday the average 30-year fixed-rate mortgage had moved down to 3.29%, the lowest level in nearly 50 years. That’s down from the 3.5% average fixed-rate mortgage Freddie Mac reported at the beginning of the year and from the 4.5% rate at the beginning of last year.

Freddie Mac also reported that mortgage applications increased 10% from one year ago.

While rates were already coming down for a few months, they’ve gotten lower due to fears surrounding the coronavirus and a possible recession. On Friday, investors exiting stocks sent the 10-year U.S. Treasury rate to a new all-time low. On Tuesday the Federal Reserve trimmed the federal funds rate by 0.50% in an effort to stem the coronavirus-related economic slowdown.

The changes have activated a flurry of refinancing and activated buyers who were sitting on the fence. In Hawaii, where home prices are among the highest in the country, even a drop of half a percent can dramatically increase buying power.

Carl Bonham, executive director of the University of Hawaii Economic Research Organization, said the most recent drop in mortgage rates increased the buying power for an Oahu family making $100,000 in median household income to close to $800,000 with a 20% down payment. That’s up from about $700,000 last year and about $600,000 in 2018 with the same down-payment assumptions, Bonham said.

While the interest rate cuts have supported Oahu real estate, Bonham said it’s still too early to gauge the overall impact given the uncertainty of the coronavirus situation and the economy.

“Homes are becoming quite a bit more affordable, but potentially more people will be losing their jobs,” Bonham said.“It’s a tough call. The impacts depend on how long the spread of the coronavirus goes on. The longer the spread, the more severe it is for the economy. Obviously, there’s a point where if the job losses are bad enough, the low mortgage rates won’t offset it.”

Shannon Severance, RE/MAX Honolulu agent, said business has been a little slower than at this time last year, but the latest interest rate drop is enticing buyers. Military buyers got an added bonus this year when the Department of Veterans Affairs instituted no loan limits for veterans who have full VA loan entitlement to buy properties with zero down payment, Severance said.

“Overall, it’s a healthy market. Homes that are priced right are still moving fast, and there are still bidding wars for the most competitive properties,” Severance said. “Hawaii’s real estate market isn’t hurting. With the interest rate drop, now is a great time for new buyers and investors to take advantage of a more affordable market.”

The interest rate drop inspired Luis Hernandez, a U.S. Coast Guard petty officer third class, to rent out his Mililani home and look for a property closer to town that he can live in for a time and eventually turn into an investment property.

“When I bought my home in Mililani two years ago, the interest rate was 4.2%. Now it’s almost half of that. Knowing how much that impacts the potential payment, it seemed like a no-brainer,” Hernandez said. “I think it’s a perfect time to buy.”