MARKETWATCH
"Mortgage rates fall to lowest level since 2016 — this could be the ‘last affordable’ spring home-buying season for a while, Realtor group warns"
By Jacob Passy
Published: Feb 7, 2020 11:03 a.m. ET
Mortgage rates have dropped to the lowest levels since before the 2016 presidential election.
The 30-year fixed-rate mortgage averaged 3.45% during the week ending Feb. 6, a decrease of six basis points from the previous week, Freddie Mac reported Thursday.
This was the third consecutive week in which mortgage rates dropped.
The last time the 30-year fixed-rate mortgage was at or below this level was in October 2016, when it averaged 3.42%.
The 15-year fixed-rate mortgage also fell three basis points to 2.97%, according to Freddie Mac.
This was the first time since 2016 the average rate for the 15-year fixed home loan fell below 3%.
The 5/1 adjustable-rate mortgage, however, increased eight basis points to an average of 3.32%.
The decline in fixed mortgage rates reflected the movement in the 10-year Treasury yield — mortgage rates roughly track the direction of long-term bond yields.
While equities markets rebounded this week as fears regarding the spread of the coronavirus abated, the 10-year Treasury was more resistant to upward movement.
Toward the latter half of the week, the 10-year yield improved following the release of positive economic data.
“As rates fell for the third consecutive week, markets staged a rebound with increases in manufacturing and service sector activity,” Sam Khater, Freddie Mac chief economist, said in the report.
“The combination of very low mortgage rates, a strong economy and more positive financial market sentiment all point to home purchase demand continuing to rise over the next few months.”
Could this be the last affordable spring home-buying market?
That rising demand is expected to speed the start of the spring home-buying season, which is generally the most popular time of year to purchase a home for most of the country.
But a new report based on research from Realtor.com and the National Association of Realtors indicates that buyers who manage to score a deal this year will be lucky, as experts predict that affordability will only worsen in the years to come.
“The number of metros across the country seeing improvements to home affordability continues to increase,” Sabrina Speianu, senior economist research analyst at Realtor.com and the report’s author, wrote.
“However, this spring homebuying season may be the last to see gains to affordability in quite a while.”
In the fourth quarter of 2019, housing affordability improved across all income levels nationwide, though the biggest gains in affordability were experienced among those in high income brackets.
Out of the 100 largest metropolitan areas nationwide, 87 saw affordability improvements in the fourth quarter.
The rise in affordability was driven largely by low mortgage rates, but other factors also played a role, including growing household incomes, decelerating or falling home listing prices and inventory increases in some markets.
Des Moines, Iowa saw the largest improvement in affordability nationwide, while Tulsa, Okla., experienced the biggest downturn.
Barring future global economic events or changes in Federal Reserve policy, interest rates are expected to stabilize in 2020, the report said.
“With stabilizing interest rates, only income growth or increased construction of affordable homes can provide continued increases to home affordability,” Speianu wrote.
“However, income growth has historically failed to keep up with home price growth and home builders have yet to reach normal levels of building activity despite recent optimism.”
https://www.marketwatch.com/story/mortg ... 2020-02-06
THE HOUSING MARKET
Re: THE HOUSING MARKET
MARKETWATCH
"Home permits soar to highest level in 13 years in January, even as new construction dips slightly"
By Jacob Passy
Published: Feb 19, 2020 10:10 a.m. ET
The numbers:
Builders started construction on new homes in the U.S. at a pace of 1.57 million in January, the Commerce Department said Wednesday.
This represented a 3.6% decrease from a revised 1.63 million in December, but was 21.4% higher than a year ago.
Permitting activity, however, hit yet another post-recession high.
Building permits for privately-owned housing units were authorized at a seasonally-adjusted rate of 1.55 million.
That was 9.2% above the pace of 1.42 million set in December and 17.9% above last year’s rate.
The higher pace of permitting suggests that builders are aiming to ramp up construction activity in the months to come.
Economists polled by MarketWatch had projected housing starts to occur at a 1.44 million pace and building permits to occur at a rate of 1.45 million.
What they’re saying:
“The 12-month trend is at a cycle high and we see it drifting higher this year in response to sturdy job growth and low mortgage rates,” Sal Guatieri, senior economist at BMO Capital Markets, wrote in a research note.
“With the 30-year Treasury rate testing all-time lows, mortgage rates should remain low for some time…barring a material upturn in inflation that seems unlikely.”
What happened:
Permitting activity increased across all types of units, including single-family homes (up 6.4%) and multifamily buildings (up 15.2%).
Building permits rose in every region of the country, with the Northeast seeing the biggest increase at 34.6%, led by single-family activity.
Housing starts decreased for single-family (down 5.9%), but rose for multifamily structures (up 3%).
Regionally though, housing starts varied significantly.
Housing starts skyrocketed in the Northeast, rising nearly 32% month over month, including a 3.1% gain for single-family units.
The West also saw a 1.2% uptick in housing starts.
Meanwhile, housing starts plummeted 26% in the Midwest and 5.4% in the South.
The decline in housing starts on a monthly basis is a reflection of the larger-than-expected surge in construction in December, owing in large part to the warmer weather that month.
The big picture:
Two main factors are driving the high level of home-building activity in recent months.
Low mortgage rates have sparked greater demand among home buyers.
But when home buyers go to the market for a property to purchase, they are being met with a historically low supply of homes for sale.
A slowdown in home building in the wake of the Great Recession meant that the housing market did not keep pace with household formation for quite some time.
As a result, there’s a massive pool of people who want to buy homes with few options to choose from.
As a result, many parts of the country have seen home prices soar to new highs in recent years thanks to the competition among buyers.
That has made home buying unaffordable for many Americans.
This whole situation, however, is a boon to home builders.
Sentiment among home builders has hit record highs given the long runway they have to continue building.
Economists have argued that even in the event of a recession, home builders should be able to continue constructing new units given how much pent-up demand there is in the market.
Market reaction:
Dow Jones Industrial Average, S&P 500 and 10-year Treasury note’s yield were all up in Tuesday morning trading following the release of the housing starts and wholesale price reports.
https://www.marketwatch.com/story/home- ... 2020-02-19
"Home permits soar to highest level in 13 years in January, even as new construction dips slightly"
By Jacob Passy
Published: Feb 19, 2020 10:10 a.m. ET
The numbers:
Builders started construction on new homes in the U.S. at a pace of 1.57 million in January, the Commerce Department said Wednesday.
This represented a 3.6% decrease from a revised 1.63 million in December, but was 21.4% higher than a year ago.
Permitting activity, however, hit yet another post-recession high.
Building permits for privately-owned housing units were authorized at a seasonally-adjusted rate of 1.55 million.
That was 9.2% above the pace of 1.42 million set in December and 17.9% above last year’s rate.
The higher pace of permitting suggests that builders are aiming to ramp up construction activity in the months to come.
Economists polled by MarketWatch had projected housing starts to occur at a 1.44 million pace and building permits to occur at a rate of 1.45 million.
What they’re saying:
“The 12-month trend is at a cycle high and we see it drifting higher this year in response to sturdy job growth and low mortgage rates,” Sal Guatieri, senior economist at BMO Capital Markets, wrote in a research note.
“With the 30-year Treasury rate testing all-time lows, mortgage rates should remain low for some time…barring a material upturn in inflation that seems unlikely.”
What happened:
Permitting activity increased across all types of units, including single-family homes (up 6.4%) and multifamily buildings (up 15.2%).
Building permits rose in every region of the country, with the Northeast seeing the biggest increase at 34.6%, led by single-family activity.
Housing starts decreased for single-family (down 5.9%), but rose for multifamily structures (up 3%).
Regionally though, housing starts varied significantly.
Housing starts skyrocketed in the Northeast, rising nearly 32% month over month, including a 3.1% gain for single-family units.
The West also saw a 1.2% uptick in housing starts.
Meanwhile, housing starts plummeted 26% in the Midwest and 5.4% in the South.
The decline in housing starts on a monthly basis is a reflection of the larger-than-expected surge in construction in December, owing in large part to the warmer weather that month.
The big picture:
Two main factors are driving the high level of home-building activity in recent months.
Low mortgage rates have sparked greater demand among home buyers.
But when home buyers go to the market for a property to purchase, they are being met with a historically low supply of homes for sale.
A slowdown in home building in the wake of the Great Recession meant that the housing market did not keep pace with household formation for quite some time.
As a result, there’s a massive pool of people who want to buy homes with few options to choose from.
As a result, many parts of the country have seen home prices soar to new highs in recent years thanks to the competition among buyers.
That has made home buying unaffordable for many Americans.
This whole situation, however, is a boon to home builders.
Sentiment among home builders has hit record highs given the long runway they have to continue building.
Economists have argued that even in the event of a recession, home builders should be able to continue constructing new units given how much pent-up demand there is in the market.
Market reaction:
Dow Jones Industrial Average, S&P 500 and 10-year Treasury note’s yield were all up in Tuesday morning trading following the release of the housing starts and wholesale price reports.
https://www.marketwatch.com/story/home- ... 2020-02-19
Re: THE HOUSING MARKET
MARKETWATCH
"Existing-home sales dip in January as tight supplies limit opportunities for buyers"
By Jeffry Bartash
Published: Feb 21, 2020 11:10 a.m. ET
The numbers:
Sales of previously-owned homes fell slightly in January, but they still appear to be trending higher overall amid a mini-boom in the real estate business tied to tumbling mortgage rates.
Existing-home sales slipped 1.3% last month to an annual pace of 5.46 million the National Association of Realtors said Friday.
That’s how many homes would be sold if the rate of sales was the same for the entire year.
Yet in a sign of how much stronger demand has gotten, sales of previously owned homes were almost 10% higher compared to the same month last year.
The only reason sales probably aren’t even stronger is a lack of homes for sale.
What happened:
Sales fell more than 9% in the West, accounting for all of the decline last month.
Sales rose slightly in the South and Midwest and were flat in the Northeast.
The median sales price for existing homes in January registered $266,300, up 6.8% from a year earlier.
Although lower mortgage rates have made it somewhat easier to buy, the lack of supply is still pushing prices higher.
The inventory of homes for sale rose a bit to 1.42 million in January, but the supply sits just above the lowest level on record.
There was a 3.1 month supply of homes for sale last month, up a tick from a record low in December.
The general rule of thumb is that a 6-month supply is a sign of a balanced market.
Big picture:
The U.S. housing industry has rebounded from a lull at the end of 2018 owing to a sharp decline in mortgage rates.
A stable economy, low unemployment and rising number of families with children are also helping to juice up demand.
Builders are boosting construction to take advantage of the uptrend, but prices will continue to rise unless the supply of homes increases faster or more owners put their properties up sale, neither of which seems likely.
If so, the level overall level of sales will continue to be constrained.
What they’re saying:
“Tight inventories are still the story for existing home sales."
"Despite pent-up demand and mortgage rates that are near record lows, existing home sales continue to be constrained by a limited supply of homes for sale,” economists Gregory Daco and Nancy Vanden Houten wrote to clients in a note.
Market reaction:
The Dow Jones Industrial Average and S&P 500 fell in Friday trades, reflecting the angst in financial markets over the spread of the COVID-19 illness.
The 10-year Treasury yield dipped below 1.5% for the first time since September.
https://www.marketwatch.com/story/exist ... 2020-02-21
"Existing-home sales dip in January as tight supplies limit opportunities for buyers"
By Jeffry Bartash
Published: Feb 21, 2020 11:10 a.m. ET
The numbers:
Sales of previously-owned homes fell slightly in January, but they still appear to be trending higher overall amid a mini-boom in the real estate business tied to tumbling mortgage rates.
Existing-home sales slipped 1.3% last month to an annual pace of 5.46 million the National Association of Realtors said Friday.
That’s how many homes would be sold if the rate of sales was the same for the entire year.
Yet in a sign of how much stronger demand has gotten, sales of previously owned homes were almost 10% higher compared to the same month last year.
The only reason sales probably aren’t even stronger is a lack of homes for sale.
What happened:
Sales fell more than 9% in the West, accounting for all of the decline last month.
Sales rose slightly in the South and Midwest and were flat in the Northeast.
The median sales price for existing homes in January registered $266,300, up 6.8% from a year earlier.
Although lower mortgage rates have made it somewhat easier to buy, the lack of supply is still pushing prices higher.
The inventory of homes for sale rose a bit to 1.42 million in January, but the supply sits just above the lowest level on record.
There was a 3.1 month supply of homes for sale last month, up a tick from a record low in December.
The general rule of thumb is that a 6-month supply is a sign of a balanced market.
Big picture:
The U.S. housing industry has rebounded from a lull at the end of 2018 owing to a sharp decline in mortgage rates.
A stable economy, low unemployment and rising number of families with children are also helping to juice up demand.
Builders are boosting construction to take advantage of the uptrend, but prices will continue to rise unless the supply of homes increases faster or more owners put their properties up sale, neither of which seems likely.
If so, the level overall level of sales will continue to be constrained.
What they’re saying:
“Tight inventories are still the story for existing home sales."
"Despite pent-up demand and mortgage rates that are near record lows, existing home sales continue to be constrained by a limited supply of homes for sale,” economists Gregory Daco and Nancy Vanden Houten wrote to clients in a note.
Market reaction:
The Dow Jones Industrial Average and S&P 500 fell in Friday trades, reflecting the angst in financial markets over the spread of the COVID-19 illness.
The 10-year Treasury yield dipped below 1.5% for the first time since September.
https://www.marketwatch.com/story/exist ... 2020-02-21
Re: THE HOUSING MARKET
MARKETWATCH
"New home sales soar to highest level since 2007"
By Jacob Passy
Published: Feb 26, 2020 10:47 a.m. ET
The numbers:
Sales of newly-constructed homes in the U.S. soared 7.9% on a monthly basis in January to a seasonally-adjusted annual rate of 764,000, the government reported Wednesday.
That figure represents the highest pace of new home sales since July 2007, making for a new cycle high for the housing market.
On an annual basis, new home sales were up 18.6% compared with January 2019.
Additionally, the government adjusted its figures for previous months.
The December rate of new home sales was revised upward to 708,000, while the rate for November was readjusted lower to 692,000.
The new home sales report, because of its small sample size, is prone to significant revisions like these.
What happened?:
On a monthly basis, sales increased the most in the Midwest, where they rose 30.3%, followed by the West (up 23.5%).
In the Northeast, new home sales increased a more modest 4.8% between December and January, and they dropped 4.4% over that same time frame in the South.
Sales increase on a year-over-year basis by more than 40% for every region except the South, where they fell 2.4%.
The median sales price of new homes sold in January was $348,200.
The inventory of new homes for sale dropped to 324,000, representing a 5.1 months’ supply.
That is the lowest supply of new homes on the market since 2017.
The big picture:
Confidence among home builders has remained at record highs in recent months, and this report show why.
The number of previously-owned homes for sale is at record lows currently.
Meanwhile, a strong job market, wage growth and near-record-low interest rates have provided a major boost in demand for homes.
With homeownership an affordable prospect for more Americans, they have to turn somewhere to purchase.
This has made the new home market more attractive, even though new homes typically cost more for buyers.
As a result, home construction activity should remain healthy for some time to come, barring complications caused by the coronavirus-fueled economic slowdown.
What they’re saying:
“Demand conditions in January continued to be favorable for new home sales,” Nationwide senior economist Ben Ayers and economist Daniel Vielhaber wrote in a research note Monday.
“Unemployment and mortgage rates continue to be very low, household formations continue to run hot, while the inventory of existing houses on the market is extremely limited, pushing more homebuyers into the market for new homes.”
Market reaction:
The Dow Jones Industrial Average and the S&P 500 both rebounded in Wednesday morning trading, after falling for four sessions on concerns related to the ongoing coronavirus outbreak.
The yield on the 10-year Treasury note also increased.
However, shares of home-building firms PulteGroup and D.R. Horton and Lennar Corp. all fell Wednesday morning.
https://www.marketwatch.com/story/new-h ... 2020-02-26
"New home sales soar to highest level since 2007"
By Jacob Passy
Published: Feb 26, 2020 10:47 a.m. ET
The numbers:
Sales of newly-constructed homes in the U.S. soared 7.9% on a monthly basis in January to a seasonally-adjusted annual rate of 764,000, the government reported Wednesday.
That figure represents the highest pace of new home sales since July 2007, making for a new cycle high for the housing market.
On an annual basis, new home sales were up 18.6% compared with January 2019.
Additionally, the government adjusted its figures for previous months.
The December rate of new home sales was revised upward to 708,000, while the rate for November was readjusted lower to 692,000.
The new home sales report, because of its small sample size, is prone to significant revisions like these.
What happened?:
On a monthly basis, sales increased the most in the Midwest, where they rose 30.3%, followed by the West (up 23.5%).
In the Northeast, new home sales increased a more modest 4.8% between December and January, and they dropped 4.4% over that same time frame in the South.
Sales increase on a year-over-year basis by more than 40% for every region except the South, where they fell 2.4%.
The median sales price of new homes sold in January was $348,200.
The inventory of new homes for sale dropped to 324,000, representing a 5.1 months’ supply.
That is the lowest supply of new homes on the market since 2017.
The big picture:
Confidence among home builders has remained at record highs in recent months, and this report show why.
The number of previously-owned homes for sale is at record lows currently.
Meanwhile, a strong job market, wage growth and near-record-low interest rates have provided a major boost in demand for homes.
With homeownership an affordable prospect for more Americans, they have to turn somewhere to purchase.
This has made the new home market more attractive, even though new homes typically cost more for buyers.
As a result, home construction activity should remain healthy for some time to come, barring complications caused by the coronavirus-fueled economic slowdown.
What they’re saying:
“Demand conditions in January continued to be favorable for new home sales,” Nationwide senior economist Ben Ayers and economist Daniel Vielhaber wrote in a research note Monday.
“Unemployment and mortgage rates continue to be very low, household formations continue to run hot, while the inventory of existing houses on the market is extremely limited, pushing more homebuyers into the market for new homes.”
Market reaction:
The Dow Jones Industrial Average and the S&P 500 both rebounded in Wednesday morning trading, after falling for four sessions on concerns related to the ongoing coronavirus outbreak.
The yield on the 10-year Treasury note also increased.
However, shares of home-building firms PulteGroup and D.R. Horton and Lennar Corp. all fell Wednesday morning.
https://www.marketwatch.com/story/new-h ... 2020-02-26
Re: THE HOUSING MARKET
MARKETWATCH
"Mortgage rates surge to highest level since January even though the Fed just brought interest rates to 0% — here’s why"
By Jacob Passy
Published: March 20, 2020 at 7:59 a.m. ET
Interest rates on home loans shot up higher over the past week as demand for refinances remained strong despite major fluctuations in stock and bond markets.
The 30-year fixed-rate mortgage averaged 3.65% during the week ending March 19, an increase of 29 basis points from the previous week, Freddie Mac reported Thursday.
This was the largest weekly increase in the average 30-year mortgage rate since November 2016, and it’s the highest mortgage rates have been since mid-January.
The noted uptick in 30-year fixed-rate mortgage rates is a major reversal from just two weeks ago, when they had hit a record low at an average of 3.29%.
The 15-year fixed-rate mortgage also jumped 29 basis points to 3.06%, according to Freddie Mac.
The 5/1 adjustable-rate mortgage rose by 10 basis points to an average of 3.11%.
While the Federal Reserve had announced that it was cutting its benchmark interest rate to a range of 0.25% to 0%, mortgage rates do not generally track the Fed’s movements directly.
Instead, they roughly follow the direction of longer-term bond yields, including the 10-year Treasury note.
The 10-year Treasury yield rose above 1% this week for the first time in roughly two weeks.
The increase came about largely as a result of Congress’ approval of a major spending package aimed at curbing the economic impact of the coronavirus pandemic in the U.S., as well as discussions of a broader, more expensive stimulus package.
“The plan will require a large amount of government debt to be issued, in the form of U.S. Treasuries,” said Zillow economist Matthew Speakman.
“Knowing that more bonds will be in the market soon, current Treasuries suddenly warranted lower prices in recent days, which coincide with higher yields.”
Bond yields also responded to the Fed’s actions this week, including its choice to re-engage in bond purchasing activity in order to stimulate financial markets.
Meanwhile, lenders continued to have their own issues to grapple with when it came to pricing mortgage rates this week.
“Mortgage rates rose again this week as lenders increased prices to help manage skyrocketing refinance demand,” said Sam Khater, Freddie Mac’s chief economist, in the report.
Those aiming to get a new mortgage — either to refinance their existing home loan or to purchase a mortgage — shouldn’t worry too much about interest rates staying this elevated.
Economists have said lenders will likely bring rates back down to an extent once they’ve worked through their backlog of applications.
And with the coronavirus outbreak still playing out, market volatility is likely here to stay for some time.
“With so much still uncertain, and market movements remaining unpredictable, it’s a losing game to try and predict where rates are heading next,” Speakman said.
“But it’s safe to say that more dramatic movements are likely on the horizon.”
https://www.marketwatch.com/story/mortg ... cle_inline
"Mortgage rates surge to highest level since January even though the Fed just brought interest rates to 0% — here’s why"
By Jacob Passy
Published: March 20, 2020 at 7:59 a.m. ET
Interest rates on home loans shot up higher over the past week as demand for refinances remained strong despite major fluctuations in stock and bond markets.
The 30-year fixed-rate mortgage averaged 3.65% during the week ending March 19, an increase of 29 basis points from the previous week, Freddie Mac reported Thursday.
This was the largest weekly increase in the average 30-year mortgage rate since November 2016, and it’s the highest mortgage rates have been since mid-January.
The noted uptick in 30-year fixed-rate mortgage rates is a major reversal from just two weeks ago, when they had hit a record low at an average of 3.29%.
The 15-year fixed-rate mortgage also jumped 29 basis points to 3.06%, according to Freddie Mac.
The 5/1 adjustable-rate mortgage rose by 10 basis points to an average of 3.11%.
While the Federal Reserve had announced that it was cutting its benchmark interest rate to a range of 0.25% to 0%, mortgage rates do not generally track the Fed’s movements directly.
Instead, they roughly follow the direction of longer-term bond yields, including the 10-year Treasury note.
The 10-year Treasury yield rose above 1% this week for the first time in roughly two weeks.
The increase came about largely as a result of Congress’ approval of a major spending package aimed at curbing the economic impact of the coronavirus pandemic in the U.S., as well as discussions of a broader, more expensive stimulus package.
“The plan will require a large amount of government debt to be issued, in the form of U.S. Treasuries,” said Zillow economist Matthew Speakman.
“Knowing that more bonds will be in the market soon, current Treasuries suddenly warranted lower prices in recent days, which coincide with higher yields.”
Bond yields also responded to the Fed’s actions this week, including its choice to re-engage in bond purchasing activity in order to stimulate financial markets.
Meanwhile, lenders continued to have their own issues to grapple with when it came to pricing mortgage rates this week.
“Mortgage rates rose again this week as lenders increased prices to help manage skyrocketing refinance demand,” said Sam Khater, Freddie Mac’s chief economist, in the report.
Those aiming to get a new mortgage — either to refinance their existing home loan or to purchase a mortgage — shouldn’t worry too much about interest rates staying this elevated.
Economists have said lenders will likely bring rates back down to an extent once they’ve worked through their backlog of applications.
And with the coronavirus outbreak still playing out, market volatility is likely here to stay for some time.
“With so much still uncertain, and market movements remaining unpredictable, it’s a losing game to try and predict where rates are heading next,” Speakman said.
“But it’s safe to say that more dramatic movements are likely on the horizon.”
https://www.marketwatch.com/story/mortg ... cle_inline
Re: THE HOUSING MARKET
MARKETWATCH
"Pending home sales rise 2.4% in February — but the coronavirus outbreak will slow real-estate activity for months to come"
By Jacob Passy
Published: March 30, 2020 at 11:45 a.m. ET
The numbers:
The index of pending home sales increased 2.4% in February following the previous month’s rebound, the National Association of Realtors reported Monday.
The index measures real-estate transactions where a contract was signed but the sale had not yet closed, benchmarked to contract-signing activity in 2001.
It serves as an indicator for existing-home sales reports in the coming months.
What happened:
Compared with February 2019, signings were up 9.4% nationally.
On a monthly basis, pending sales were up in every region with the West seeing the largest gain at 4.6%, followed by the Midwest (4.5%) and the Northeast (2.8%).
In the South, contract signings inched up just 0.1%.
The big picture:
Before the coronavirus outbreak hit the U.S., the residential real-estate market was in a decent position.
While the short supply of homes for sale had put a ceiling on the number of sales that could happen in any given month, there was an excess amount of demand in the market.
In particular, the low interest rate environment that had prevailed since last summer was keeping sales volumes elevated, as it helped make buying a home more affordable.
The question now for the market is how much the COVID-19 pandemic will hurt the country’s economy and real-estate market.
Studies based on previous widespread illness outbreaks have shown that the real-estate industry has historically rebounded fairly well in areas that were hard hit.
Much will depend on how quickly those who lost their jobs or income as a result of the coronavirus pandemic can recover.
What they’re saying:
“Housing, just like most other industries, suffered from the coronavirus crisis, but once this predicament is behind us and the habit of social distancing is respected, I’m encouraged there will be continued home transactions though, with more virtual tours, electronic signatures, and external home appraisals."
"Many of the home sales that are likely to be missed during the first part of 2020 may simply be pushed into late summer and autumn parts of the year,” said Lawrence Yun, chief economist for the National Association of Realtors.
Market reaction:
The Dow Jones Industrial Average and the S&P 500 were both up in Monday morning trading as investors were upbeat on efforts to contain the coronavirus.
The yield on the 10-year Treasury note was down slightly.
https://www.marketwatch.com/story/pendi ... cle_inline
"Pending home sales rise 2.4% in February — but the coronavirus outbreak will slow real-estate activity for months to come"
By Jacob Passy
Published: March 30, 2020 at 11:45 a.m. ET
The numbers:
The index of pending home sales increased 2.4% in February following the previous month’s rebound, the National Association of Realtors reported Monday.
The index measures real-estate transactions where a contract was signed but the sale had not yet closed, benchmarked to contract-signing activity in 2001.
It serves as an indicator for existing-home sales reports in the coming months.
What happened:
Compared with February 2019, signings were up 9.4% nationally.
On a monthly basis, pending sales were up in every region with the West seeing the largest gain at 4.6%, followed by the Midwest (4.5%) and the Northeast (2.8%).
In the South, contract signings inched up just 0.1%.
The big picture:
Before the coronavirus outbreak hit the U.S., the residential real-estate market was in a decent position.
While the short supply of homes for sale had put a ceiling on the number of sales that could happen in any given month, there was an excess amount of demand in the market.
In particular, the low interest rate environment that had prevailed since last summer was keeping sales volumes elevated, as it helped make buying a home more affordable.
The question now for the market is how much the COVID-19 pandemic will hurt the country’s economy and real-estate market.
Studies based on previous widespread illness outbreaks have shown that the real-estate industry has historically rebounded fairly well in areas that were hard hit.
Much will depend on how quickly those who lost their jobs or income as a result of the coronavirus pandemic can recover.
What they’re saying:
“Housing, just like most other industries, suffered from the coronavirus crisis, but once this predicament is behind us and the habit of social distancing is respected, I’m encouraged there will be continued home transactions though, with more virtual tours, electronic signatures, and external home appraisals."
"Many of the home sales that are likely to be missed during the first part of 2020 may simply be pushed into late summer and autumn parts of the year,” said Lawrence Yun, chief economist for the National Association of Realtors.
Market reaction:
The Dow Jones Industrial Average and the S&P 500 were both up in Monday morning trading as investors were upbeat on efforts to contain the coronavirus.
The yield on the 10-year Treasury note was down slightly.
https://www.marketwatch.com/story/pendi ... cle_inline
Re: THE HOUSING MARKET
MARKETWATCH
"Opinion: This hard truth about the mortgage markets isn’t being told"
By Keith Jurow
Published: April 2, 2020 at 3:35 p.m. ET
Everyone wants to know what impact the coronavirus and the government response to it will have on housing markets.
While it is too early to hazard a guess, some things are becoming increasingly clear.
Already, it looks as if the U.S. is moving towards a temporary moratorium on mortgage payments.
Fannie Mae and Freddie Mac unveiled an emergency program which provides a two-month deferral of mortgage payments for any homeowner who claims to be facing a hardship because of the virus.
The payments will be tacked on at the end of the mortgage term.
The coronavirus rescue law just enacted by Congress includes a provision which requires all firms that service federally-backed mortgages to grant a forbearance of up to 360 days for any borrowers who say they have been harmed by the coronavirus outbreak.
It is not much of a stretch to say that this virus has changed everything.
Many of you may sense that the virus has undermined what you thought was still a fairly strong housing market around the country.
In truth, the so-called housing recovery since 2010 has been little more than a carefully constructed illusion.
The belief in a strong housing recovery was carefully devised using a strategy of misleading information, withheld data and false impressions.
As I have explained in recent columns, the strategy to turn around collapsing housing markets unfolded in three parts: (1) restrict the number of foreclosed properties placed on the market; (2) radically reduce the number of seriously delinquent homes actually foreclosed and repossessed, and (3) provide millions of delinquent homeowners a mortgage modification as an alternative to foreclosure.
This strategy fooled nearly everyone into believing that the disaster has been overcome.
The best example is Los Angeles County — ground zero for the collapse.
In 2008, more than 37,000 properties were foreclosed.
The plunge in foreclosures didn't really kick in until 2012 when the number dropped to slightly over 10,000.
The next year, foreclosures plunged to 3,340.
Don't think for a minute that this was due to an improving economy.
Not at all.
It was simply the strategy of desperate servicers.
With so few properties foreclosed and even fewer placed on the market, home prices had no where to go but up.
For years now, data providers, mortgage servicers and lenders have done their best to hide the real mortgage situation from the public.
The largest data providers have never explained why the number of mortgages in their databases has shrunk so dramatically.
For example, the largest banks serviced nearly 2/3 of all first liens in 2011 and their data was reported quarterly to their regulator — the Office of the Controller of the Currency (OCC).
By 2019, that had plunged to less than 1/3.
What had happened?
The housing crash had left them with millions of seriously delinquent first liens to deal with.
This was new territory for them and they were operationally not up to the task.
As the cost of servicing delinquent mortgages soared, most of the largest banks decided to sharply cut back their servicing business.
So they sold most underwater loans in their portfolios as well as the mortgage servicing rights (MSRs).
The 2019 FDIC Quarterly reported that the large servicing banks sold off $500 billion in mortgage servicing rights to non-bank servicers in 2013 alone.
This sale of MSRs has continued right through 2019 when $635 billion changed hands.
Who bought these loans and the servicing rights remains largely a mystery.
The consequences were far reaching.
Whereas the large bank servicers had reported detailed data to the agency which regulated national banks — the OCC — the new non-bank servicers didn't really report to anyone.
This has left an enormous hole in the reported mortgage data.
In its June 2014 Mortgage Monitor, data provider Black Knight Financial Services reported that its coverage of non-agency securitized loans was slightly more than half of that universe.
Hence, it extrapolated in order to estimate the entire non-agency market.
In spite of having substantially fewer mortgages in its database obtained from the major bank servicers, Black Knight has never clarified or admitted how much its own mortgage database plunged since then.
Another example of this coverage shrinkage is what had happened to HOPE NOW's report on mortgage modifications.
In 2013, the HOPE NOW consortium included 18 major firms that serviced more than 30 million loans.
By the third quarter of 2019, it had dwindled to only 12 firms which serviced a mere 18 million loans.
Because of this, HOPE NOW's extrapolated modification numbers have become little more than a guess.
Shocking re-default statistics
Last October, MarketWatch published my column about the danger of mortgage modifications that re-defaulted.
It did not include the data below, which shows truly scary re-default figures for non-agency RMBS loans.
This graph was compiled by Amherst Securities Group — one of the best data providers at the time.
It shows re-default rates as of July 2012 broken down by the year of modification.
How many modifications were provided in just 2008-2010?
HOPE NOW estimated that slightly under 4 million permanent modifications were completed in those three years alone.
For 2008 and 2009, Amherst's graph showed re-defaults ranging from 75-90%.
For the peak year of modifications — 2010 — it reported rates of 50-60%.
Re-default rates for 2011 modifications were heading toward 40% over a period of less than two years.
These extremely high re-default rates were not reported by any other data provider.
Amherst's re-default figures do not include failed forbearances.
Forbearances are arrangements whereby the lender agrees to temporarily defer mortgage payments while the borrower deals with an allegedly temporary financial problem.
The suspended payments are usually pushed down the road and not canceled.
At the end of the forbearance period, a repayment plan often begins with a higher monthly payment.
HOPE NOW estimated that during the 2008-10 period, 3.4 million repayment plans had been initiated.
A more recent study on modification re-defaults was published in 2015 by two researchers at the Federal Reserve Board.
Although they used a relatively small sample of roughly 50,000 first liens, the study showed re-default statistics in line with the earlier report by Amherst.
The graph above shows the percentage of loans modified between 2008 and 2013 which were current and still being paid at the end of 2014.
Those modified the earliest — between 2008 and 2010 — were current at rates of only 10% to 40%.
This means they had re-defaulted at rates between 60% and nearly 90%.
According to Attom Data’s important quarterly report on the average gross profit for home sellers, 2013 was the first year when sellers in many major metros began to see a profit on the sale of their house.
It was no accident that the greatest gains in gross profit occurred in California metros where mortgage servicers had brought foreclosures almost to a complete halt.
2013 was also the year when the picture began to go dark on the non-agency securitized mortgage market.
The very important quarterly report on non-agency mortgages put out by the American Securitization Forum ceased publication that year.
The last comprehensive database which was a reliable source for the non-agency mortgage market was that of BlackBox Logic.
Its entire database and analytic software was sold to Moody's in 2016.
I have not found any Moody's report which made use of this important database.
CoreLogic claims to have the largest non-agency securitized mortgage database of anyone.
However, I have never seen any of their monthly foreclosure reports which made a connection between the rise in home prices and the orchestrated plunge in foreclosures.
What can we infer from all this?
First, the true condition of mortgage markets around the country is murkier than ever.
Second, a full picture of mortgage modification re-defaults would offer us a much clearer understanding of how bad the delinquency situation really is.
Third, data providers show no interest in giving us a more complete view, and finally, don't count on any help from the mortgage servicers.
Keith Jurow is a real estate analyst who covers the bubble-era home-lending debacle and its aftermath.Contact him at www.keithjurow.com.
https://www.marketwatch.com/story/heres ... latestnews
"Opinion: This hard truth about the mortgage markets isn’t being told"
By Keith Jurow
Published: April 2, 2020 at 3:35 p.m. ET
Everyone wants to know what impact the coronavirus and the government response to it will have on housing markets.
While it is too early to hazard a guess, some things are becoming increasingly clear.
Already, it looks as if the U.S. is moving towards a temporary moratorium on mortgage payments.
Fannie Mae and Freddie Mac unveiled an emergency program which provides a two-month deferral of mortgage payments for any homeowner who claims to be facing a hardship because of the virus.
The payments will be tacked on at the end of the mortgage term.
The coronavirus rescue law just enacted by Congress includes a provision which requires all firms that service federally-backed mortgages to grant a forbearance of up to 360 days for any borrowers who say they have been harmed by the coronavirus outbreak.
It is not much of a stretch to say that this virus has changed everything.
Many of you may sense that the virus has undermined what you thought was still a fairly strong housing market around the country.
In truth, the so-called housing recovery since 2010 has been little more than a carefully constructed illusion.
The belief in a strong housing recovery was carefully devised using a strategy of misleading information, withheld data and false impressions.
As I have explained in recent columns, the strategy to turn around collapsing housing markets unfolded in three parts: (1) restrict the number of foreclosed properties placed on the market; (2) radically reduce the number of seriously delinquent homes actually foreclosed and repossessed, and (3) provide millions of delinquent homeowners a mortgage modification as an alternative to foreclosure.
This strategy fooled nearly everyone into believing that the disaster has been overcome.
The best example is Los Angeles County — ground zero for the collapse.
In 2008, more than 37,000 properties were foreclosed.
The plunge in foreclosures didn't really kick in until 2012 when the number dropped to slightly over 10,000.
The next year, foreclosures plunged to 3,340.
Don't think for a minute that this was due to an improving economy.
Not at all.
It was simply the strategy of desperate servicers.
With so few properties foreclosed and even fewer placed on the market, home prices had no where to go but up.
For years now, data providers, mortgage servicers and lenders have done their best to hide the real mortgage situation from the public.
The largest data providers have never explained why the number of mortgages in their databases has shrunk so dramatically.
For example, the largest banks serviced nearly 2/3 of all first liens in 2011 and their data was reported quarterly to their regulator — the Office of the Controller of the Currency (OCC).
By 2019, that had plunged to less than 1/3.
What had happened?
The housing crash had left them with millions of seriously delinquent first liens to deal with.
This was new territory for them and they were operationally not up to the task.
As the cost of servicing delinquent mortgages soared, most of the largest banks decided to sharply cut back their servicing business.
So they sold most underwater loans in their portfolios as well as the mortgage servicing rights (MSRs).
The 2019 FDIC Quarterly reported that the large servicing banks sold off $500 billion in mortgage servicing rights to non-bank servicers in 2013 alone.
This sale of MSRs has continued right through 2019 when $635 billion changed hands.
Who bought these loans and the servicing rights remains largely a mystery.
The consequences were far reaching.
Whereas the large bank servicers had reported detailed data to the agency which regulated national banks — the OCC — the new non-bank servicers didn't really report to anyone.
This has left an enormous hole in the reported mortgage data.
In its June 2014 Mortgage Monitor, data provider Black Knight Financial Services reported that its coverage of non-agency securitized loans was slightly more than half of that universe.
Hence, it extrapolated in order to estimate the entire non-agency market.
In spite of having substantially fewer mortgages in its database obtained from the major bank servicers, Black Knight has never clarified or admitted how much its own mortgage database plunged since then.
Another example of this coverage shrinkage is what had happened to HOPE NOW's report on mortgage modifications.
In 2013, the HOPE NOW consortium included 18 major firms that serviced more than 30 million loans.
By the third quarter of 2019, it had dwindled to only 12 firms which serviced a mere 18 million loans.
Because of this, HOPE NOW's extrapolated modification numbers have become little more than a guess.
Shocking re-default statistics
Last October, MarketWatch published my column about the danger of mortgage modifications that re-defaulted.
It did not include the data below, which shows truly scary re-default figures for non-agency RMBS loans.
This graph was compiled by Amherst Securities Group — one of the best data providers at the time.
It shows re-default rates as of July 2012 broken down by the year of modification.
How many modifications were provided in just 2008-2010?
HOPE NOW estimated that slightly under 4 million permanent modifications were completed in those three years alone.
For 2008 and 2009, Amherst's graph showed re-defaults ranging from 75-90%.
For the peak year of modifications — 2010 — it reported rates of 50-60%.
Re-default rates for 2011 modifications were heading toward 40% over a period of less than two years.
These extremely high re-default rates were not reported by any other data provider.
Amherst's re-default figures do not include failed forbearances.
Forbearances are arrangements whereby the lender agrees to temporarily defer mortgage payments while the borrower deals with an allegedly temporary financial problem.
The suspended payments are usually pushed down the road and not canceled.
At the end of the forbearance period, a repayment plan often begins with a higher monthly payment.
HOPE NOW estimated that during the 2008-10 period, 3.4 million repayment plans had been initiated.
A more recent study on modification re-defaults was published in 2015 by two researchers at the Federal Reserve Board.
Although they used a relatively small sample of roughly 50,000 first liens, the study showed re-default statistics in line with the earlier report by Amherst.
The graph above shows the percentage of loans modified between 2008 and 2013 which were current and still being paid at the end of 2014.
Those modified the earliest — between 2008 and 2010 — were current at rates of only 10% to 40%.
This means they had re-defaulted at rates between 60% and nearly 90%.
According to Attom Data’s important quarterly report on the average gross profit for home sellers, 2013 was the first year when sellers in many major metros began to see a profit on the sale of their house.
It was no accident that the greatest gains in gross profit occurred in California metros where mortgage servicers had brought foreclosures almost to a complete halt.
2013 was also the year when the picture began to go dark on the non-agency securitized mortgage market.
The very important quarterly report on non-agency mortgages put out by the American Securitization Forum ceased publication that year.
The last comprehensive database which was a reliable source for the non-agency mortgage market was that of BlackBox Logic.
Its entire database and analytic software was sold to Moody's in 2016.
I have not found any Moody's report which made use of this important database.
CoreLogic claims to have the largest non-agency securitized mortgage database of anyone.
However, I have never seen any of their monthly foreclosure reports which made a connection between the rise in home prices and the orchestrated plunge in foreclosures.
What can we infer from all this?
First, the true condition of mortgage markets around the country is murkier than ever.
Second, a full picture of mortgage modification re-defaults would offer us a much clearer understanding of how bad the delinquency situation really is.
Third, data providers show no interest in giving us a more complete view, and finally, don't count on any help from the mortgage servicers.
Keith Jurow is a real estate analyst who covers the bubble-era home-lending debacle and its aftermath.Contact him at www.keithjurow.com.
https://www.marketwatch.com/story/heres ... latestnews
Re: THE HOUSING MARKET
MARKETWATCH
"Mortgage rates are near record lows, but home buyers may face an uphill battle in securing them"
By Jacob Passy
Published: April 9, 2020 at 11:24 a.m. ET
Mortgage rates largely remained unchanged over the past week, but their ups and downs since the beginning of the year have created challenges for those looking to get a loan to buy a home.
The 30-year fixed-rate mortgage remained flat at an average of 3.33% during the week ending April 9, Freddie Mac reported Thursday.
A year ago, the 30-year fixed-rate mortgage averaged 4.12%.
The 5-year Treasury-indexed hybrid adjustable rate mortgage also stayed the same over this last week, averaging 3.4%.
The 15-year fixed rate mortgage, meanwhile, fell five basis points to an average of 2.77%.
Freddie Mac’s report is based on a survey of lenders, including a mix of thrifts, credit unions, commercial banks and mortgage lending companies.
The number of each type of lender surveyed is roughly proportional to the share of the mortgage industry they represent.
Additionally, the survey results each week are weighted based on the most recent data regarding the dollar volume of conventional loans, meaning loans eligible for purchase by Freddie Mac or Fannie Mae.
The survey therefore does not reflect movements in rates for loans backed by other agencies, such as the Federal Housing Administration or the Department of Veterans Affairs.
It also doesn’t include rates for jumbo loans.
Therefore, the averages Freddie Mac publishes may not fully align with what a home buyer sees on the ground if that buyer is getting one of these other types of mortages.
“The type of loan you’re getting is going to lead to different rates,” Danielle Hale, chief economist for Realtor.com, told MarketWatch.
But other factors are also influencing loan pricing at the ground level.
“There’s a lot of volatility in markets in general,” Hale said.
“People see that in the stock market, which swings up and down depending on the time of day, and that’s also true in the mortgage market.”
Mortgage-backed securities have been volatile in particular, and the yields on these help to drive the rates lenders set for the loans they offer.
Lenders are also facing major workflow issues that could impact the pricing and availability of loans.
On the origination side of the mortgage business, record-low interest rates have meant that lenders have had to grapple with a massive demand for refinancing at a time when they must also adapt to performing their work remotely.
Meanwhile, on the loan servicing front, mortgage companies are dealing with a huge influx of requests from borrowers seeking forbearance, or a temporary halt on making payments.
The most $2.2 trillion stimulus bill guaranteed that any homeowner with a federally-backed mortgage could delay payments on their loan by up to a year.
Mortgage servicers are facing a major cash crunch as a result, Hale said, because they must continue to make payments each month to the investors who own those loans.
“The threat of missed payments also introduces the potential for greater risk for lenders, resulting in tighter lending restrictions and a less-active market for non-agency and less conventional loans,” Zillow economist Matthew Speakman wrote in a research note Wednesday.
“Taken together, even though average rates have appeared to stabilize, volatility remains throughout much of the market.”
For those who are still in the market to buy a home right now and looking for mortgage financing, securing the lowest rate possible has become more challenging as a result.
Americans in that position definitely should compare rates given how much they can differ from lender to lender.
But time is of the essence, because a given lender could move their rates higher or lower, even within a given day.
“I would recommend trying to compare rates in as short a period of time as possible,” Hale said.
“So that you’re really comparing apples to apples.”
Looking ahead to the future, there is still the possibility that rates could fall even lower.
Historically, mortgage rates have roughly tracked the direction of the yield on the 10-year Treasury note.
As the coronavirus outbreak worsened, the 10-year yield dropped below 1%, and it has remained below that level since mid-March.
Mortgage rates haven’t followed the 10-year note’s yield as closely because of the upheaval the industry has seen in recent weeks.
Should things stabilize within the mortgage industry though, mortgage rates are poised to move lower.
“There is room for rates to move down,” Sam Khater, Freddie Mac’s Chief Economist, said in the weekly rates report.
“As financial markets continue to heal, we expect mortgage rates will drift lower in the second half of 2020.”
https://www.marketwatch.com/story/mortg ... =home-page
"Mortgage rates are near record lows, but home buyers may face an uphill battle in securing them"
By Jacob Passy
Published: April 9, 2020 at 11:24 a.m. ET
Mortgage rates largely remained unchanged over the past week, but their ups and downs since the beginning of the year have created challenges for those looking to get a loan to buy a home.
The 30-year fixed-rate mortgage remained flat at an average of 3.33% during the week ending April 9, Freddie Mac reported Thursday.
A year ago, the 30-year fixed-rate mortgage averaged 4.12%.
The 5-year Treasury-indexed hybrid adjustable rate mortgage also stayed the same over this last week, averaging 3.4%.
The 15-year fixed rate mortgage, meanwhile, fell five basis points to an average of 2.77%.
Freddie Mac’s report is based on a survey of lenders, including a mix of thrifts, credit unions, commercial banks and mortgage lending companies.
The number of each type of lender surveyed is roughly proportional to the share of the mortgage industry they represent.
Additionally, the survey results each week are weighted based on the most recent data regarding the dollar volume of conventional loans, meaning loans eligible for purchase by Freddie Mac or Fannie Mae.
The survey therefore does not reflect movements in rates for loans backed by other agencies, such as the Federal Housing Administration or the Department of Veterans Affairs.
It also doesn’t include rates for jumbo loans.
Therefore, the averages Freddie Mac publishes may not fully align with what a home buyer sees on the ground if that buyer is getting one of these other types of mortages.
“The type of loan you’re getting is going to lead to different rates,” Danielle Hale, chief economist for Realtor.com, told MarketWatch.
But other factors are also influencing loan pricing at the ground level.
“There’s a lot of volatility in markets in general,” Hale said.
“People see that in the stock market, which swings up and down depending on the time of day, and that’s also true in the mortgage market.”
Mortgage-backed securities have been volatile in particular, and the yields on these help to drive the rates lenders set for the loans they offer.
Lenders are also facing major workflow issues that could impact the pricing and availability of loans.
On the origination side of the mortgage business, record-low interest rates have meant that lenders have had to grapple with a massive demand for refinancing at a time when they must also adapt to performing their work remotely.
Meanwhile, on the loan servicing front, mortgage companies are dealing with a huge influx of requests from borrowers seeking forbearance, or a temporary halt on making payments.
The most $2.2 trillion stimulus bill guaranteed that any homeowner with a federally-backed mortgage could delay payments on their loan by up to a year.
Mortgage servicers are facing a major cash crunch as a result, Hale said, because they must continue to make payments each month to the investors who own those loans.
“The threat of missed payments also introduces the potential for greater risk for lenders, resulting in tighter lending restrictions and a less-active market for non-agency and less conventional loans,” Zillow economist Matthew Speakman wrote in a research note Wednesday.
“Taken together, even though average rates have appeared to stabilize, volatility remains throughout much of the market.”
For those who are still in the market to buy a home right now and looking for mortgage financing, securing the lowest rate possible has become more challenging as a result.
Americans in that position definitely should compare rates given how much they can differ from lender to lender.
But time is of the essence, because a given lender could move their rates higher or lower, even within a given day.
“I would recommend trying to compare rates in as short a period of time as possible,” Hale said.
“So that you’re really comparing apples to apples.”
Looking ahead to the future, there is still the possibility that rates could fall even lower.
Historically, mortgage rates have roughly tracked the direction of the yield on the 10-year Treasury note.
As the coronavirus outbreak worsened, the 10-year yield dropped below 1%, and it has remained below that level since mid-March.
Mortgage rates haven’t followed the 10-year note’s yield as closely because of the upheaval the industry has seen in recent weeks.
Should things stabilize within the mortgage industry though, mortgage rates are poised to move lower.
“There is room for rates to move down,” Sam Khater, Freddie Mac’s Chief Economist, said in the weekly rates report.
“As financial markets continue to heal, we expect mortgage rates will drift lower in the second half of 2020.”
https://www.marketwatch.com/story/mortg ... =home-page
Re: THE HOUSING MARKET
MARKETWATCH
"America’s housing market is showing the first signs of trouble from the coronavirus pandemic"
By Jacob Passy
Published: April 6, 2020 at 3:11 p.m. ET
March started out as a strong month for the U.S. housing market — but by the second half of the month, the first indications that the coronavirus pandemic would weigh on home-selling activity began to emerge, according to a new report from Realtor.com.
In the weeks ending March 21 and March 28, the number of newly-listed properties fell by 13.1% and 34% respectively when compared with the same period a year ago, Realtor.com found.
This is an indication that home sellers may be holding off on listing their properties right now.
The pace of home-price growth also slowed notably in the latter half of the month, according to the report.
Home list prices were only up 3.3% year-over-year for the week ending March 21, and 2.5% for the following week.
This represented the slowest pace of listing price growth since Realtor.com started tracking this data in 2013.
“Our inventory and listing data can provide some early insight into how housing markets may be impacted by COVID-19, but the situation and reactions to it are still rapidly evolving,” Realtor.com chief economist Danielle Hale wrote in the report.
“The U.S. housing market had a good start to the year."
"Despite still-limited homes for sale, buyers were buying and builders were building,” she wrote.
“The pandemic and virus-fighting measures appear to be disrupting that initial momentum as both buyers and sellers adopt a more cautious posture.”
Real-estate firms have taken steps to brace for the impact of the coronavirus pandemic.
So-called iBuyers including Zillow and Redfin that purchase homes from sellers and then sell them for a profit had wound down their home-buying operations in anticipation of an economic downturn.
Real-estate brokers, incuding Redfin and Re/Max, had also shifted toward virtual home tours as open houses became verboten in the wake of social-distancing recommendations.
And other recent reports have shown additional signs of a slowdown in the housing market.
LendingTree released an analysis of Google search data analyzing the popularity of the search term “homes for sale” across the country’s 50 largest metro areas.
Searches for “homes for sale” have fallen across all 50 cities in the study from their peak levels in 2020 thus far.
LendingTree estimated that these Google searches could drop some 63% compared with last year if the impact of the COVID-19 outbreak remains substantial for the next two months.
A drop in web searches could presage a decline in home sales.
Another sign that home sales will slump this spring: Mortgage applications.
The volume of mortgage applications for loans used to purchase homes was down 24% compared with a year ago for the week ending March 27, according to data from the Mortgage Bankers Association.
That’s in spite of mortgage rates being near historic lows.
Comparatively, the volume of refinance applications was 168% higher than a year ago.
Before the coronavirus pandemic flared up, the U.S. housing market was on relatively solid footing.
While the number of homes for sale remained low — constraining sales activity to an extent — demand among buyers was still quite high.
Low mortgage rates had fueled an early start to the spring home-buying season, with homes selling four days faster in March when compared with 2019 levels, Realtor.com found.
The jump in jobless claims has stoked concerns of a repeat of the Great Recession and the foreclosure crisis that preceded it.
But housing economists argue that this is unlikely to be the case.
“While housing led the recession in 2008-2009, this time it may be poised to bring us out of it,” Mark Fleming, chief economist for title insurance company First American Financial Corporation, wrote in a report this week.
Unlike in the 2000s, the housing market in the U.S. is not overbuilt, Fleming argued, making it less likely that a large swath of vacant properties will crater the home values for homeowners.
Rising home values and stricter lending standards have also meant that homeowners are sitting on historically high amounts of home equity.
“The housing market will not go unscathed, as consumer confidence and a strong labor market are essential in the decision to purchase a home,” Fleming wrote.
“Yet, this time, housing is a casualty of a public health crisis turned economic, not the cause of an economic crisis.”
https://www.marketwatch.com/story/ameri ... cle_inline
"America’s housing market is showing the first signs of trouble from the coronavirus pandemic"
By Jacob Passy
Published: April 6, 2020 at 3:11 p.m. ET
March started out as a strong month for the U.S. housing market — but by the second half of the month, the first indications that the coronavirus pandemic would weigh on home-selling activity began to emerge, according to a new report from Realtor.com.
In the weeks ending March 21 and March 28, the number of newly-listed properties fell by 13.1% and 34% respectively when compared with the same period a year ago, Realtor.com found.
This is an indication that home sellers may be holding off on listing their properties right now.
The pace of home-price growth also slowed notably in the latter half of the month, according to the report.
Home list prices were only up 3.3% year-over-year for the week ending March 21, and 2.5% for the following week.
This represented the slowest pace of listing price growth since Realtor.com started tracking this data in 2013.
“Our inventory and listing data can provide some early insight into how housing markets may be impacted by COVID-19, but the situation and reactions to it are still rapidly evolving,” Realtor.com chief economist Danielle Hale wrote in the report.
“The U.S. housing market had a good start to the year."
"Despite still-limited homes for sale, buyers were buying and builders were building,” she wrote.
“The pandemic and virus-fighting measures appear to be disrupting that initial momentum as both buyers and sellers adopt a more cautious posture.”
Real-estate firms have taken steps to brace for the impact of the coronavirus pandemic.
So-called iBuyers including Zillow and Redfin that purchase homes from sellers and then sell them for a profit had wound down their home-buying operations in anticipation of an economic downturn.
Real-estate brokers, incuding Redfin and Re/Max, had also shifted toward virtual home tours as open houses became verboten in the wake of social-distancing recommendations.
And other recent reports have shown additional signs of a slowdown in the housing market.
LendingTree released an analysis of Google search data analyzing the popularity of the search term “homes for sale” across the country’s 50 largest metro areas.
Searches for “homes for sale” have fallen across all 50 cities in the study from their peak levels in 2020 thus far.
LendingTree estimated that these Google searches could drop some 63% compared with last year if the impact of the COVID-19 outbreak remains substantial for the next two months.
A drop in web searches could presage a decline in home sales.
Another sign that home sales will slump this spring: Mortgage applications.
The volume of mortgage applications for loans used to purchase homes was down 24% compared with a year ago for the week ending March 27, according to data from the Mortgage Bankers Association.
That’s in spite of mortgage rates being near historic lows.
Comparatively, the volume of refinance applications was 168% higher than a year ago.
Before the coronavirus pandemic flared up, the U.S. housing market was on relatively solid footing.
While the number of homes for sale remained low — constraining sales activity to an extent — demand among buyers was still quite high.
Low mortgage rates had fueled an early start to the spring home-buying season, with homes selling four days faster in March when compared with 2019 levels, Realtor.com found.
The jump in jobless claims has stoked concerns of a repeat of the Great Recession and the foreclosure crisis that preceded it.
But housing economists argue that this is unlikely to be the case.
“While housing led the recession in 2008-2009, this time it may be poised to bring us out of it,” Mark Fleming, chief economist for title insurance company First American Financial Corporation, wrote in a report this week.
Unlike in the 2000s, the housing market in the U.S. is not overbuilt, Fleming argued, making it less likely that a large swath of vacant properties will crater the home values for homeowners.
Rising home values and stricter lending standards have also meant that homeowners are sitting on historically high amounts of home equity.
“The housing market will not go unscathed, as consumer confidence and a strong labor market are essential in the decision to purchase a home,” Fleming wrote.
“Yet, this time, housing is a casualty of a public health crisis turned economic, not the cause of an economic crisis.”
https://www.marketwatch.com/story/ameri ... cle_inline
Re: THE HOUSING MARKET
MARKETWATCH
"More than half of renters say they lost jobs due to coronavirus: ‘They could face housing situations that spiral out of control’"
By Quentin Fottrell
Published: April 9, 2020 at 5:26 p.m. ET
The longer some people stay at home, the more difficulty they have making ends meet.
“Low-income renters — many of whom work in service industries hit hard by the pandemic shutdown — are at high risk for eviction and homelessness during shelter-in-place measures,” according to a report by Mary Cunningham, a fellow at the Urban Institute, a left-of-center nonprofit policy group.
The recent $2 trillion CARES Act, a federal stimulus package, “didn’t do enough to address increases in housing insecurity for the nearly 11 million low-income renter households paying more than half their income toward rent before the pandemic,” Cunningham added.
“Eventually, the rent will be due and someone needs to pay it,” she wrote.
“Low-income renters, especially those who lose employment during the crisis, will have a hard time paying back rent, and they could face housing situations that spiral out of control.”
More than half (53.5%) of renters reported that they lost their job due to the measures introduced in their town or city due to the COVID-19 pandemic, concluded a survey made up of 2,775 landlords and 7,379 tenants by Avail, an online resource for landlords.
“Some cities are also requiring renters to provide documentation demonstrating that their inability to pay rent is a result of circumstances created by the coronavirus,” Avail’s report said.
But 66% of renters said they did not know if their state had paused evictions or was considering such moves.
The National Multifamily Housing Council tracked data from 13.4 million apartment units and found that 31% of renters had not paid their rent in the first week of April, up from 19% for the same period in the previous month, according to a report released this week.
“The COVID-19 outbreak has resulted in significant health and financial challenges for apartment residents and multifamily owners, operators and employees in communities across the country,” said Doug Bibby, the president of the National Multifamily Housing Council.
Almost half (46%) of renters say they have less than $500 in emergency funds, while 22% of homeowners say they don’t have enough saved to cover their mortgage payment for a month, according to a separate poll of 1,000 renters and homeowners from Clever, an online service connecting house hunters with real-estate agents.
Ben Mizes, the CEO of Clever, said the cuts in lower-paid jobs in recent months were “hurting the people who need their paycheck the most,” echoing a study by Deutsche Bank that said high-wage jobs were the least affected by the coronavirus pandemic last month.
Rafael Nunez, 30, who works as a plumber in New York City, said his boss called him on Sunday to tell him that there was not enough work.
“I could be home for three weeks."
"I could be home for four days."
"I have no idea,” he previously told MarketWatch.
“I even got a piece of paper in my paycheck saying that we cannot use any vacation hours or any sick hours,” he said.
“That’s really upsetting because Passover is coming up."
"Usually, I get paid for that with my vacation hours, and now it’s like a whole month without pay again.”
He said his savings are running out.
“We’re going to pay for this month."
"That’s what we’re leaning towards right now."
"But next month is still in the air.”
Nunez said his landlord had the same problems with other tenants.
“They seemed like they were chickens running around with their head cut off.”
Nunez spoke to his landlord to waive late fees and avoid eviction.
In the midst of COVID-19, many cities and states have issued moratoriums on evictions.
The CARES Act also temporarily prohibits evictions for certain properties funded by the Department of Housing and Urban Development.
(Jacob Passy contributed to this story.)
https://www.marketwatch.com/story/they- ... _headlines
"More than half of renters say they lost jobs due to coronavirus: ‘They could face housing situations that spiral out of control’"
By Quentin Fottrell
Published: April 9, 2020 at 5:26 p.m. ET
The longer some people stay at home, the more difficulty they have making ends meet.
“Low-income renters — many of whom work in service industries hit hard by the pandemic shutdown — are at high risk for eviction and homelessness during shelter-in-place measures,” according to a report by Mary Cunningham, a fellow at the Urban Institute, a left-of-center nonprofit policy group.
The recent $2 trillion CARES Act, a federal stimulus package, “didn’t do enough to address increases in housing insecurity for the nearly 11 million low-income renter households paying more than half their income toward rent before the pandemic,” Cunningham added.
“Eventually, the rent will be due and someone needs to pay it,” she wrote.
“Low-income renters, especially those who lose employment during the crisis, will have a hard time paying back rent, and they could face housing situations that spiral out of control.”
More than half (53.5%) of renters reported that they lost their job due to the measures introduced in their town or city due to the COVID-19 pandemic, concluded a survey made up of 2,775 landlords and 7,379 tenants by Avail, an online resource for landlords.
“Some cities are also requiring renters to provide documentation demonstrating that their inability to pay rent is a result of circumstances created by the coronavirus,” Avail’s report said.
But 66% of renters said they did not know if their state had paused evictions or was considering such moves.
The National Multifamily Housing Council tracked data from 13.4 million apartment units and found that 31% of renters had not paid their rent in the first week of April, up from 19% for the same period in the previous month, according to a report released this week.
“The COVID-19 outbreak has resulted in significant health and financial challenges for apartment residents and multifamily owners, operators and employees in communities across the country,” said Doug Bibby, the president of the National Multifamily Housing Council.
Almost half (46%) of renters say they have less than $500 in emergency funds, while 22% of homeowners say they don’t have enough saved to cover their mortgage payment for a month, according to a separate poll of 1,000 renters and homeowners from Clever, an online service connecting house hunters with real-estate agents.
Ben Mizes, the CEO of Clever, said the cuts in lower-paid jobs in recent months were “hurting the people who need their paycheck the most,” echoing a study by Deutsche Bank that said high-wage jobs were the least affected by the coronavirus pandemic last month.
Rafael Nunez, 30, who works as a plumber in New York City, said his boss called him on Sunday to tell him that there was not enough work.
“I could be home for three weeks."
"I could be home for four days."
"I have no idea,” he previously told MarketWatch.
“I even got a piece of paper in my paycheck saying that we cannot use any vacation hours or any sick hours,” he said.
“That’s really upsetting because Passover is coming up."
"Usually, I get paid for that with my vacation hours, and now it’s like a whole month without pay again.”
He said his savings are running out.
“We’re going to pay for this month."
"That’s what we’re leaning towards right now."
"But next month is still in the air.”
Nunez said his landlord had the same problems with other tenants.
“They seemed like they were chickens running around with their head cut off.”
Nunez spoke to his landlord to waive late fees and avoid eviction.
In the midst of COVID-19, many cities and states have issued moratoriums on evictions.
The CARES Act also temporarily prohibits evictions for certain properties funded by the Department of Housing and Urban Development.
(Jacob Passy contributed to this story.)
https://www.marketwatch.com/story/they- ... _headlines