Home Sales Surpass Pre-Pandemic Numbers

Redfin’s report on housing reveals that for the week ending on July 5, home sales rose once more. Specifically, home sales rose by 2% when compared to pre-pandemic home sales.

This recovery in the housing market marks the very first time that home sales have surpassed pre-pandemic levels since January and February. According to Redfin, this increased housing demand is due to the low mortgage rates currently available.

Freddie Mac’s Primary Mortgage Market Survey revealed that mortgage rates fell below 3% for the first time in 50 years, with the rate for a 30-year fixed-rate mortgage falling to 2.98%.

These more affordable mortgage rates have brought about greater access to homeownership, thus increasing pending home sales and homebuyer demand. Rob Foos, a Boston-based Redfin mortgage advisor, had weighed in on the current state of housing.

“The industry is responding to an avalanche of applications for refinances and purchases. A combination of rock-bottom rates plus pent-up purchase demand has resulted in the highest levels of purchase applications in about a decade,” he said.

Experts only expect these upticks to continue in an upward trajectory moving forward. In fact, pointing to the fact that pending sales grew 10% from pre-pandemic levels (seasonally adjusted). Redfin tentatively asserts that the market is on its way to recovery.

But with the increased buyer demand and still limited of supply, bidding wars have really heated up, with real estate agents reporting that it has been difficult to keep pace with client demand. Specifically, statistics reveal that the number of U.S. homes available on the market currently is down more than a quarter (28%) from this same time last year.

Redfin agents also revealed that this lack of homes for sale on the market has also ushered in a wave of fear from sellers who worry over being able to find a new home of their own once their property closes. Redfin agent Thomas Wiederstein shared his firsthand experience with this phenomenon.

“Some of my clients are considering selling, but it’s a matter of finding a home they can buy. Even if they do find a home that checks all the boxes, many move-up buyers can’t buy a new home before they sell their current one. With bidding wars so common, it’s very hard to get an offer accepted that’s contingent on the sale of the buyer’s current home,” he said.

With no signs of the market slowing down, Redfin is still cautious when it points to how the market may be tested at the end of the month, with the CARES Act’s benefits set to expire on July 31.

Source: MReport 7/16/2020   Author: Andy Beth Miller

Housing Inventory Down 32% Annually

As the U.S. posts around 60,000 new Coronavirus cases daily for several days in a row, the housing market seems to be returning to close to its pre-pandemic levels of activity.

Realtor.com reported its Housing Market Recovery Index for the week ending July 11 was 98.5, with a benchmark of 100 marking “pre-COVID levels.” This is a 0.7-point increase from the previous week.

The report measures time on the market, median list prices, and new listings for its recovery index. For the week ending July 11, time on the market was one day more than last year. Median list prices were 7.9% higher than a year ago, and new listings were down 19% over the year.

Total inventory, however, is down 32% from a year ago. The low inventories alongside record-low mortgage rates have created a market that clearly favors sellers.

Some of what would probably have been spring demand has been pushed into summer.

Eighteen of the major metros tracked by realtor.com are already above their pre-pandemic levels.

Markets in the West fared the best with an index of 104.6 for the region overall. The Northeast is also above its pre-pandemic level with a reading of 102.6 for the latest index.

The South charted a 96.3, and the Midwest index sat at 95.3. Not only are these regions behind their pre-pandemic levels, but Realtor.com reported that they are “losing momentum in the recovery.”

The Seattle metro is performing best with an index reading of 115.5, while the Boston metro followed close behind at 114.1. Denver and Philadelphia came next, both ranking just above 109, and New York and Los Angeles followed with a reading of 108.1.

The metros with the furthest to go toward recovery are Milwaukee (85.9) and Oklahoma (88.4).

“Homebuyers, trying to take advantage of record-low mortgage rates and make up for lost time, are finding limited and more expensive options,” said Danielle Hale, Chief Economist for Realtor.com.

“Although sellers are slowly acclimating to this unexpected surge in buyer interest, inventory is still lagging behind demand which is driving quick time on market and listing price growth on par with this time last summer.”

BuildFax reported that while housing activity fell overall in June, “the data tells a more nuanced story,” pointing out that “The number of single-family housing authorizations experienced the steepest year-over-year decline in recent history. Meanwhile, existing housing activity remained relatively flat.”

BuildFax also noted that construction activity has declined as COVID-19 cases have risen and shared maps of construction permit activity alongside COVID-19 cases.

Source: MReport 7/16/2020 Author: Krista Brock

Mortgage Delinquencies Hit Four-year High

The share of mortgage loans that became delinquent in April outpaces anything seen during the Great Recession and is the highest rate on record in 21 years, according to CoreLogic’s data. During the month of April, 3.4% of mortgages went from current to 30 days past due, outpacing the 2% high recorded in late 2008.

The overall national delinquency rate in April stood at 6.1%, according to CoreLogic’s Loan Performance Insight Report, released Tuesday. CoreLogic clarified that all loans in forbearance are counted in its report as in past-due or delinquent status.

Not only does April’s delinquency rate mark the highest in four years, but it also brings an end to 27 straight months of falling annual delinquency rates.

“Despite the scale and suddenness of the pandemic, mortgage delinquency has yet to emerge as a major issue, thanks to government COVID-19 relief programs and other housing finance industry efforts,” said Frank Martell, President and CEO of CoreLogic. “As the true impact of the economic shutdown during the second quarter of 2020 becomes clearer, we can expect to see a rise in delinquencies in the next 12-18 months—especially as forbearance periods under the CARES Act come to a close.”

The share of mortgages in early-stage delinquency in April was significantly higher than the shares that were seriously delinquent. Instead, the serious delinquency rate wallowed to its lowest level in about 20 years, and the foreclosure rate experienced a slight decline as well.

The share of loans that were between 30 and 59 days past due in April was 4.2%, a significant jump from the 1.7% recorded last April. On the other hand, the share of loans that were seriously delinquent, meaning at least 90 days past due, was 0.3%, down slightly from 0.4% a year ago.

New York had the highest loan delinquency rate of any state, at 10%. Louisiana, New Jersey, and Mississippi had the next-highest delinquency rates. South Dakota had the lowest loan delinquency rate at 3%.

Among metro areas, those that typically serve as tourist destinations are suffering high delinquency rates. For example, CoreLogic pointed out that Kahului, Hawaii; Atlantic City, New Jersey; and Las Vegas all experienced a 5 percentage point or higher rises in delinquencies in April.

Miami charted the highest delinquency rate among the major metros across the nation with 11.5% of all properties in some stage of delinquency, which is 6.7 percentage points higher than a year ago.

Denver fared the best with 3.7% of properties in delinquency.

The serious delinquency rate increased in 63 metros in April while remaining stable in 135 metros.

Looking ahead, CoreLogic anticipates a spike in late-stage delinquencies and foreclosures this year. The analytics firm already released its home price prediction, anticipating a 6.6% decline in prices by May 2021, which would diminish many borrowers’ existing equity.

Source: DS News 7/14/2020 Author: Krista Brock