Housing starts have performed below expectations in August, signaling lesser construction of apartments. This does not bode well for the broader economy because the housing industry is one of the few ignitions it has in the corona-infested 2020. Residential starts have come down by 5.1% compared to July, says a government report. Bloomberg had anticipated 1.49 million but all we have managed to get in August is 1.42 million. Fewer permits, to the tune of 0.9%, have been granted in August for multifamily homes. July’s surge of 17.9% was a first of its…
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Mortgage Originations May beat 32 Years’ Record in 2020
2020 may just turn out to be a classic year for mortgage originations, feels Fannie Mae. Refinancings, riding on the back of low mortgage rates along with unexpectedly high activity in new and existing homes may see to this. Fannie Mae believes that mortgage originations in ‘20’ are likely to be close to $3.87 trillion, beating any number Fannie has tracked for the last 32 years. Doug Duncan, Fannie Mae’s Chief Economist stated in a press release that "As expected, the pace of economic recovery is slowing, but housing remains highly supportive. The…
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Affordability Rears its Head Again
Many affordable housing markets have seen a hike in home prices, making them a tough grab for the buyers, says Redfin. Daryl Fairweather, Redfin’s Chief Economist, stated in a press release that "Home price growth this high is making the housing market especially difficult for first-time homebuyers right now. Rising prices are just one more reason for people to leave expensive urban neighborhoods behind." "Price growth may slow in 2021, but even if it does, high prices are going to continue to make affordability a concern for buyers," added Fairweather. For the four…
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Mortgage Credit Availability Hits Lowest Point in Six Years
Mortgage credit availability has declined considerably, reaching the lowest point it has reached in six years, according to the Mortgage Bankers Association (MBA). The Mortgage Credit Availability Index (MCAI) dropped to 120.9 in August, which is a 60.8 point decrease from August 2019 (181.7). MCAI Trend (Source: Mortgage Bankers Association) Joel Kan, the MBA’s Vice President of economic and industry forecasting, remarked that uncertainty around the job market and its future was likely to be the reason behind tightening credit. When lending standards become tighter, fewer mortgages are available and fewer still borrowers…
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Pandemic Changes Homebuyers’ Preferences
TD Bank surveyed 380 borrowers from the South, 240 from the West, 210 from the Northeast, and 170 from the Midwest. To add, 6% of those surveyed were born in or before 1945. 39% were Millennials, and 27% from the Gen X, and 28% Baby Boomers. The 1000 borrowers, surveyed in June, provided revealing insights into how the pandemic was shifting homebuyers’ preferences. It was interesting that 7% of the respondents were keen to raise their housing expenses while 29% wished to bring down the housing payments. 64% of the respondents were just…
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Price Hikes can Signal which Way Demand is Going
One way to form an opinion about demand is to look at the number of listings that have seen a price hike. One reason for such increases is real estate flipping. Investors buy a property, do some work on it, and sell it at a better price. It is done quickly enough. Property prices generally rise to a range where the shopper demand is at the maximum level. This task is accomplished through adequate marketing and sales strategy. Another way this works is via the big institutions. They buy property at a discounted…
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Mortgage Applications Reverse Month-Long Drop in Numbers
For the first time in four weeks, mortgage applications saw a hike, rising by 2.9% over the last week. The housing demand is atypically strong as we come to the end of summer, says the Mortgage Bankers Association. The MBA's associate vice president of economic and industry forecasting, Joel Kan, stated in a press release that “Purchase applications were 40% higher than the same week last year, but the increase is skewed higher by being compared to Labor Day 2019. Nevertheless, there continues to be resiliency in the purchase market. Applications were up…
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Active Listing is a Crucial Index For Judging Demand
The housing market is in hot momentum. The median price of America’s single-family home is sitting at $354,000 this week. This is 9% higher than at the same time last year, and fractionally more than the week prior. As the things are spread out, it is likely that we will be 8-9% gainers on the yearly chart till October for sure. Holidays should restore some normalcy because sustained 8-9%, honestly, is too intense to be managed. The inventory has been terribly short and buyers, pressed back for long by the pandemic, are on…
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Nonbank Mortgage Firms Increase Hiring Rate
The payrolls of the nonbank mortgage bankers and brokers cumulatively increased by roughly 2% on the monthly chart and 9% on the yearly chart, divulges the latest report of the Bureau of Labor Statistics. While the expectations were rather mute, given the traditionally lackluster buying numbers in fall, many nonbank mortgage houses are hiring at a decent rate, believing that it is the time to execute ambitious plans. For instance, Mr. Cooper proposes to hire 2,000 employees. AmeriSave Mortgage Corp. is looking for the same number of recruits. As early as in July, Freedom…
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More than Half U.S Properties Involved in Bidding Wars
Five times more U.S properties went into bidding wars in August, compared to the same month last year, says a Redfin data. Squeezed inventory has led to a hike in buyer demand which has seen as many as 54.5% properties undergoing a series of increasing price bids. In some of the metro areas, as many as 65% properties were involved in such wars. “The market is on fire. There just isn't enough on the market to supply the huge demand for homes. A lot of military buyers are trying to take advantage of…
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