Fall Home Sales Surge Ahead of Normal Patterns – Industry Outlook

By October 26, 2020Industry Outlook

FHA Extends Forbearance Options Until End of Year – According to the U.S. Department of Housing and Urban Development’s announcement, single-family homeowners with FHA-insured mortgages who are struggling financially amid the pandemic now have through December 31st to submit an initial forbearance request. The original deadline was set for October 30th, for those needing to make an initial COVID-19 related forbearance request to their lender. The change puts FHA’s forbearance actions in line with its extended foreclosure moratorium, which expires December 31st. “By providing this important extension, FHA seeks to assist those struggling with the continued financial effects of the COVID-19 pandemic,” said Dana Wade, HUD assistant secretary for housing and federal housing commissioner, in a statement. “Our goal is to make sure that no homeowner loses their home unnecessarily as a result of this pandemic.” For homeowners who request it, the FHA requires lenders to provide up to six months of COVID-19 forbearance. Six more months can be added for homeowners who request an extension from that initial forbearance.

Source and link to the full article:  HUD.gov

Record-High Lumber Costs Drive Up New-Home Prices – Based on data from the National Association of Home Builders, shoppers seeking newly constructed homes are facing sharply increased prices as the cost of lumber has soared to record highs. Many buyers are finding themselves priced out of the new-home market, builders say. Recent price spikes in lumber have added more than $16,000 to the typical cost of a new single-family home. The multifamily sector is also feeling the impact, with the typical apartment seeing an increase of more than $6,000. The increase has priced more than 2.1 million U.S. households out of the market for a median-priced new home, according to the NAHB.

Source and link to the full article:  “NAHB Warns That Record-High Lumber Prices Could Drive Up Housing Costs,” BUILDER (Oct. 9, 2020)

Fall Home Sales Surge Ahead of Normal Patterns – According to a recent report from the National Association of REALTORS®, home sales and home prices are increasing by double digits, with homes flying off the market in record time. Existing-home sales increased for the fourth consecutive month in September, up nearly 21% compared to a year ago. All major regions of the U.S. saw month-over-month and annual gains in September. The Northeast experienced the largest increase in home sales. “Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season,” says Lawrence Yun, NAR’s chief economist. “I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace, including buyers of vacation homes given the greater flexibility to work from home.” Total existing-home sales completed transactions that include single-family homes, townhomes, condos, and co-ops—increased 9.4% from August to a seasonally adjusted annual rate of 6.54 million in September, NAR’s index shows.

© National Association of REALTORS®

Source and link to the full article:  National Association of REALTORS®  

Some Owners Turn to Home Equity to Help Adult Children Buy – Based on a survey by financial services company Legal and General, as affordability concerns continue to hinder first-time buyers ready to enter the market, those buyers are finding additional help from their families as parents leverage their own home equity to help their adult children become homeowners. Forty-three percent of home buyers under the age of 35 received either partial or full down payment assistance from their parents or family members. But “the increased equity parents have enjoyed has often come at the expense of unaffordability for their children,” writes Rayan Rafay, COO and CFO of Fraction, which advises startups, for Forbes.com. The higher prices often require larger amounts to reach an affordable monthly payment. Parents helping their adult children can use a home equity line of credit, if they still have a mortgage, or a regular amortizing mortgage if they fully own their homes. These come with monthly payments, however. Other options include appreciation mortgages, home co-investments, and reverse mortgages, which can prevent a reduction in monthly cash flow. These options also require no monthly payment.

Source and link to the full article:  “Home Equity Is One Way to Help Your Children Enter the Housing Market,” Forbes.com (Oct. 20, 2020)

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