How COVID-19 Is Affecting the New-Home Market – Industry Outlook

By April 28, 2020Industry Outlook

Mortgage Rates Settle Near Historical Lows – Based on Freddie Mac reports, the 30-year fixed-rate mortgage averaged 3.33% recently, near its all-time low. “Mortgage rates have stabilized over the last few weeks as the market searches for direction in the fog of economic data,” says Sam Khater, Freddie Mac’s chief economist. “While financial markets initially rallied on the news of Federal Reserve support and are improving due to the Senate’s passage of a new small business stimulus, we continue to see a deep economic contraction amidst uncertainty about the recovery formation.”


Source and link to the full article: Freddie Mac

FHFA Won’t Require Lump-Sum Payment After Forbearance – According to The Federal Housing Finance Agency, (which regulates giants Fannie Mae and Freddie Mac), confirmed in their statement that it will not require homeowners who take mortgage forbearance due to financial hardship from the COVID-19 pandemic to make up the missed payments in a lump sum. The FHFA made the announcement after news stories cautioned that homeowners who take forbearance would be on the hook to repay missed payments in a lump sum as soon as their forbearance period ends. Recent stimulus legislation had not clarified the repayment process. Borrowers with Fannie-backed and Freddie-backed loans who take forbearance will be contacted by their mortgage servicer before the end of their forbearance period to work out repayment options, which may include modifying the loan so the borrower’s payments are added to the end of the mortgage.

Source and link to the full article:  Federal Housing Finance Agency and “Fannie-Freddie Won’t Require Lump-Sum Forbearance Repayments,” Bloomberg (April 27, 2020)  

How COVID-19 Is Affecting the New-Home Market – According to data from the U.S. Census Bureau and Department of Housing and Urban Development, the new-home market was showing a strong first quarter in 2020 until the pandemic hit. Sales of newly built single-family homes decreased 15.4% in March to a seasonally adjusted annual rate of 627,000 units. Sales were 9.5% lower than a year ago, and markets hardest hit by COVID-19 saw the largest slowdown in sales last month. “Despite the sharp decline in new-home sales last month, the first quarter of 2020 was actually 6.7% higher than the same period last year, reflecting a strong pace prior to the virus outbreak,” said Dean Mon, chairman of the National Association of Home Builders. “While we expect to see some further impacts to the industry, we remain confident that housing will be a sector that will help lead the economic recovery.” Inventory of new homes increased to a 6.4-month supply in March. There were 333,000 new single-family homes for sale last month, which is 1.2% fewer than a year ago. The NAHB reports that of that total, 76,000 are completed and ready to occupy.

Source and link to the full article:  National Association of Home Builders and “New-Home Sales Plummeted in March. What Does This Mean for the Future?”® (April 23, 2020)

Home Showings Are on the Rise After Steep Fall Off – Based on the national showing service ShowingTime, home showings are on the rise. While showings dropped between March 12 and April 12, data from the home showings have been on the upswing, with a 39% increase in the last two weeks. The uptick is likely due to virtual showings rather than in-person showings. The largest increase in showings has been for homes priced $300,000 to $500,000 as well as those over $800,000, according to ShowingTime.

Source and link to the full article:  ShowingTime and “A Sign of Hope? Home Showing Data Shows Increase Over Past Two Weeks,” (April 22, 2020)

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