Mortgage Applications Continue Surprising Rebound – Industry Outlook

By May 22, 2020Industry Outlook

Fannie, Freddie Extend Ban on Evictions, Foreclosures – According to the Federal Housing Finance Agency’s recent announcement, they will extend a moratorium on foreclosures and evictions for mortgages backed by Fannie Mae and Freddie Mac until at least June 30. Originally, the moratorium was set to expire May 17, but the FHFA decided to change course as the nation continues to feel the economic effects of the COVID-19 pandemic. “During this national health emergency, no one should be forced from their home,” FHFA Director Mark Calabria said in a statement. “Extending the foreclosure and eviction moratoriums protects homeowners and renters, and provides certainty for families.” The FHFA ban on evictions and foreclosures applies only to properties with government-backed mortgages. That covers about 70% of all home loans, reports. The FHFA’s announcement comes on the heels of the House of Representatives unveiling a $3 trillion proposal, known as the HEROES Act, which includes a motion to stop residential evictions for a year and foreclosures for six months. If passed, the legislation would apply to government-backed loans as well as private home loans.

Source and link to the full article:  “Freddie Mac and Fannie Mae Extend Ban on Evictions and Foreclosures Until June 30,” (May 14, 2020) and “FHFA Extends Foreclosure, Eviction Moratoriums for GSE-Backed Mortgages,” ABA Banking Journal (May 14, 2020)

Prices Strong Despite Lockdowns Hindering April Sales – Based on the National Association of REALTORS® report, the latest existing-home sales numbers show a housing market facing the headwinds of the COVID-19 pandemic in April. Existing-home sales fell 17.8% last month compared to March, marking a two-month decline in sales. Still, home prices remain resilient in the face of the pandemic. The median existing-home price for all housing types in April jumped 7.4% compared to a year ago ($286,800). All four major regions of the U.S. saw annual gains in home prices, too. But total existing-home sales which are completed transactions that include single-family homes, townhomes, condos, and co-ops fell to a seasonally adjusted annual rate of 4.33 million in April. Sales were down 17.2% compared to a year ago (5.23 million existing-home sales in April 2019). Existing-home sales are at the lowest level since July 2010. “The economic lockdowns, occurring from mid-March through April in most states have temporarily disrupted home sales,” says Lawrence Yun, NAR’s chief economist. “But the listings that are on the market are still attracting buyers and boosting home prices.”

Source and link to the full article:  National Association of REALTORS(R) 

Mortgage Applications Continue Surprising Rebound – According to the Mortgage Bankers Association’s seasonally adjusted index, it shows that buyers are reemerging in the housing market much faster than anticipated. Mortgage applications are often an indicator of future home buying activity. After increasing 6% last week compared to the previous week, applications for home purchases are now just 1.5% lower than a year ago. The rebound is significant considering purchase volume was down 35% annually just six weeks ago as the U.S. ramped up its battle against the COVID-19 pandemic. “Applications for home purchases continue to recover from April’s sizable drop and have now increased for five consecutive weeks,” says Joel Kan, an MBA economist. “Government purchase applications, which include FHA, VA, and USDA loans, are now 5% higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months.”

Source and link to the full article:  “Weekly Mortgage Applications Point to a Remarkable Recovery in Homebuying,” CNBC (May 20, 2020)

Builders are Optimistic – Based on the Housing and Urban Development and Commerce report, construction of new homes saw a large decrease in activity last month, as the COVID-19 pandemic spurred social distancing protocols and stay-at-home orders. Total housing starts plunged by 30% in April to a seasonally adjusted rate of 891,000 units. Broken out, construction on single-family homes decreased 25% to a 650,000 seasonally adjusted annual rate, which is the lowest single-family starts rate since the first quarter of 2015. The multifamily sector saw construction activity fall by 40.5% to a 241,000 pace. “Despite today’s numbers, there is an undercurrent of long-term positivity in the housing market that will allow for a strong rebound,” says Dean Mon, chairman of the National Association of Home Builders. “Our builder confidence index has already shown signs of a turnaround. Housing was showing signs of momentum before the pandemic and is poised to lead the economic recovery as virus mitigation efforts take hold and more states take gradual steps to reopen.”

Source and link to the full article:  National Association of Home Builders

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