Category Archives: Real Estate

First signs of housing disruption appear

Economists have been waiting for the first signs of virus-related disruptions in housing with the expectation that they will be seismic. Federal housing data looks further back for trends, meaning there is a lag in real world activity. But details have begun to emerge in private surveys.

On Wednesday, the Mortgage Bankers Association reported that mortgage applications plunged 29.4% last week. People trying to sell homes have cancelled showings during the outbreak and because closings are done in person, economists expect sales will decline sharply. But the virus has affected the market in other, unforeseen ways as well.

Despite additional cuts to benchmark interest rates by the U.S. Federal Reserve, mortgage rates have actually been rising.

Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said that’s partially because lenders amid the outbreak are wrestling with capacity issues, backlogs in the pipeline, and the challenge of working remotely in real estate.

“Home purchase applications were notably impacted by rising rates and the widespread economic disruption and uncertainty over household employment and incomes,” Kan wrote. “Last week’s purchase index fell 15% to its lowest level since August 2019.”

While mortgage applications fall, refinancing, which can be done from home, is soaring. Lending Tree says the economic effects of the virus outbreak have led to unprecedented volatility in mortgage interest rates and an overwhelming surge of borrower demand. The company’s data shows that refinance mortgage applications through its marketplace tripled from a year ago in each of the 50 largest cities and in all but five states. In San Francisco, refinance loan requests skyrocketed 417%.

Home sales drop in February

US new home sales fell 4.4% in Feb with bigger declines expected in coming months as the Covid-19 puts a major crimp on home sales.

US foreclosure activity up 13% in January 2020, 2nd consecutive month over month increase

There were 60,085 U.S. properties with foreclosure filings in January 2020, up 13 percent from December 2019 and up 7 percent from a year ago. Nationally, one in every 2,270 U.S. properties received a foreclosure filing during the month of January.

Counter to the national trend, 16 states posted month-over-month decreases in foreclosure activity in January 2020. Including Iowa (down 44 percent); Oregon (down 28 percent); Nevada (down 28 percent); Louisiana (down 24 percent); and Washington (down 20 percent). ATTOM’s Foreclosure Market Trend Reports offer a detailed look at foreclosure data.

Foreclosure starts decrease from last year

Lenders started the foreclosure process for the first time on 26,858 property owners in January 2020, down less than 1 percent from the previous month but down 9 percent from a year ago.

Counter to the national trend, 19 states posted year-over-year increases in foreclosure starts, including California (up 27 percent); Tennessee (up 21 percent); Georgia (up 14 percent); Illinois (up 9 percent); and Ohio (up 3 percent).

Also, counter to the national trend, 75 of 220 metro areas analyzed posted year-over-year increases in foreclosure starts, including San Antonio, Texas (up 66 percent); Los Angeles, California (up 63 percent); Riverside, California (up 22 percent); Nashville, Tennessee (up 19 percent); and Chicago, Illinois (up 14 percent).

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