Residential construction rates soared in July with both permits and starts increasing from their June pace by double digits and topping 2019 numbers for the same period. Completions also rose, but at a more subdued rate.
The U.S. Census Bureau and Department of Housing and Urban Development said permits were issued during the month at a seasonally adjusted annual rate of 1,495,000, an 18.8 percent gain from June. That June rate was also higher than originally reported, revised from 1,241,000 to 1,258,000. Permitting is now up by 9.4 percent from the same period in 2019.
Permitting was significantly higher than had been forecast – with estimates among analysts polled by Econoday of 1,200,000 to 1,380,000 units. The consensus was 1,300,000
Experts are weighing in on the recently released new residential construction report from the Census Bureau. According to the report, July’s housing demand is ablaze with would-be buyers driven by low mortgage rates and a desire (especially among Millennials) to migrate to the suburbs from the cities. In order to try to meet rising demand, builders have ramped up efforts.
The trend, economists say, is partly due to the fact that pandemic-related working from home means commute times are no longer a major factor for some people.
The real estate experts at Redfin recently released a report covering the current trends in housing migration. According to the report, the demand for homes in rural and suburban areas is skyrocketing as more people seek to escape big cities.
Although the U.S. economy experienced a setback in the second quarter, contracting by 32.9% (annualized), all seems not to be lost according to experts.
Even though this second quarter showing marked the largest decline since the demobilization efforts after World War II, experts point to the healthy rate of recovery in the economy that was seen this past May and June, a momentum which they say is perfectly setting up this coming third quarter for an equally healthy rebound.
Median Sales Price: $568,995; Homes Sold: 265; Days on Market: 8
Median Sales Price: $515,000; Homes Sold: 158; Days on Market: 6
Median Sales Price: $519,000; Homes Sold: 139; Days on Market: 6
Median Sales Price: $400,000; Homes Sold: 213; Days on Market: 5
Median Sales Price: $469,700; Homes Sold: 233; Days on Market: 8
Today’s Daily Download episode features an interview with Bob Broeksmit, president and CEO of the Mortgage Bankers Association. Broeksmit discusses the Federal Housing Finance Agency’s recent decision to implement a new fee on mortgage refinances, a decision that was made without prior counsel from the MBA.
“[This] puts into effect a massive price increase with virtually no notice, meaning that hundreds of millions of dollars will be taken from the pockets of lenders who cannot pass along this unanticipated cost and worse, consumers will be on the hook for billions starting today when everybody’s costs went up by half a point,” Broeksmit said. “It’s outrageous and unprecedented.”
The announcement, released at the end of the day on Wednesday, stated that refinance mortgage loans sold to Fannie Mae and Freddie Mac after Sept. 1 will include a new adverse-market refinance fee of 0.5%. This fee will be assessed for both cash-out and no-cash-out refinances, and it could cost homeowners $1,400, a move Broeksmit said is disturbing beyond belief.
“At a time when the country is reeling economically, and the government is trying to provide relief and stimulus to this shaken economy,” Broeksmit said. “To grab $1,400 dollars per loan on low-risk refinances at Fannie Mae and Freddie Mac is disturbing beyond belief.”
The Oregon Employment Department on Tuesday said the state’s unemployment rate dropped to 10.4 percent in July from 11.6 percent in June.
The state added 20,500 jobs in July, down from the 57,000 added in June. The state has now regained 38 percent of the jobs lost since the pandemic started in March.
The largest July job gains were in leisure and hospitality, which added 7,300 jobs, as restaurants and hotels slowly reopened. Retail added 3,600 jobs, health care added 3,100 jobs and business services added 1,900 jobs.
Refinance loans continued to dominate mortgage originations in July, but the gap with purchase loans is closing. Ellie Mae’s Origination Insight Report for the month showed refinances with a 54 percent share, down from 58 percent in June. Purchasing increased to 46 percent from 42 percent.
The rate on closed 30-year fixed rate mortgages declined from an average of 3.40 percent the previous month to 3.24 percent.
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