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In the Know: A Roundup of This Week’s Local and National Real Estate Stories

Home Prices Hit Record Highs. Is It a Bubble About to Burst? (, August 24)

In some metropolitan areas, prices have shot up by more than 20% in the past year alone. Just how sustainable is this seemingly irrational home price exuberance, anyway? Could we be entering the dreaded bubble territory once again?

Nationally, the median home list price rose 10.1% year over year in the week ending Aug. 15, according to the most recent® figures. No one predicted such a dramatic increase compared with 2019—when the economy was strong, no one had heard of COVID-19 and social unrest hadn’t exploded. In fact, many experts predicted prices would flatten, if not fall.

Reality check: If there is a current-day bubble, it bears little resemblance to the gigantic bubble created by subprime mortgages, which burst into the Great Recession. Then came the mass foreclosures, plummeting home values, and the scores of homeowners suddenly underwater on their mortgages.

This year’s sky-high prices are driven by a rush of buyers competing for a very limited supply of properties. More demand than supply equals higher prices.

“Some markets are overvalued,” says Javier Vivas,’s director of economic research. “Growth of prices in a recession is pointing in that direction. Some markets are seeing increased risks of price corrections.”



What’s Going On With Mortgage Rates? A Definitive Guide As Of August 26th, 2020 (Mortgage News Daily, August 26)

With several major developments and interesting milestones in the mortgage world, I’m seeing a lot more confusion than normal.  So let’s clear it up without too many extra words or meaningless rants. – Matthew Graham, COO Mortgage News Daily



As the economy stays down, Portland home prices continue to rise (Portland Business Journal, August 25)

Homebuyers are buying by the thousands.

Portland-area home values haven’t crashed during this economic downturn like they did following the 2008 financial crisis. While low mortgage rates give house shoppers reason to act, they still need to have a plan for paying increasingly high costs of homeownership. They face an added complication not present in the last crisis: Stick with a virtual tour or mask up for a walkthrough?

Either way, more than 3,000 closed sales were logged last month in the Portland metro area, according to real estate data provider RMLS. The average price for a Portland-area home stood at $475,400 this year through July, 3.7 percent higher than the same timespan last year when there wasn’t a pandemic.


Industry Reaction: FHFA Postpones GSE Refinance Fee (The M Report, August 26)

The Federal Housing Finance Agency (FHFA) today directed GSEs Fannie Mae and Freddie Mac to delay the implementation date of their Adverse Market Refinance Fee until December 1. The fee initially was scheduled to take effect September 1.

FHFA also announced the GSEs will exempt refinance loans with loan balances below $125,000, nearly half of which are made up of lower income borrowers (at or below 80% of area median income).

Affordable refinance products, Home Ready and Home Possible, are also exempt.


Portland fixer-uppers: When there are few homes on the market, anything can sell at the right low price (Oregonian, August 23)

The most recent housing data shows that even during the coronavirus pandemic, a world-changing health and economic crisis, people continue to buy residential real estate, motivated by historically low mortgage interest rates in the 2.9% range.

The median sale price for a Portland metro home has risen 4.5% to $426,500 when comparing 2020 to 2019 through July, and inventory of homes for sale last month decreased to 1.2 months, offering the fewest choices for potential buyers in years, according to a report by the local listing service RMLS.


Portland home shoppers feel the pinch: Prices and fast sales rise while choices fall, except for condos (Oregonian, August 13)

Portland is a tale of two residential real estate markets: Well-priced, single-family homes are selling fast — sometimes a bidding war breaks out regardless of the location and condition — while sales of turnkey condominiums with concierge services and killer views have stalled due to the coronavirus pandemic, say real estate agents.

While it’s a seller’s market for single-family homes, low condo sales, which had been lagging before stay-at-home orders were issued in late March, have owners motivated to make a deal, says Sean Z. Becker of Portland-based Sean Z Becker Real Estate.


Sales of New-Construction Homes Rebound to Pre-Coronavirus Levels, Rising 10% in July (, August 25)

A surge in homebuilding before the pandemic is now driving growth in new-home sales. A shift to the suburbs and record-low mortgage rates are also contributing factors.


Fed changes its approach to inflation, as leaders aim to navigate future crises and reach full employment (Washington Post, August 27)

“This change may appear subtle, but it reflects our view that a robust job market can be sustained without causing an outbreak of inflation,” Fed Chair Jerome H. Powell said Thursday.

Federal Reserve Chair Jerome H. Powell on Thursday announced a major shift in the way the central bank aims to achieve maximum employment and stable prices, marking lessons learned from the most recent economic expansion.

The new approach signals that the Fed won’t hike interest rates to respond to low unemployment and also won’t worry as much about low rates triggering a rise in prices.


Thanks for reading.