Guardian Residential Lending Industry News, July 30 – August 6, 2020

Guardian Residential Lending Industry News, July 23-30, 2020
July 30, 2020
Guardian Residential Lending Industry News, August 6-13, 2020
August 13, 2020
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In the Know: A Roundup of This Week’s Local and National Real Estate Stories

Mortgage rates tumble to new record lows this week (HW, August 6)

All-time lows: The average U.S. rate for a 30-year fixed mortgage is 2.88% this week and the average 15-year rate is 2.44%

Low mortgage rates help to support real estate demand by making it possible for more buyers to qualify for loans. This is because cheaper financing lowers monthly mortgage bills, which are compared to income to qualify applicants. Low rates also support price growth because buyers typically qualify for bigger mortgages.


Driven by low inventory, median U.S. home price reaches record high in July (HW, August 4)

California sees 50% drop in listings over last year

The national average median home price reached a new high in July due to low inventory and pent-up demand.

According to‘s Housing Recovery Index, the new median price is $349,000, with listing price growth increasing $27,000 or 8.5% year over year.


Record Numbers of Homebuyers Making Sight-Unseen Offers (The M Report, August 2)

According to a recent Redfin survey report, almost half of American homebuyers have placed official bids on houses without first seeing the properties in-person. With housing supply remaining tight and demand intensifying by the day, the competition in the housing market is really heating up,


Improving Black Homebuyers’ Access to Capital (The M Report, August 3)

According to new research from Urban Institute, when buying a home, people of color rely largely on black-owned banks for financingAs these banks, which are especially vulnerable during economic recession, struggle to continue lending, black borrowers face a lack of access to capital.  

Citing the institute’s recent study on the benefits and limits of black-owned banks, Neal suggested a two-fold solution that includes both increasing capital to black-owned banks and promoting public policies that more broadly support community development financial institutions (CDFIs).  

The typical black-owned bank originated between 75–100% of mortgages for black borrowers between 2004 and 2018, averaging 1260 purchase loans annually. Other types of lenders reportedly never exceeded 10% over the same period.  


Fed inflation plan could end rock-bottom mortgage rates (HW, August 5)

The results of the inflation-targeting assessment will be announced “in the near future,” Powell says

The Federal Reserve is considering abandoning its longtime strategy of using its benchmark rate to pre-emptively prevent inflation from rising above its 2% target. That could be the death knell for rock-bottom mortgage rates.

Fed Chairman Jerome Powell said at a news conference last week that the central bank was close to wrapping up a review of its policy-making strategy that began in 2019. The results will be announced “in the near future,” Powell said.

If the Fed allows inflation to rise above its current 2% target, it would put upward pressure on mortgage rates because investors who buy fixed assets use inflation as the mainstay of their calculation that determines the yield, or return, they are willing to accept.


Mortgage and real estate trends to watch for in the rest of 2020 (MarketWatch, July 28)

Rates will probably go even lower, but don’t expect to find many homes on the market


Thanks for reading.