Some areas of housing are actually doing better than they were before the coronavirus began sweeping the U.S.
The U.S. housing market, the epicenter of the nation’s last economic meltdown, is thriving — and that’s helping to keep the country afloat during the latest crisis, even as other industries struggle to survive.
While the $34 trillion market faltered at the start of the pandemic, its rebound has far outperformed expectations, with existing home sales surging over 20 percent in June, according to data released Wednesday.
The Center for American Progress (CAP) is calling on lawmakers to make homeownership and affordable rental housing more accessible to people of color. Citing specific historical instances of racial discrimination and segregation in the housing finance system, the center is calling on lawmakers to reverse the ongoing impacts of this discrimination and make the housing system more “equitable.”
Next year, rates are heading even lower, says Fannie Mae’s Duncan
Mortgage lending is set to reach $3.14 trillion this year, the highest since 2003, as the annual average rate for a 30-year fixed home loan falls to a record low of 3.2%, according to Doug Duncan, chief economist of Fannie Mae. Next year, rates are heading even lower, he said.
In 2021, the annual average rate probably will fall to 2.8%, said Duncan, who spoke to HousingWire via a video conference call on Monday in an exclusive interview. That would be the lowest ever recorded.
Duncan said his forecast is based on the open-ended commitment by the Federal Reserve to purchase $40 billion a month in mortgage-backed securities, coupled with the expectations that “margins” – meaning the difference in the yields for 10-year Treasury yield and mortgage bonds – will continue to shrink as the lending industry adjusts to doing business amid the COVID-19 pandemic.
Could Mortgage Rates Drop to 2.7%? Lending Tree’s Chief Economist Tendayi Kapfidze said he expects mortgage rates to fall further.
Kapfidze, during an appearance on the “Squawk Box,” said the spread between the 10-year Treasury and mortgage rates is growing, as it currently stands at 235 basis points. Prior to COVID-19 it was 170.
He added since the Federal Reserve announced unlimited buying in March, the market has seen a 30 basis points drop. He said an additional 65 basis points drop (2.3%) would be needed to get back to pre-pandemic numbers.
“But I think we’re going to easily get another 30 basis points over the next three to four months to take us to 2.7 [percent],” he said.
Average FICO scores are rising
According to Ellie Mae, the average FICO scores on all closed loans increased to 751 in June, up from 750 in May, while FICO scores increased month-over-month for both purchase and refinances across conventional, FHA and VA loans.
The one-two punch of heavy demand and tamped down inventory are translating into a market where homes are moving off the market as if they were on a slippery slope: they’re not sticking around long, according to the June Zillow Real Estate Market Report.
Housing supply declined more than 30% across the state
A city’s true colors show themselves in the darkest hours, and ours have been showing all over the place.
Even in the “best of times,” our Best of Portland issue has served as a brief respite from the chaos of the moment—the time each year when we pause even our own cynicism and remember what it was that drew us here and why we’ve never left. In that way, there might not be a better time for this issue to arrive than right now.
And, as it turns out, there is a lot to celebrate.
A city’s true colors show themselves in the darkest hours, and ours have been showing all over the place, whether it’s the artist designing protective bandannas for the houseless, the street magician giving socially distant performances outside apartment buildings, or the opera singer who brought a group of protesters to tears with a rendition of “Stand By Me.”
Thanks for reading, and be well.