5 ways to close the gap in homeownership rates between white and Black American homeowners
The National Association of Realtors laid out a five-point plan for how the real estate industry can step up to provide support in increasing the number of Black American homeowners.
While the homeownership rate for Black households has slightly improved and now sits at 44%, compared with an overall U.S. rate of 65.3%, it was only a year ago that it fell to 40.6%, which not only was the lowest level in the Census Bureau’s quarterly data going back to 1994 but was also the smallest share recorded for Black households since the 1950 decennial Census when it was 34.5%.
Volume rises to the highest level since February as states ease lockdowns
Three months into the COVID-19 epidemic, buying and selling a house looks far different than it once did. Instead of open houses, shoppers schedule private visits. Everyone wears a mask. But despite the economic pain that many people are experiencing, real estate experts don’t expect a crash like the Portland area saw in 2008. Instead, they say, home values are rising, and housing construction is still happening.
Low rates should push lending to $2.65 trillion in 2020, Fratantoni says
If you’re in the mortgage business, expect to have your busiest year in 2020 since the height of the housing bubble in 2006.
Combined lending for home purchases and mortgage refinancings probably will total $2.65 trillion this year, the most since the $2.74 trillion seen 14 years ago, as low rates spur demand, according to Michael Fratantoni, chief economist of the Mortgage Bankers Association.
The home-financing volume will be almost evenly split between purchases and refis, he said. About $1.3 trillion will be to finance home purchases and $1.35 trillion likely will be refinancings, Fratantoni said on Monday, speaking on a video conference sponsored by Moody’s.
Despite sending unemployment skyrocketing, the COVID-19 pandemic is likely to have little impact on home prices this year, according to a Reuters poll conducted in June. Home prices are expected to outperform consumer prices with a 3.0% increase this year, according to the poll.
Mortgage rates moved modestly lower today, but face an uphill battle in general. They fell very quickly as coronavirus first hit financial markets. They hit multiple new all-time lows in since March 9th and continued setting new records as recently as last week for some lenders. In fact, there are a few lenders that are offering their best rates ever TODAY. The catch is that these rates are very similar to those seen yesterday and the day before (and so on and so on). Markets are waiting to see if we can prevent a massive 2nd wave of coronavirus cases while still reopening the economy. To whatever extent that’s possible, rates should begin to see gradual upward pressure.
There’s another important catch, and it’s one we’ve talked about quite a bit in the past few months. At the very same lenders who are offering their lowest rates ever today, many borrowers will see absolutely nothing of the sort. In other words, the lender will quote record low rates on some scenarios but not on others.
Perhaps even more important than today’s rates versus the past range is the fact that, for those “other scenarios,” much of the news about mortgage rate improvements will not apply. They may see articles (like this one!) talking about rates being lower than at some other point in the recent past, while their own rate quote fails to improve.
This is a reasonably common phenomenon at times when rates are adjusting to a new normal. In large part, it has to do with the changes in investor preferences for certain types of mortgage investments.
Thanks for reading, and be well.