Guardian Residential Lending Industry News, March 5-12, 2020

Guardian Residential Lending Industry News, February 27 – March 5, 2020
March 5, 2020
Guardian Residential Lending Industry News, March 19-26, 2020
March 27, 2020
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In the Know: A Roundup of This Week’s Local and National Real Estate Stories 

Coronavirus Looms Over Crucial Spring Season for Housing Market (WSJ, March 12)

Uncertainty has economists tamping down expectations that low mortgage rates, strong job market would boost 2020 home sales

The lowest mortgage rates on record are colliding with the prospect of an economic downturn prompted by the coronavirus outbreak, setting the stage for an unpredictable spring selling season in the housing market.

Early indications suggest that rock-bottom borrowing costs may not be enough to lure many home buyers amid the current uncertainty. Economists are tamping down earlier expectations that cheap rates and a strong job market would boost the housing market in 2020 following years of sluggish growth.

The National Association of Realtors had anticipated about 5.5 million sales of previously owned homes in 2020, up from 5.3 million a year in 2019 and 2018, said NAR chief economist Lawrence Yun.

“I thought that there would be a steady increase from January pretty much throughout most of the year,” Mr. Yun said. “Obviously, we hit a major speed bump” due to the epidemic.

The association said Monday it expected a 10% near-term drop in home sales in the next month, compared with the period before the virus became prominent. In a survey of its members about the coronavirus, the association said 11% of respondents reported lower home-buyer traffic and 7% reported lower home-seller traffic.

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Fed injecting $1.5 trillion into bond markets (WSJ, March 12)

The Federal Reserve took the highly unusual step of injecting more money into the bond market Thursday to ensure the financial system remains stable. The New York Fed will pump $1.5 trillion into the short-term lending markets that banks use to lend to each other on Thursday and Friday.

The Fed also announced it will buy $60 billion worth of Treasury bonds for the next month (March 13 through April 13) to help keep that market functioning appropriately.

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Mortgage Rates Rising (Mortgage News Daily, March 11)

Mortgage rates continued a relentless surge higher today.  The move began in earnest yesterday for two key reasons: bond market panic and mortgage market over-supply.

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Super-low interest rates disappear from mortgage comparison sites (HW, March 10)

Lenders appear to be increasing rates to deal with demand

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The Great Turnaround: How Much Have Prices Rebounded Since the Housing Bubble Burst? (Realtor.com, March 2)

…it seems like a good time to take a big step back to determine just what happened to the housing markets in America’s top cities in the aftermath of the worst real estate crash since the Depression. Because the silver lining to the previous housing bust were bargain-basement home prices—if you were able to scrape up the funds to become a buyer back then, of course. Those fortunate enough to weather the storm and purchase a home at the bottom of the market basically won the equivalent of the real estate jackpot.

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10-year Treasury yield hits new all-time low of 0.318% amid historic flight to bonds (CNBC, March 9)

The yield on the benchmark U.S. 10-year Treasury briefly touched an all-time low of 0.318% in overnight trading, adding another 30 basis points to an unprecedented fall in the key interest rate. That rate was above 1.5% as recently as mid-February.

The 10-year yield, in particular, holds outsized importance in the U.S. economy for its use as a benchmark for mortgage rates and auto loans.

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Average FICO score reaches record high, Experian says (HW, March 5)

Millennials show the biggest improvement in a strong labor market

The average U.S. FICO score hit a record high of 703 in 2019, driven by Americans in their 30s, as a strong labor market helped people to pay their bills on time.

The improvement was driven by Millennials getting their financial lives in order as the oldest members of the cohort approach the age of 40.

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How coronavirus is impacting the housing market (Curbed, March 6)

Stocks are tanking as the virus spreads. Will housing follow?

There are a few ways the virus could affect the housing market that you should be aware of—but before we get into the details, you can breathe a sigh of relief, because a housing catastrophe on the scale of the 2008 financial crisis is almost certainly not going to happen.

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Oregon Gained More Than 400,000 Residents in the Last Decade, a Portland State University Population Study Shows (Willamette Week – this is from November 2019)

Of Oregon cities, Portland continued to see the most growth.

Since 2010, more than 400,000 people have moved to the state. And between 2018 and 2019 alone, Oregon’s population grew by 41,100. That exceeds the number of people moving out of state, 35,000.

Portland continued to see the most growth of Oregon cities. The city’s population increased 1.3 percent between 2018 and 2019, with 8,360 moving to Portland. Oregon’s three most populous counties—Multnomah, Washington and Clackamas—accounted for almost half of the state’s growth last year.

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Just For Fun

Shel Silverstein’s Sausalito houseboat asks $783K (Curbed, March 9)

The late poet lived on a former World War II military boat

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Thanks for reading!