Guardian Residential Lending Industry News, May 14-21, 2020

Guardian Residential Lending Industry News, May 7-14, 2020
May 14, 2020
Guardian Residential Lending Industry News, May 21-28, 2020
May 28, 2020
Show all

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

Mortgage refinances; forbearance and the latest on home listings and prices…

Weekly mortgage applications point to a remarkable recovery in homebuying (CNBC, May 20)

If mortgage demand is an indicator, buyers are coming back to the housing market far faster than anticipated, despite coronavirus shutdowns and job losses.

Mortgage applications to purchase a home rose 6% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Purchase volume was just 1.5% lower than a year ago, a rather stunning recovery from just six weeks ago, when purchase volume was down 35% annually.



Mortgage refinancings set to surge to a 17-year high (HW, May 18)

Lenders probably will originate $1.5 trillion in refis, a 51% jump from 2019, Fannie Mae says

If you’re in the mortgage business, fasten your seatbelts. Refinance volume is set to spike to a 17-year high this year as mortgage rates fall to the lowest levels ever recorded, Fannie Mae said.

Even as other parts of the economy tank, lenders will originate $1.5 trillion in refis in 2020, a 51% jump from 2019, according to the forecast. That would be the highest level since 2003 when $2.5 trillion of mortgages were refinanced, according to data from the Mortgage Bankers Association.

The lowest interest rates on record will bolster refis after the Federal Reserve began buying mortgage-backed securities to stimulate bond demand and grease the wheels of the credit markets. The average U.S. rate for a 30-year fixed mortgage fell to an all-time low of 3.23% at the end of April, according to Freddie Mac.

It’s probably heading even lower, according to the Fannie Mae forecast. The average rate probably will be 3.2% in the second quarter, down from 3.5% in the first quarter, and drop for the rest of the year.


Fannie Mae, Freddie Mac will allow borrowers who took forbearance to refinance their mortgage (HW, May 19)

The Federal Housing Finance Agency announced Tuesday morning that Fannie Mae and Freddie Mac will now allow borrowers who went into COVID-19 forbearance to refinance their loan or buy a new home with the support of the GSEs as long as they’ve made three straight months of payments after their forbearance ends.



8.8% of U.S. mortgages are in forbearance (HW, May 15)

Pace of new forbearances slows to 27,000 a day, down 85% from April


Vast Majority of Forbearances Going to Those Who Don’t Need Them (Mortgage News Daily, May 20)

With the number of homeowners under forbearance plans nearing 10 percent of all of those having a mortgage, a Lending Tree survey indicates that most of those borrowers did not actually need the help. One quarter of the homeowners surveyed by the company said they had applied for forbearance because of a COVID-19 hardship, and of those, 80 percent were granted one. However, only 5 percent said they wouldn’t have been able to pay their mortgage without forbearance.



Powell cites Fed’s mortgage intervention as a success (HW, May 19)

“Market conditions have improved substantially,” Fed Chairman tells Congress

Federal Reserve Chairman Jerome Powell gave a bleak assessment of the U.S. economy as he testified remotely to the Senate Banking Committee on Tuesday. The only bright spot he mentioned was the mortgage market.

Powell reiterated the central bank’s plan to slow its purchases of agency mortgage-backed securities because of an easing of credit conditions. The Fed has bought more than half a trillion dollars of MBS since mid-March, helping to drive interest rates for home loans to the lowest ever recorded in April’s final week.



New Portland-area home listings drop 32%, but prices rise (Portland Business Journal, May 13)

“It is a totally different world out there trying to show homes,” said one broker.

Residential listings were harder to spot in the Portland metro area in April, but heftier prices weren’t.

New listings in April plummeted more than 32 percent year-over-year as the average sale price topped $465,000 from the start of the year through April, according to residential real estate data released by the Regional Multiple Listing Service.


Nationally, Home sales dropped nearly 18% in April, while decline in inventory pushed prices to a record high (CNBC, May 21)

-Sales of existing homes fell 17.8% month to month, and were 17.2% lower than April 2019, seasonally adjusted, according to the National Association of Realtors.

-The April drop in closings is the largest one-month decline since July 2010, when the homebuyer tax credit, a federal stimulus resulting from the subprime mortgage crash, expired.

-The supply of homes for sale fell 19.7% annually to 1.47 million units for sale at the end of April. That is the lowest April inventory figure ever. That drop in inventory pushed prices to a record high.


Portland homes for sale on really small lots have low property taxes (Oregonian, May 16)

Small residential lots have advantages. There is less to maintain and yet there is space around the home to offer a little greenery and privacy.

Property taxes, which are based on value and location, are generally low and since most single family houses of any size don’t share common areas, typically there are no homeowners association fees.


Just for Fun

Stoller: Oregon winery delivers Covid-19 rules with song, dance


Thanks for reading, and be well.