Guardian Residential Lending Industry News, March 11-18, 2021

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

Insane Lumber Prices, Refi-Demand and Women’s Homeownership

The Pandemic Ignited a Housing Boom—but It’s Different From the Last One (WSJ, March 15)

Residential home sales are hitting peaks last seen in 2006, just before the bubble burst, but this time mortgages are stricter, down payments are higher, and a tight supply is supporting prices


Consumer Confidence Grows in Home-Shopping Tech Tools (M Report, March 15)

…a new Zillow survey has found that a majority of millennials (59%) said they would be at least somewhat confident making an offer on a home they toured virtually, while 39% would be comfortable buying a home online.

The analysis by Zillow also found that tech-savvy millennials are not only driving the home shopping trend, but overwhelmingly want more digital tools available during the home shopping process.


Progress, Problems When It Comes to Women’s Homeownership (M Report, March 15)

Single women homeownership is outpacing the overall homeownership rate of growth.

“According to our analysis of anonymized household-level survey data, following an overall decline in the homeownership rate among single women in the aftermath of the Great Recession to a low point of 49% in 2016, the homeownership rate among single women has rebounded significantly to just over 52% in 2020. The rebound for single women homeownership has outpaced the overall homeownership rate of growth over the same time period.”

There are reports out there that indicate problems remain for women home shoppers and sellers.

According to Credello, “a closer look at the data shows that women ultimately purchase homes at higher prices and sell them at lower costs than men.”

One recent study from Yale shows that single women purchase homes for 2% more than single men, Credello cites in a recent article. “When mortgages are taken into account, assuming 20% down and 80% financed, this increases to about 7%.  They then sell their homes for 2% less.”


What a Year of COVID-19 Has Meant to Portland Residential Real Estate: A 15% Jump in Prices (Willamette Week, March 12)

February numbers show a continued low inventory of homes for sale, and homes on the market don’t last long.

“Comparing 2021 to 2020 through February, the average sale price has increased 14.8% from $460,200 to $528,500,” the RMLS report says. “In the same comparison, the median sale price has increased 15.3% from $407,500 to $470,000.”


Why Portland-area home sales of $1M or more surged last year (Portland Business Journal, March 15)

While the number of local homes selling for $1 million or more has gently risen for years, those sales took a running jump in 2020. The 436 of them logged in that price range represented a 42% increase from the prior year, when 306 sold, according to data from the Regional Multiple Listing Service.


Insane lumber prices mean new homes cost $24K more (HW, March 16)

Homebuilders’ problem isn’t demand – it’s finding materials at a reasonable price


Refi Demand Falls to Six-Month Low (Mortgage News Daily, March 17)

Mortgage application volume declined again during the week ended March 12, as refinancing deflated in the face of rising interest rates.

The Refinance Index was…39 percent lower than the same week one year ago.

Purchase applications were 2 percent higher than the week ended March 5 on an unadjusted basis and up 3 percent before adjustment. Those applications were up 5 percent from the same week in 2020. They have been higher year-over-year every week since the year began.


Powell Can’t Let Markets See Him Sweat (WSJ, March 18)

Keeping low-rate path, Fed chairman appears determined not to signal premature confidence

Headed into Wednesday’s Federal Reserve meeting, investors wondered if a brightening outlook would force an earlier increase in interest rates. Officials didn’t blink: Their forecasts showed rates wouldn’t lift off from near zero before 2024, unchanged from December.

Superficially, this is surprising. Since December, vaccines have rolled out more quickly than planned and Congress has enacted trillions of dollars of new fiscal stimulus. Officials dutifully upgraded their projections of economic growth, employment and inflation. So why no change in the path of interest rates?

The reason is that those rate projections, which appear as dots on charts of the Fed’s quarterly projections, aren’t just a forecast but a signaling device. Right now, the Fed is determined not to signal premature confidence.

The economy stands at an unusual inflection point. Based on vaccines, stimulus and pent-up demand, there is every reason to believe growth this year could be the best in decades. That is clearly what investors now assume, judging by rising stock prices and bond yields.

And yet precious little data on hand actually substantiates this: Vaccinations have yet to turn the tide of the pandemic, and despite one strong jobs report, employment is still more than nine million short of its pre-pandemic level.

There is no upside to the Fed revising its rate forecast now and lots of downside. It could fuel suspicions among bond investors that it doesn’t intend to stick to its plan of keeping rates near zero until inflation is clearly headed above 2% and full employment has returned. Such suspicions could push market rates higher and make the boom less likely and the Fed’s job harder.


Thanks for reading.