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This Week In Real Estate – August 2, 2020

This Week In Real Estate

Home Sales & Mortgage Lending Surge.

The Mortgage Bankers Association reported, this week in real estate, that they expect the volume of home-financing will reach its highest level since 2006. As the summer selling season begins in earnest the Housing Market Recovery Index is just 8.0 points below the pre-COVID baseline (the West region is within 0.4 points of that baseline). Below are a few newsworthy events from the fourth week of June that influence our business:

Pace of Home Sales Improving Rapidly, But COVID-19 Containment Key to Recovery.

Nationally, the real estate market continues to warm up as economies reopen and more buyers return to the streets, but uncertainty remains as COVID-19 concerns linger. The Housing Market Recovery Index reached 92.0 nationwide for the week ending June 20, the highest index value since the middle of March when COVID-19 disruptions began. This week’s move represents a 2.0 point increase over the prior week, and the largest weekly jump in four weeks, taking the index just 8.0 points below the pre-COVID baseline. The overall index is set to 100 for the last week of January based on average year-over-year trends that month and updated every week relative to that baseline. A value of 100 means the market has recovered to January 2020 pace. The higher the index value, the higher the level of recovery. The lower the index value, the lower the level of recovery. As the summer homebuying season ramps up, the ‘pace of sales’ is now the fastest improving component, but remains below the full recovery baseline. The ‘new supply’ component is also on the path to recovery, while the ‘housing demand’ and ‘home prices’ components remain well above the January benchmark. Regionally, the West (99.6) continues to lead the recovery with the overall index now virtually at the January benchmark. The South (93.9), which led the early recovery, continues to recover but at a slower pace than other regions as we head into the summer. This week, both the Northeast and Midwest (94.5 and 93.6), which experienced the biggest dips post-COVID, have fully caught up to the South. The Northeast, in particular, has experienced a rapid shift in conditions, with the overall index now nearly 30.0 points above its end of April trough. The overall recovery index is showing the greatest recovery in Seattle, Denver, Boston, Jacksonville, and Philadelphia, with growth in demand, supply, and the pace of sales surpassing pre-COVID benchmarks. Full Story…

Mortgage Lending Will Surge to a 14-Year High This Year, MBA 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 refinancing 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 refinances, he said. About $1.3 trillion will be to finance home purchases and $1.35 trillion likely will be refinancing, Fratantoni said on Monday. When the pandemic first hit, purchase applications dropped as low as 35% below the year-ago level, he said. When the real estate market reopened, Fratanoni said demand began to rebound at a pace that far surpassed his expectations. Currently, applications for mortgages to purchase homes are running about 20% ahead of last year, he said. Full Story…

New Home Sales Jump in May.

New home sales jumped in May, as housing demand was supported by low interest rates, a renewed household focus on housing, and rising demand in lower-density markets. Census and HUD estimated new home sales in May at a 676,000 seasonally adjusted annual pace, a 17% gain over April. The gains for new home sales are consistent with the NAHB forecast that housing will be a leading sector in an emerging economic recovery. Consider that despite double-digit unemployment, new home sales are estimated to be 1.9% higher through May than the first five months of 2019. Sales were likely supported by price incentive use in April, with NAHB data indicating that two out of ten builders used such business strategies. However, such use eased in May, as median new home pricing increased to $317,900, an almost 2% gain year-over-year. Full Story…

Originally compiled & posted by Jason Waugh on the Berkshire Hathaway HomeServices Northwest Real Estate company blog.


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Mitch Darby

I am a real estate broker, architect (both licensed in the State of Oregon), and life-long Oregonian. If you are looking to buy or sell, I can help! I have Northwest Knowledge and am proud to be associated with Berkshire Hathaway HomeServices - Real Estate's Forever Brand!

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