Mortgage Applications Are Up 28% From 2019.
As we transition from summer to fall, the demand for housing continues to fuel the economy as evidenced by the Mortgage Bankers Association’s release, this week in real estate, that mortgage applications are 28% higher than last year. For the first time since March, the unemployment rate returns to single digits. Below are a few newsworthy events from the first week of September that influence our business:
Annual Home Price Growth Accelerated to its Fastest Rate in Nearly Two Years.
National home prices increased 5.5% year over year in July 2020, according to the latest CoreLogic Home Price Index (HPI) Report. The July 2020 HPI gain was up from the July 2019 gain of 3.4% and was the highest year-over-year gain since August 2018. Strong demand, low mortgage interest rates and low supply of for-sale homes helped push home prices higher in July. CoreLogic analyzes four individual home-price tiers that are calculated relative to the median national home sale price. The four price tiers are based on the median sale price and are as follows: homes priced at 75% or less of the median (low price), homes priced between 75% and 100% of the median (low-to-middle price), homes priced between 100% and 125% of the median (middle-to-moderate price) and homes priced greater than 125% of the median (high price). Home price growth has accelerated for all four price tiers this year, with the lowest price tier showing the highest annual increase as it has since 2013. The lowest price tier increased 7.6% year over year in July 2020, compared with 6.6% for the low- to middle-price tier, 5.9% for the middle- to moderate-price tier, and 5% for the high-price tier. Full Story…
Mortgage Demand From Homebuyers is Now 28% Higher Than Last Year.
The annual gains are getting a big boost from homebuyers. Mortgage applications to purchase a home fell 0.2% for the week but was 28% higher than a year earlier. Last year, annual gains were in the low single digits for purchase demand. “Lenders are reporting that the strong demand for home buying is coming from delayed activity from the spring, as well as households seeking more space in less densely populated areas,” said Joel Kan, an MBA economist. Applications to refinance a home loan decreased 3% for the week, although they were 40% higher than a year ago. Earlier this year, refinancing had been around 100% higher annually. “Mortgage rates have remained below 3.5% for five months now, and it’s possible that refinance demand may be slowing and will not significantly increase again without another notable drop in rates.” Full Story…
1.4 Million Jobs Added in August.
In August, total payroll employment rose by 1.4 million and the unemployment rate fell to 8.4%. Residential construction employment rose by 27,700 in August to 2.9 million. Total construction industry (both residential and non-residential) employment rebounded to 7.2 million in August. After the economy lost 22.1 million jobs in March and April due to the impact of the COVID-19 pandemic and efforts to contain it, about 10.6 million jobs have been created in the past four months. The unemployment rate declined by 1.8 percentage points to 8.4% in August. In August, the number of employed persons increased by about 3.8 million, while the number of unemployed persons declined by 2.8 million to 13.6 million. The labor force participation rate, the proportion of the population either looking for a job or already with a job, rose by 0.3 percentage point to 61.7% in August. Full Story…
Originally compiled & posted by Jason Waugh on the Berkshire Hathaway HomeServices Northwest Real Estate company blog.
