With Covid-19 still creating chaos, a vaccine on the horizon and a new president taking office in 2021, many Americans are likely full of questions about the housing market. Despite all that’s going on in the country and the world, it is very unlikely that the market plummets in 2020 or 2021. It actually remains a significant, supportive part in the recovery process of America’s economy.
A survey was recently released by The Federal Reserve Bank of New York's Center for Microeconomic Data the September 2020, Survey of Consumer Expectations, which indicates there is improvement in the labor market, more optimistic views about their own fiscal conditions for the upcoming year.
The rapidity of existing-home deals has climbed to a level unheard of since 2006 and was trailed by robust pending sales, purchase mortgage applications and construction data. The Federal Reserve has indicated it has no intent to raise interest rates in the immediate future, which has led many households jump on the opportunity to refinance their current loans.
Additionally, history shows that low-interest rates are an incentive to buy homes, but the inability to produce new construction based on demand remains the cause of high points of home price appreciation, which has offset some of the benefits of the lower rates.
The Fannie Mae Home Purchase Sentiment Index® grew 0.7 points in October to 81.7, increasing for the third month in a row, extending the recovery from springtime. Although the HPSI is down 10.5 points for the year, it has gained back more than half of the initial pandemic-period drop, reflecting the solid home acquisition activity of the last few months.
Three of the six parts of the HPSI improved from the previous month. Buyers reported a more hopeful view of home-selling conditions, anticipated home price growth and the labor market, but a more pessimistic opinion of home-buying conditions and mortgage rate outlooks.
Despite drops in activity for four weeks, home-buying loan applications remain near their peak level over the last 12 years and exceed last year’s levels by 24%. On October 31, the number of homes on the market was 37.4% less than there were in the same week last year, according to Zillow Economic Research.
Mortgage delinquencies are on the decline, but improvement has slowed. The amount of outstanding mortgages currently shows 6.88% at least 30 days behind on payments in August, which is down a negligible .03% from July, according to Black Knight.
In its survey of 11.4 millions units, The National Multifamily Housing Council reported 94.6% of rent was partially paid or paid in full in apartment homes by October 27. This amounted to a 1.2%, or 141,583 household dip from October 2019. Although these numbers are down slightly, they are not a sign of a much larger drop.
Overall, the housing market continues to perform well despite a pandemic that has disrupted much of the U.S. economy over the last eight months. As mentioned before, it is one of the few positive constants.
Source
https://www.newyorkfed.org/microeconomics/sce
https://www.noradarealestate.com/blog/housing-market-predictions
https://www.zillow.com/research/zillow-weekly-market-report-27151/
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