April Pending Home Sales: Largest Drop This Century

By Jim Perskie Stay-at-home orders, curtailed real estate activities and an economic shutdown sent pending home sales into the dumps in April, according to a new report released Thursday by the National Association of Realtors. The Pending Home Sales Index dropped 21.8 percent from March – and was 33.8 percent lower than April 2019, the largest decline since NAR began tracking pending sales in 2001. Every major region experienced a drop in month-over-month contract activity and a decline in year-over-year pending home sales. “With nearly all states under stay-at-home orders in April, it is no surprise to see the markedly reduced activity in signing contracts for home purchases,” said Lawrence Yun, NAR’s chief economist. Here is how each region fared:…

Airbnb, Vrbo Booming In Beach Communities

By Jim Perskie The short-term rental market is bouncing back quickly, with travelers taking advantage of lockdowns ending just as the summer tourism season starts across the country, according to a report released Wednesday by AirDNA. There was a 202 percent increase in rental bookings on Airbnb and Vrbo in the United States between April 5 and May 18. “After weathering a flood of cancellations and scrambling to market themselves as immaculate, virus-free stays, it seems like the suffering may be somewhat short-lived,” AirDNA concludes in the report. The report also found, “After the multi-month lockdown brought global travel to a standstill, it now seems that — whether or not we’re ready — the road to economic recovery is clearly taking shape.…

Share Of Mortgages In Forbearance Leveling Off

By Jim Perskie The number of mortgages in forbearance in the United States increased slightly in the latest report, but the rate of increase continues to level off as fewer homeowners are opting to push pause on their loan payments during the coronavirus pandemic. The latest Mortgage Bankers Association report released Tuesday found that 8.36 percent of U.S. mortgages were in forbearance as of May 17 – up 0.20 points from 8.16 percent a week earlier. By contrast, the percentage increased by 1 to 2 percentage points during some weeks in April. “Although job losses continue at extremely high rates, mortgage servicers are reporting only modest increases in the share of loans in forbearance as of May 17,” said Mike…

Home Purchase Mortgage Applications Rise Again

By Jim Perskie Applications for mortgages for home purchases increased for the fifth straight week as the housing market continues to make tentative steps forward amid the coronavirus pandemic, the Mortgage Bankers Association announced Wednesday. MBA’s Weekly Mortgage Applications Survey showed that the Purchase Index for the week ending May 15 increased 6 percent over a week earlier, though it was slightly lower than a year ago. “Applications for home purchases continue to recover from April’s sizeable drop and have now increased for five consecutive weeks. Purchase activity – which was 35 percent below year-ago levels six weeks ago – increased across all loan types and was only 1.5 percent lower than last year,” said Joel Kan, MBA’s Associate Vice…

GSE Borrowers In Forbearance Can Buy, Refi – Eventually

By Jim Perskie Borrowers are eligible to refinance or buy a new home three months after their forbearance ends and they have made three straight payments under their repayment plan, according to new temporary guidance issued Tuesday by Fannie Mae and Freddie Mac. The guidance, announced by the Federal Housing Finance Agency, clarifies how lenders should handle loans for borrowers who are in forbearance but are looking to refinance or buy a new home with federally backed mortgages. “Homeowners who are in COVID-19 forbearance but continue to make their mortgage payment will not be penalized,” said Director Mark Calabria. “Today’s action allows homeowners to access record low mortgage rates and keeps the mortgage market functioning as efficiently as possible.” The $2…

Housing Starts Wayyyyyy Down In April

By Jim Perskie Another day, another housing report battered by the economic shutdown driven by the coronavirus pandemic. Residential housing starts in the United States in April dropped 30.2 percent from March and were 29.7 percent below April 19, according to a report released Tuesday by the Census Bureau and the Department of Housing and Urban Development. Single-family housing starts were 25.4 percent below March. Privately-owned housing starts in April were at a seasonally adjusted rate of 891,000, significantly below the 1.28 million in March. “This drop in new home construction is not surprising since most states were under stay-at-home orders in April, which included home builders,” said Bill Banfield, vice president of Capital Markets at Quicken Loans. “While it…

Signs Of Life In Housing Market

By Jim Perskie A pair of housing reports released Tuesday provided fresh insight into the strength of the housing market early in the year – and how the sector is slowly starting to rebound from the challenges created by the coronavirus pandemic. The National Association of Realtors reported that 96 percent of the nation’s metro areas experienced price increases in the first quarter, with 174 of 181 markets showing price gains from the same period in 2019. At the same time, Zillow said more houses are coming on to the market in recent weeks after bottoming out last month – though remain far below the 2019 levels. “The first quarter price jumps mostly reflect conditions prior to the coronavirus outbreak…

Credit Tightens Further As Rates At Record Lows

By Jim Perskie Economic difficulties caused by the coronavirus are making it harder for borrowers to obtain mortgage credit, even as interest rates have plunged to historic lows. The Mortgage Bankers Association announced Thursday that the Mortgage Credit Availability Index (MCAI) dropped 12.2 percent in April, reflecting a tightening of the lending standards in the market. “The abrupt weakening of the economy and job market – and the uncertainty in the outlook – drove credit availability down in April for the second consecutive month,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The overall index fell to its lowest level since December 2014, and the sub-indexes pointed to tightened credit supply for all loan types. The…

Freddie CEO: Greatest Housing Challenge In Decade

By Jim Perskie Freddie Mac CEO David Brickman said Thursday the housing market is “facing its greatest challenge in more than a decade” and that the impact of the coronavirus will be felt over the next year, at least. Brickman expected home sales – and perhaps home prices – to fall significantly in the second quarter before beginning to recover. “While home prices increased in the first quarter, the future effect of the COVID-19 pandemic is highly uncertain and dependent on the pace of economic recovery,” he said in discussing Freddie Mac’s first quarter financial results. “The decline in home prices could be significant if forbearance and foreclosure mitigation do not limit the effect on home prices.” The Labor Department…

Existing Home Sales Fall In March

By Jim Perskie Existing home sales fell in March amid the coronavirus outbreak, though overall sales were up slightly from a year ago, the National Association of Realtors announced Tuesday. “Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” NAR chief economist Lawrence Yun said. “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.” Total existing home sales dropped 8.5 percent from February, while climbing 0.8 percent from March 2019. Each of the four regions of the country suffered a decrease in sales from a month earlier, the report found. Northeast: Existing-home sales in the Northeast fell 7.1 percent for the month and…