Why aren’t the prices of homes dropping like last recession? Lack of supply, government protection from foreclosure, the recessions is disproportionately impacting low wage earners, and huge demand from Millennials,
“In November of 2007… more than 4 million new and existing homes for sale. In December of 2019…. less than 2 million homes for sale.”
Sarah Gonzalez – Planet Money
Rates moved marginally higher this week but have remained within their 2-month trading window.
Jobs – nearly 2M people filed for unemployment for the first time time last week, which is roughly 10X pre-covid levels. Fortunately this index is trending down but it is still at an alarming number considering the highest number in the previous recession was only 600,000. The May jobs report showed 2.5M in job gains which was a surprising figure as the market was predicting 7.7M in job losses. The unemployment figure decreased from 14.7% to 13.3%
Home Values rose 1.4% from March to April and are up over 5% from this time last year. For the first time in 9 years Core Logic is now forecasting a slight decline in values over the next 12 months.
Applications – Purchase applications are now up 18% from this time last year (after being down 35% in April). Overall volume is down 4% from the previous week but much of that is refinance.
Forbearance – the Mortgage Bankers Association reports the % of loans in forbearance increased over the past week from 8.36% to 8.46% as 4.2M homeowners are now in forbearance.