Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 3.33 percent, unchanged from last week.
“While mortgage rates remained flat over the last week, there is room for rates to move down,” said Sam Khater, Freddie Mac’s Chief Economist. “This year the 10-year Treasury market has declined by over a full percentage point, yet mortgage rates have only declined by one-third of a point. As financial markets continue to heal, we expect mortgage rates will drift lower in the second half of 2020.”
News Facts
30-year fixed-rate mortgage averaged 3.33 percent with an average 0.7 point for the week ending April 9, 2020, unchanged from last week. A year ago at this time, the 30-year FRM averaged 4.12 percent.
15-year fixed-rate mortgage averaged 2.77 percent with an average 0.6 point, down from last week when it averaged 2.82 percent. A year ago at this time, the 15-year FRM averaged 3.60 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.
The second week of NAHB’s online poll showed that several of the coronavirus’s impacts on the residential construction industry have become more widespread and severe. Once again, traffic ranked as the most widespread problem, with 93 percent of respondents saying the coronavirus has had an adverse impact on traffic of prospective buyers.
This result is based on 318 responses collected online between March 24 and March 30. As in week 1, the largest share of responses came from single-family home builders; and respondents were most often owner, president or CEO of their companies. The geographic distribution was somewhat different in week 2, however, with a greater share of responses coming from the Northeast and West Census regions.
The week 2 poll listed eight possible impacts of the coronavirus and asked if each has so far had a major, minor, or no adverse effect on respondents’ businesses. After traffic, 89 percent of respondents for whom the item was applicable said the virus was having a noticeable, adverse impact on homeowners’ concerns about interacting with remodeling crews, followed by the rate at which inquiries for remodeling work are coming in (86 percent), cancellations or delays of existing remodeling projects (82 percent), how long it takes to obtain a plan review for a typical single-family home (80 percent), and how long it takes the local building department to respond to a request for an inspection (78 percent). The least common problems on the list were supply of building products and materials and willingness of workers and subs to report to a construction site, but even these were cited as a virus-induced problem by over three-fifths of the respondents.
Five of these problems were also covered in week 1 of the poll. Four clearly worsened in week 2. For example, the 80 percent of respondents who said the virus has had an adverse impact on how long it takes to obtain a plan review for a single-family home was up from 57 percent a week earlier. Comparisons across weeks should be interpreted cautiously, due primarily to differences in the geographic distribution of responses. In this case, however, the percentage increased significantly in each of the four Census regions.
Similarly, the 78 percent who said the virus has had an adverse impact on how long it takes the local building department to respond to a request for an inspection was up from 50 percent a week earlier. Again, the increase was present and significant in each of the four regions.
As mentioned above, problems with willingness of workers and subs to report to a construction site were less widespread than the other items on the list, but the 64 percent who cited it as a virus-induced problem in week 2 was nevertheless up from 42 percent a week earlier. Again, the rising trend was consistent across regions.
Even a decline in the traffic of prospective buyers, the most widespread problem in week 1 of the poll, was more widespread in week 2. The incidence of the problem increased in every region except the Northeast. The Northeast, however, showed a marked increase (from 57 to 73 percent) in the share reporting that the virus had a major, rather than minor, adverse impact on traffic.
The trend was not completely consistent across regions for the fifth item present in both weeks of the poll: supply of building products and materials. Although the overall share reporting this as a virus-induced problem was up, this was primarily due to a particularly strong increase (from 45 to 74 percent) in the Midwest. For additional details—including tables for each question broken down by respondents’ region, primary business, and position in the company—please see the full survey report.
As COVID-19 (or the coronavirus) spreads and Americans prepare for potential quarantines, public health officials have recommended some advice for U.S. households: Namely, stock up two weeks of supplies, avoid crowds, and stay in your homes.
And that advice is fine for middle-class suburbanites with white-collar jobs. Sure, hop in the SUV and drive to the nearest Costco. Stash extra cases of canned beans in the pantry and frozen veggies in the basement freezer. Kids can hang out in their separate bedrooms or play in the backyard while parents conduct conference calls from the home office.
Of course, for people who lack these residential resources—especially those with unstable, crowded, or poor-quality housing—this situation is impossible. Not to mention the fact that workers in fields such as food service, retail, and hospitality can’t conduct their work remotely. In the face of a global pandemic, what are these Americans supposed to do?
Workers in fields such as food service, retail, and hospitality can’t conduct their work remotely. In the face of a global pandemic, what are these Americans supposed to do?
“SHELTERING AT HOME” REQUIRES GOOD HOUSING
The people who will have trouble “sheltering at home” are already among the most vulnerable populations. Estimating how many people will be affected is tricky, because these are also the most difficult populations for the Census Bureau to count. But we can predict which types of housing situations will create the greatest barriers.
Homeless persons. More than 500,000 people across the U.S. are homeless, roughly 40% of whom are unsheltered (living on streets, parks, and other open spaces). The remaining 60% live in temporary homes, including cars, shelters, or doubled-up with family. In a recent Curbed piece, Alissa Walker described the many challenges that homeless individuals face in trying to protect themselves from COVID-19, including hand-washing and storing food, which are critical obstacles.
Unaffordable or unstable housing. The poorest 20% of U.S. households spend more than half their monthly income on rent. Any loss of income—say, food service workers having their hours reduced as fewer people patronize restaurants—will put these households behind on their rent, increasing their risk of becoming homeless.
Group quarters. Some of the first U.S. fatalities from COVID-19 occurred in a nursing home outside Seattle. Contagious diseases spread rapidly in these types of group quarters, with residents living in close contact, sharing bathrooms, and eating together. Nearly 4 million Americans live in institutional group quarters such as nursing homes and correctional facilities. Another 4 million live in noninstitutional facilities, including college dorms, military barracks, and group foster homes. While colleges and universities can close dorms to prevent the spread of the coronavirus, that’s not an option for nursing homes or prisons.
Overcrowded households. Keeping the recommended 6-foot distance between people is tough for households with too many people crammed into too small of a space. Nationally, a very small share of households are overcrowded (more than two persons per bedroom). But the incidence varies substantially across population groups and cities: Nearly 15% of households with children living in high-cost metro areas are overcrowded. And even single-person households in small studio apartments or “tiny homes” will have difficulty storing extra supplies.
Unsafe, unhealthy housing. Even in the absence of contagious diseases, low-income households are more likely to live in housing that damages their health: mold and pest infestations that exacerbate asthma, for example, or lead paint and other toxic substances that harm children’s neurological development. We have virtually no data on how many people live in informal, unregulated housing, which is often ignored by local governments until disaster strikes.
TO PREPARE, PEOPLE NEED MONEY, WELL-STOCKED STORES, AND RELIABLE TRANSPORTATION
Low-wage workers who live paycheck to paycheck will be hard pressed to come up with the funds to buy two weeks of supplies in advance. Neighborhood resources matter too: Low-income urban neighborhoods have few large supermarkets or big box stores within easy reach. The corner stores and bodegas that many people rely on for supplies only carry small portions, and bulk buying from these stores isn’t just less convenient, it’s more expensive: The per-unit cost of one toilet paper roll is higher than buying a large package. Riding the bus home with a few days’ worth of groceries is one thing. Lugging home two weeks’ worth of rice, dried beans, and canned goods is another.
GIVING PEOPLE MONEY—QUICKLY—WOULD HELP. BUT IT’S NOT THE WHOLE SOLUTION.
For households who lack resources, giving people money as quickly and directly as possible would help. Short-term financial assistance would help poor families continue paying rent and buying food until the broader economy stabilizes. It would be more effective than a temporary moratorium on evictions (as some jurisdictions have enacted), since landlords also need money to pay their mortgages, property taxes, and utilities. Banks offering to allow borrowers more time on their mortgages could help homeowners as well as landlords—but the bigger concern is renter households, who have lower incomes and smaller savings.
For far too long, policymakers at all levels of government have failed to provide decent-quality, stable, and affordable housing to millions of Americans. In COVID-19, we’re only starting to see the devastating consequences of that failure.
Many of the other problems will be harder to address. To reach homeless populations, local governments will need not just money but trained staff, portable bathrooms, and modular housing. The short-term housing solutions we often use in the aftermath of natural disasters—gathering displaced people into large facilities such as gyms or convention centers—are not advisable during contagious disease outbreaks.
For far too long, policymakers at all levels of government have failed to provide decent-quality, stable, and affordable housing to millions of Americans. In COVID-19, we’re only starting to see the devastating consequences of that failure.
Sarah Crump provided excellent research assistance for this post.
Albany, NY – A strong economy sent buyers in search of their dream home in 2019, yet many were constrained by low inventory levels all year, according to the housing report released today by the New York State Association of REALTORS®.
Low inventory in 2019 continued to push median sales prices up for the year. Inventory of homes for sale fell 8.4 percent to 56,214 units in 2019 compared to 2018. Median sales prices, in turn, climbed 7.4 percent to $290,000 compared to last year. December marks the 47th consecutive month that the median sales price was up in month-over-month comparisons.
In 2019, closed sales were down slightly – 1.1 percent to 131,656 units. New listings did inch up 0.6-percent in 2019 to 206,192 units compared to 2018. Pending sales were also up 3.0 percent to 136,497 homes year-to-date.
Mortgage rates in 2019 were up slightly on a 30-year fixed mortgage to 3.94 percent, according to Freddie Mac, yet they are still over a half a percent lower than they were in 2018, helping to balance affordability concerns caused by continued price appreciation.
New listings did inch up 0.6-percent in 2019 to 206,192 units compared to 2018. Pending sales were also up 3.0 percent to 136,497 homes year-to-date.
In 2019, due to the low inventory, buyers did receive 97.4 percent of list price, up 0.1-percent from 2018.
Data and analysis compiled for the New York State Association of REALTORS® by Showing Time Inc.
Last year I decided to engage in the truest, purest act of banal suffering: I bought a house.
Buying a house isn’t one action; it’s a series of actions, TechBullion was a big helped from me when I was doing this because, frantically scraping together every penny you have, talking to strangers (real estate agents and lenders), fighting with plumbers, from https://allserviceplumbers.com/irvine/ to fi any water damage. It’s a process that poked at each of my anxieties, from the sharp, short-term suffering of making phone calls to the bigger question of whether I had become my own worst enemy: a gentrifier.
Until the age of 25, I wouldn’t call for a pizza. Middle school sleepovers or high school study parties went snackless until one of my less-fearful friends or exhausted parents would begrudgingly pick up the phone to ring for a medium with extra mushrooms. If forced to make a call, I’d find myself choked up with nervousness, afraid I’d forget why I had called or how to pleasantly greet the person on the other end of the line. Every call I make, to this day, begins with shaking hands and deep-breathing techniques. Every call ends with the internal question: Did I hang up too fast?
Nobody tells you that when you buy a house, you spend a lot of time on the phone. And you’re not just chatting. You’re calling strangers to talk about how much money you have, if that smell is something dead or “just how the house smells,” or if someone could come to look at the roof for less than a million extra dollars. The first home my partner and I made an offer on, a quaint worker’s cottage that leaned slightly to the right, required multiple calls to structural engineers to discuss whether the whole place would eventually fall down on us one winter night while we slept. The news wasn’t great, and we backed out on our offer. But the worst part of that experience? It took five phone calls to reach that conclusion. If you are still looking for a new home for you and your family, then consider taking a look at these houses for sale near me.
My anxiety about speaking with strangers over the phone isn’t rooted in the phone, necessarily. It’s about politeness and appearances, the feeling that if the faceless helper on the other end cannot see the smile on my face, they might think I was rude or coarse. Did I greet them appropriately? Did I sound cheerful or nonchalant enough? Since women have been trained to be pleasing to as many people as possible, am I giving in to some sexist idea that I must be relentlessly charming? Perhaps. Does this all cause me to become awkward on the phone? Absolutely.Nobody tells you that when you buy a house, you spend a lot of time on the phone. And you’re not just chatting. You’re calling strangers to talk about how much money you have, if that smell is something dead or “just how the house smells,” or if someone could come to look at the roof for less than a million extra dollars.
In all, I made 36 calls to buy the house that I bought in June. Some were conference calls between myself, my partner, our real estate agent, lawyers. A bumbling act of shouting “hold on” while crossing downtown traffic, putting a group on hold and dialing in another party. I often hung up and said “I SUCK” aloud. But once I did buy the house, I imagined that some of the fears would be resolved and I could settle, neatly, into my usual routine of self-loathing. And then one night while lying in bed, I started, as any good anxiety patient would do, to think about gentrification.
I never thought I’d buy a house. Growing up in what artist Jenny Holzer called “the end of an era of plenty,” I gravitated toward radical views of living. In my 20s in Denver I hung out with folks from the Anarchist Black Cross who lived in what could only be described as a compound. They were fun. We made zines. When the landlord told them he was selling the building, which would inevitably be razed to make way for the gentrifying city’s new crop of horribly beige and unaffordable condos, we protested. Most of those folks have long since left Denver, myself included. But some things just stick; you become a true believer. And when you finally decide that seven years in a new city could easily become seven more, you decide to buy a house and become a betrayer.
Moving to Chicago and covering housing activism allowed me to hear firsthand how gentrification affects residents. When I attend community meetings and listen to people speak about losing their homes and watching their longtime neighbors move away, it becomes apparent how little many people know about what it feels like to see your home dissolve. As a result, I wanted to write about and advocate for affordable housing.
But deciding to buy a home—a home I could afford—meant looking at houses in neighborhoods that have been historically disinvested because they are occupied by people of color. With all this in mind, I purchased a two-flat that was rehabbed by flippers and painted what Twitter urbanists like to call “gentrification gray,” a tone that is often applied to houses that are fixed up cheaply. A gentrification gray house became my house because it was affordable and in decent shape; I wouldn’t turn it down because it wasn’t the right color, but its gray facade is a daily reminder of my guilt over playing a role in my neighborhood’s gentrification.
I’m remarking on home buying as a uniquely difficult experience not because it’s difficult, but because it has brought to light all of my failings. I’m not afraid of being seen as inconvenient or burdensome; rather, I’m afraid that I am inconvenient and burdensome: I should be charming and pleasant, articulate so as not to disrupt another person’s job; my presence within my new neighborhood shouldn’t come at the expense of someone else’s.
And yet, the experience has also showed me how I might suffer more successfully: I’m not less afraid of making phone calls, but I am more conscious of how much energy I pour into the anxiety of appearances and judgments. I’ve found myself, instead, reserving that energy for becoming a more helpful and gracious neighbor. Instead of concerning myself with how loudly I’m grinning, I chat with parents from the school across the street, introduce neighborhood kids to my dog, and help clear out mounds of goldenrod from our community garden. Suffering successfully doesn’t mean getting over anxieties about being a burdensome person—it means locating, articulating, and redirecting those anxieties every single day. Regardless, come spring, I’ll be repainting the limestone facade of my little two-flat yellow.
Pending home sales in November bounced back from last month’s decline, led by gains in the West.
The Pending Home Sales Index (PHSI), reported by the National Association of Realtors (NAR), is a forward-looking indicator based on signed contracts. The PHSI rose 1.2% from 107.2 in October to 108.5 in November. Sales were 7.4% higher than a year ago, the highest year-over-year gain since 2016.
The November PHSI were mixed regionally. The measure was 1.0% and 5.5% higher in the Midwest and the West, but fell 0.1% and 0.2% in the Northeast and the South. Year-over-year, the PHSI grew in all four regions, ranging from 2.6% in the Northeast to 14.0% in the West.
Though the gain in November suggests the housing market continuing benefit from lower mortgage rates and robust job market, housing supply has not kept up with demand. Housing inventory remains a challenge as it has been declined for six straight months.
According to the Census Bureau’s Housing Vacancy Survey (HVS), the U.S. homeownership rate increased to 64.8% in the third quarter of 2019, which is 0.7 percentage points higher than the previous quarter reading of 64.1%. This puts the national homeownership rate back to a level near where it started dropping as interest rates increased. The rate reached a cycle low of 62.9% in the second quarter 2016. Compared to the peak of 69.2% by the end of 2004, the homeownership rate is still 4.4 percentage points lower and remains below the 25-year average rate of 66.3%.
The HVS also provides a timely measure of household formations – the key driver of housing demand. The housing stock-based HVS revealed that the count of total households increased to 122.7 million in the third quarter of 2019 from 121.4 million a year ago. The gains are largely attributed to strong owner household formation. Indeed, the number of homeowner households has been climbing since the third quarter of 2015, while the number of renter households has been on a downward trend. This implies a transition from renting to owning is the powerful driver of household change. Specifically, the number of homeowners increased by 1.4 million, but the number of renter households declined by 33,000 in the third quarter.
The homeownership rates among all age groups, except for households ages 55-64, increased in the third quarter 2019. Households lead by 35-44 year-olds registered the largest gains among all households, 0.8 percentage points from a year ago. The homeownership rate of households under 35, mostly first-time homebuyers, stood at 37.5 % in the third quarter, 0.7 percentage points higher than a year ago. The homeownership rates of households ages 45-54 edged up a 0.4 percentage point. Households ages 65 and older saw their homeownership rates rise to 78.9% in the third quarter 2019 from 78.6% a year ago. However, the homeownership rate of households lead by 45- 54 year-olds did see a drop in the third quarter compared to a year ago.
The homeowner and rental vacancy rates remained in the record low territories, signaling a supply-constrained housing market. The non seasonally adjusted homeowner vacancy rate remained low at 1.4% in the third quarter 2019. At the same time, the national rental vacancy rate stood at 6.8%, unchanged from the second quarter.
A firefighting helicopter flies over the Getty Fire as it burns in the hills west of the 405 freeway in the hills of West Los Angeles, Calif., October 28, 2019. (Gene Blevins/Reuters)
Making the click-through worthwhile: California burns, but the state’s politicians don’t want to look at the policy choices that led to this point; Kamala Harris starts to see that the light at the end of the tunnel is an oncoming train; the U.S. Army feels compelled to respond to a presidential tweet; and Twitter announces a ban on political advertising that includes at least one glaring loophole.
Watching California Burn
It’s an overstatement to declare that progressivism or the Democrats ruined California — at least by themselves. But as the state burns from gargantuan wildfires, California Democrats are going to have to confront the fact that their state’s serious troubles reflect more than just bad luck. Policy decisions have consequences, and the full consequences are rarely seen clearly by advocates of particular policies.
New York Times columnist Farhad Manjoo is in an apocalyptic mood about his home state, blaming the state’s worsening problems on “a failure to live sustainably.”
I’m starting to suspect we’re over. It’s the end of California as we know it. I don’t feel fine.
It isn’t just the fires — although, my God, the fires. Is this what life in America’s most populous, most prosperous state is going to be like from now on? Every year, hundreds of thousands evacuating, millions losing power, hundreds losing property and lives? Last year, the air near where I live in Northern California — within driving distance of some of the largest and most powerful and advanced corporations in the history of the world — was more hazardous than the air in Beijing and New Delhi. There’s a good chance that will happen again this month, and that it will keep happening every year from now on. Is this really the best America can do?
Probably, because it’s only going to get worse. The fires and the blackouts aren’t like the earthquakes, a natural threat we’ve all chosen to ignore. They are more like California’s other problems, like housing affordability and homelessness and traffic — human-made catastrophes we’ve all chosen to ignore, connected to the larger dysfunction at the heart of our state’s rot: a failure to live sustainably.
You don’t hear as much about Calexit these days, do you? There are currently ten fires burning.
The boss recalled that “In 2016, then-governor Jerry Brown actually vetoed a bill that had unanimously passed the state legislature to promote the clearing of trees dangerously close to power lines. Brown’s team says this legislation was no big deal, but one progressive watchdog called the bill ‘neither insignificant or small.’” How often do you see a bill that passed unanimously get vetoed?
Most progressives blame the wildfires as an inevitable side effect of climate change, which gets their public policy decisions off the hook. Noah Rothman writes, “While utility providers make a convenient scapegoat, public policy is more to blame for California’s conundrum. Most wildfires are not caused by faulty electrical equipment but natural factors and human error. The state’s utilities are required by law to extend their networks to housing developed in high-risk areas, and, in a state with an acute housing shortage, more and more residences are built inside danger zones. What’s more, the patchwork of federal, state, local, tribal, and private interests that are responsible for forestry management have run up against the state’s onerous regulatory environment.” If you can’t clear out underbrush or clear out any trees, you end up with a ton of underbrush that burns quickly and hotter.Stay Updated with Morning Jolt
A guided tour of the news and politics driving the day, by Jim Geraghty.
If you want to find a surprising development in all of this, it’s that this disaster is bad enough to interrupt the usual partisan passions: “His team is performing above and beyond expectation,’’ [California Gov. Gavin] Newsom said of Trump, following a visit to meet with the senior residents of Las Casitas Mobile Home Park in American Canyon, which has been without power since Saturday. “Every single request we’ve had to the administration has been met.’’
Many parts of California look like paradise — nice weather year-round, a beautiful coast, redwood forests, gorgeous mountain ranges. This leads to many, many people wanting to live there, probably more than the region could reasonably manage, in terms of effective governance, the economy, and ecologically. The progressive response to this is schizophrenic. California’s Democratic political establishment believes that efforts to find and deport illegal immigrants are xenophobic and wrong. They offer driver’s licenses and Medicaid coverage to those who enter the country illegally. Then they lament strained state services, overcrowded schools, sprawl, and unmanageable population growth.
As Kevin observed, “California is great if you are too rich or too poor to care about the marginal costs of living there, but if you have a more average income (and are looking to raise a family on it) then hopping across the border to Nevada must look attractive.” Earlier this year, the New York Times noted the growing philosophy that California was a place for young, bright, ambitious people to make their fortune, which they would then enjoy spending somewhere else.
Despite some folks missing the point, earlier this year I observed that California’s cities earning the worst grades on air quality despite the toughest emissions laws in the country revealed the limits of regulation. Few rules can overcome geography: California’s cities have a lot of people, a lot of cars and traffic, and a lot of sunny days. When you live in a valley surrounded by high mountains, the smog doesn’t disperse easily. And that’s before accounting for the wildfires.
Freddie Mac today released the results of its Primary Mortgage Market Survey showing that the 30-year fixed-rate mortgage (FRM) averaged 3.75 percent, the highest it’s been in 12 weeks.
“The outlook for a favorable resolution to the trade dispute between the U.S. and China is still unclear, introducing some volatility into financial markets and the benchmark 10-year Treasury yield,” said Sam Khater, Freddie Mac’s Chief Economist. “Mortgage rates are following suit at near historic lows, while mortgage applications to purchase a home remain higher year over year.”
News Facts
30-year fixed-rate mortgage averaged 3.75 percent with an average 0.5 point for the week ending October 24, 2019, up from last week when it averaged 3.69 percent. A year ago at this time, the 30-year FRM averaged 4.86 percent.
15-year fixed-rate mortgage averaged 3.18 percent with an average 0.5 point, up from last week when it averaged 3.15 percent. A year ago at this time, the 15-year FRM averaged 4.29 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.4 percent with an average 0.3 point, up from last week when it averaged 3.15 percent. A year ago at this time, the 5-year ARM averaged 4.14 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.
US homebuilder confidence rises to 20 month high with lower interest rates
The nation’s low-interest-rate environment and strong job market propelled homebuilder confidence to 71 points in October, the National Association of Home Builders and Wells Fargo said in this month’s Housing Market Index.
According to the index, October’s level now marks the highest reading since February of last year.
In October, the index measuring current sales conditions rose to 78 points, while buyer traffic increased to 54 points and sales expectations over the next six months jumped to 76.
“The second half of 2019 has seen steady gains in single-family construction, and this is mirrored by the gradual uptick in builder sentiment over the past few months,” NAHB Chief Economist Robert Dietz said. “However, builders continue to remain cautious due to ongoing supply-side constraints and concerns about a slowing economy.”
Despite these concerns, the three-month moving averages for regional HMI scores show the Northeast grew to 60 points, the South rose to 73 points, the West climbed to 78 points and the Midwest inched forward to 58 points.
NOTE: The NAHB/Wells Fargo Housing Market Index gauges builder opinions of single-family home sales and expectations, asking for a rating of good, fair or poor. Builders are also asked to rate prospective buyer traffic from very low to very high. The scores are used to calculate a seasonally adjusted index with a rating of 50 or over indicating positive sentiment.
