Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about Mortgage Refinancings Set to Surge to a 17-Year High. This week we’re bringing you: Is The Housing Market Already Rebounding From COVID-19?
Consumer confidence rises unexpectedly in May as economy reopens*
Consumer confidence unexpectedly improved in May as the U.S. economy slowly restarted, according to data released Tuesday by The Conference Board.
The business group’s consumer confidence index rose to 86.6 this month from 85.7 in April. Economists polled by Dow Jones expected consumer confidence of 82.3 in May.
“Following two months of rapid decline, the free-fall in Confidence stopped in May,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement. “Short-term expectations moderately increased as the gradual re-opening of the economy helped improve consumers’ spirits.”
As of Tuesday, all 50 states had reopened their economies to some extent. Read more in-depth here.
More good news for May: newly pending sales up almost 50% from same period in April*
Inventory has also hit new lows
In the week ending May 10, newly pending sales nationwide were up almost 50% from the same period in April, according to Zillow’s April 2020 Market Report.
And in four large metros — Cleveland, Cincinnati, Houston and Dallas-Fort Worth, newly pending sales were up from the same time last year.
Does this mean that we’ve seen the worst of the COVID-19 effect on housing, and that it will rebound in May and the summer months? The jury is still out on that prediction, and of course, it depends on what happens next. But there are some bright spots.
New for-sale listings are up 12.5% month over month after the seven days ending on May 10, but year over year they were still down 27.6%.
Overall, while home listings continue to bounce back, inventory still remains about 20% below last year’s already low levels.
Home values continued their upward trajectory in April, with the typical U.S. home value growing 4.3% year over year to $250,492.
Also, the pace of yearly U.S. home value growth has accelerated every month this year, after having slowed down for 20 consecutive months beginning in spring 2018, Zillow said. Read more in-depth here.
Is the housing market already rebounding from COVID-19?*
An update on the 5 indicators that will show when the market is back on track from the pandemic
Cabin fever is a real thing. And you don’t have to live in a cabin to get it.
With everyone chomping at the bit to get back to “normal,” I thought it would be useful to check in on the five metrics I previously identified as signals for the beginning of the economic recovery stage that I have been calling AB, or America is Back.
1. Flattened Curve
Status: Close, but stay vigilant
First and foremost, for the economy to get back on track, we needed to dampen then quash the increase in cases of infections per day, nationwide. Only when the spread of the virus is contained can we safely return to work and some semblance of normality.
According to my virus turnaround thesis, “It is from this data that I have based my virus turnaround thesis, which is that by May 18 or sooner, we will see a flattening of the new infection curve, and by September 1, we will be at a much higher capacity to fight this virus.”
While it is true that we have been successful in flattening the curve nationally and testing is more available, there are still spots where the number isn’t doing great.
I do not feel confident in saying the spread of this disease is behind us, so I cannot give this indicator and all clear just yet. Read more in-depth here.
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