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 What Does The Mortgage Industryās Post-Pandemic Future Hold?Ā This week we’re bringing you:
Zillow predicts small home price drop through rest of 2020*
Home prices actually rose in March
Despite the spread of COVID-19, homebuyer demand remains strong, and U.S. home prices arenāt expected to drop more than 2-3% through the end of the year, according to a forecast released by Zillow on Monday.
According to Zillow, the third quarter this year will show a 0.13% decline year over year, followed by a 1.18% decline in Q4 and 1.66% decline in Q1 2021. Once Q2 2021 rolls around, there will be an estimated 0.21% increase.
The forecast continues to predict that the number of homes sold will fall as much as 60% this spring.
The cause? The overall economic uncertainty due to the pandemic, and adjusting to shelter-in-place and stay-at-home orders that are disrupting the economy. However, compared to the previous recession, which caused millions to lose their homes after the housing crash, the current housing fallout seems to offer some silver linings. Read more in-depth here.
Cost of Imperfection Remains High in The Mortgage World*
Mortgage rates moved off their recent lows to start the new week, but only slightly. That keeps the average lender very close to the lowest rates in roughly 2 months. It also keeps us fairly close to the lowest rates ever. In fact, some lenders were at their best rates ever last Friday, but they were the exception.
Am I perhaps splitting hairs here? Absolutely. When you follow rates as closely as we do, we’re forced to consider not only the quoted interest rates themselves, but also the fluctuations in upfront costs for any given rate. In other words, the actual rate at the top of a loan quote is likely the same for most mortgage seekers as it was on Friday. The only difference is that the upfront costs associated with that rate are slightly higher. Thus, rates are effectively higher. Read more in-depth here.
6 things to know about refinancing right now*
With interest rates dropping, is now the time to refinance your home? See if you’re eligible and what the experts say.
With the real estate market in a constant rollercoaster due to the coronavirus, homeowners are watching interest rates like hawks. If they drop low enough, you could score a great deal on refinancing your home.
Before you jump to refinance, see if now is the best time to take advantage of rates and if it’s worth going through the process during a pandemic.
1. Refinancing demand is high…
When I bought my home last month, there was a delay with my mortgage broker. Nothing we did wrong, he said. But the brokerage got such an influx of refinancing applications that it pushed back my closing paperwork. We got everything done at the final hour, but, under normal circumstances, it would’ve happened weeks sooner. With so many people requesting refinancing, our application stalled.
Melissa Cohn, executive vice president of sales at Family First Funding, says demand was strong in March when rates were at historic lows, forcing brokerages and banks to reduce their pool of applicants with new guidelines. Read more in-depth here.
Have purchase applications already bottomed out?*
Purchase applications saw 12% growth last week
Historically, the heat months for the purchase application data are from the second week in January to the first week in May. During this period, purchase applications are at their highest volume for the year and set the pace for what we should expect for the year.
As it happens, for 2020, a portion of the heat months was also the time when coronavirus hit the U.S. and the period when the highest number of communities were under stay-at-home restrictions.
It remains to be seen if purchase application demand has merely been delayed or if it has been obliterated for the rest of 2020.
In the period BC (Before Coronavirus), housing demand was robust. We had double-digit year-over-year growth in purchase applications and existing, and new home sales were running at levels above my 2020 forecast. Read more in-depth here.
Opinion: How the coronavirus pandemic could forever change home buying and mortgage lending*
Borrowers and lenders will face these 3 new and unfamiliar ways of doing business
Extraordinary times call for extraordinary measures. Business leaders in all parts of the U.S. economy are taking bold steps to respond to the coronavirus crisis. Those of us in the mortgage industry are implementing reforms that will be long-lasting in terms of how lenders operate and how consumers obtain financing. Here are three ways in which the crisis may permanently affect the housing sector:
1. Increased digitization: The COVID-19 pandemic has resulted in mortgage lenders revisiting and, in many cases, adopting measures to digitize the mortgage process. Firms like the one I lead favor an omni-channel approach, giving consumers the option to work with our loan officers in person or over the phone and online. Read more in-depth here.
I just refinanced my mortgage, despite coronavirus. Hereās what I learned*
The woman who approached our doorstep Monday morning was wearing a mask, her eyes doing their best to smile a greeting. She was hugging a folder and a bundle of papers.
I held the door open for her but didnāt extend my hand for her to shake. Nor did she, as she introduced herself.
āThis must be so weird for you,ā I said. My voice felt muffled by the cloth covering much of my own face.
A loan closing agent, she was at our house so I could sign the many documents needed to wrap up refinancing our mortgage. I had applied a lifetime ago ā Feb. 27 ā via Quicken Loanās Rocket Mortgage. Exactly two months after my application, the process was coming to an end in a coronavirus-esque way: Masks on, extra space between the agent and me. Read more in-depth here.
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