Market News 6-04-2020
Mortgage Market Update
Manufacturing activity rebounded from an 11-yr low in May, the strongest sign yet that the worst of the economic downturn is behind us as businesses reopen. Construction spending rose year over year in April, despite a dip due to the recent lockdowns. Residential spending was 6.2% higher than in 2019. Initial jobless claims dropped below 2 million for the first time since mid-March, continuing a pattern of weekly declines.
According to a May survey, 52% of home builders are using incentives to bolster sales. Incentives include paying closing costs/fees, offering free or reduced-cost upgrades, and discounting prices. Home prices in April saw their biggest gain in 2 years, up 5.4% annually and 4.5% from March. Inventory of entry level homes fell 25% in April from a year earlier. A recent survey of 1,700 homebuyers suggests they are acclimating to the tight inventory. 41% say they’d be willing to go over budget by an average of $25,000 for the home they want.