July 2, 2020 | Market Update

Market News 7-3-2020

Mortgage Market Update

Bidding War During the Pandemic

A new study from Clever revealed that 42% of homebuyers who made a purchase during the January to May time period ended up in a bidding war, demonstrating the strong demand for homes amid low inventory. In addition, the study showed the strains caused by COVID-19 shutdowns, which resulted in record-breaking numbers of workers filing for unemployment. According to Clever, 59.29% of homeowners who purchased their home before the World Health Organization declared the pandemic said that someone who typically contributes to housing costs lost their jobs during the pandemic. Meanwhile, those who purchased their home since March (50.48%) were less likely to have lost a job, while stimulus check payments contributed to down payments for 21.1% of homebuyers. Clever said that 84% of homebuyers who purchased their home before April 28th were able to pay their mortgage in full. Of recent homebuyers, 55% said they’re paying their mortgage in full, but only 45% are able to pay if a financial contributor has lost their job. 1

Purchase Applications Reach Highest Levels in 11 Years

A seasonally adjusted index measuring purchase applications jumped 8% last week, according to a report from the Mortgage Bankers Association. While the week prior saw the seasonally adjusted index rising to its highest level since January, this week the MBA reported the highest level in over 11 years. Just as mortgage applications increased, applications for refinancing’s also rose 10% from the week prior, signaling the second gain for refinancing in two months. “The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. 3

Sources: 1HousingWire, June 17; 3HousingWire, June 17