Americans are returning to the housing market, mortgage data shows

[Anonymous]

Applications for mortgages to purchase homes gained for the fifth consecutive week while refinancings dropped.

The Mortgage Banker's Association seasonally adjusted index measuring purchase applications rose 6% last week, while applications for refinancings fell 6% from the prior week. 

The consecutive weekly increases in purchase applications may be a sign the housing market is beginning to recover from the impact of COVID-19. See more below.

https://www.housingwire.com/articles/americans-are-returning-to-the-housing-market-mortgage-data-sho...

[Revelate]

I was reading that Zillow had restarted their Offers program.

Apparently it'll soon be time to go back to LA for a week long whirlwind of dumping stuff.  

[Anonymous]

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@Revelate wrote:

I was reading that Zillow had restarted their Offers program.

Apparently it'll soon be time to go back to LA for a week long whirlwind of dumping stuff.  

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Don't fall in love?

[Anonymous]

Interesting, though the question is still whether it's a good time to buy or not. Some people are still out of work, more compnies may still face uncertainty meaning more job losses. I'm curious if thse new purchases are by investors or average people just looking to buy a house. Because your average person wouldn't be seeing it as a good time to buy being in our current situation, right? At least not in such high numbers. 

Unfortunately due to a recent partial income loss I no longer qualify for any houses around here that are actually suitable. The timing hasn't exactly been the best, if i had started the process before the income reduction I would have had higher CC/loan balances along with other things. Which is why I waited to get things in order.  

It's almost scary to see the housingmarket doing so well in a time of uncertanty, with so many supposedly out of work and more to likely  come.

[sccredit]

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@Anonymous wrote:

Interesting, though the question is still whether it's a good time to buy or not. Some people are still out of work, more compnies may still face uncertainty meaning more job losses. I'm curious if thse new purchases are by investors or average people just looking to buy a house. Because your average person wouldn't be seeing it as a good time to buy being in our current situation, right? At least not in such high numbers. 

Unfortunately due to a recent partial income loss I no longer qualify for any houses around here that are actually suitable. The timing hasn't exactly been the best, if i had started the process before the income reduction I would have had higher CC/loan balances along with other things. Which is why I waited to get things in order.  

It's almost scary to see the housingmarket doing so well in a time of uncertanty, with so many supposedly out of work and more to likely  come.

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Personally I believe it is the effects of the CARES Act. However, I think it just kicks the can down the road and we haven't seen the real effect yet. People will be out of work en masse and when payment deferrals are over the loans will begin to default. The stimulus and payment deferral programs are just prolonging the damage. I may well be wrong but only time will tell.

[Anonymous]

The housing market will continue to do well as long as supply is lower than demand. The sad reality is that the housing crisis has resulted in builders not building so the demand always outpaces supply. Net effect - ever rising, or at the very least stable, prices. Even if a bunch of people get foreclosed on, there are plenty of renters who want to be homeowners that just need the right place to become available. 

It will be interesting to see if people start to move away from the big cities now that many companies are making telecommuting positions available permanently because that migration will cause housing prices to come back down to reality in some places and raise the cost elsewhere instead. 

[Revelate]

And what homes that are being built aren't generally low income housing to begin with.

I haven't seen any concrete data other than average wage reports but the hardship is falling on the lower end of the wage scales.

Some stupid napkin math, $15/hr = 30K / year.  All in assuming no other debt on a standard 43% DTI that's $1075/Mo PITI.

That doesn't go very far in a lot of places, Los Angeles being an obvious example where even the average home price is out of reach.  Fact is the people that were looking to buy places, even my not great today condo down by the Port of LA, are in a different economic strata than those who on average got whacked the hardest with COVID.

I honestly think that is why we aren't seeing more softness in the housing market; add in the percentage of home owners is still far greater than the unemployment rate and the fact that nobody is losing their home, yet, and there really isn't any downward pressure on the market in many areas.

I'm strongly of two minds on the effectiveness of the stimulus and CARES, but they are going to distort the housing market... and everything in my work life is suggesting companies ain't skeerd of the economy.  2 and change jobs now but the change is producing another 500-1000 a week, and that goes a long way and now someone's talking another fractional project.  I am seriously going to have to start turning away work at this point and that hasn't happened often in my career and employers have never been this flexible either.

I'm admittedly in IT which is experiencing a sort of Renaissance right now,  but there are other jobs and even industries doing well too... so when the middle and top end incomes are still going, the housing market isn't going to hardcore collapse and it will take a while for the stress to filter through it in many areas.

[Citylights18]

Another factor that is helping the housing market is that people right now don't have anything to do so if they feel like the pricing is fair they might as well jump on the opportunity to get a house. That way they can spend 3 months painting it and outfitting it.

Some industries are doing better than others. Of course we know travel and lesuire is a big hit as is higher ed with all the campus closures. In those industries they are taking paycuts if they still have jobs.

I got a raise in April but I seriously doubt raises will be handed out for anyone next year. Therefore it might make sense just to pick something up while the going is good.

[Anonymous]

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@Anonymous wrote:

The housing market will continue to do well as long as supply is lower than demand. The sad reality is that the housing crisis has resulted in builders not building so the demand always outpaces supply. Net effect - ever rising, or at the very least stable, prices. Even if a bunch of people get foreclosed on, there are plenty of renters who want to be homeowners that just need the right place to become available. 

It will be interesting to see if people start to move away from the big cities now that many companies are making telecommuting positions available permanently because that migration will cause housing prices to come back down to reality in some places and raise the cost elsewhere instead. 

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You hit a few nails on the head based on what I've been reading and what I'm experiencing having suddenly decided to pull the trigger on a house in FL.

I read an article yesterday that isn't forecasting a drop in housing prices because supply & demand is staying at roughly the same ratio. (Both were down at the time the article was written, but falling demand was met by slowdowns in building and people that were selling deciding not to.)

In contrast, prices fell so fast post 2008 because readily available financing caused a boom in demand, which suppliers acted to meet. Then the financing guidelines were tightened, eliminating a huge group of people they were building those homes for.

My realtor in my small hometown in FL is helping 5 other people relocate from the Northeast right now. I think many folks with any inkling of a desire to leave their big cities have decided to pull the trigger because of all of this. 

[CreditCuriosity]

Alot of people aren't willing to list/sell as they don't want to be low balled either.  Thus once again as been mentioned supply/demand.  My market where I live construction has slowed down but alot of people are still buying houses as we have been impacted, but for most part people that can afford houses where I live are the six income earners.  Lower incomes will be stuck renting for the foreseeable future unless they have saved enough for a large down payment to offset their monthly costs, etc.  i have been looking at seriously considering buying a duplex and renting it out as those are gold mines, especially in times like this if one could be had at a good price.