T he pandemic isn’t scaring off

home buyers. More than

half—or 53% of about 1,000

home buyers recently

surveyed—say they are more likely to

buy a home in the next year due to the

coronavirus outbreak.

First-time home buyers and millennials

may be the most eager to buy within the

next 12 months, the survey from

LendingTree shows. The top two

motivators for buying soon are to take

advantage of record low mortgage rates

(67%) and being able to save for a

larger down payment due to reduced

spending (32%). Also being confined in

a smaller space during stay-at-home

orders have made homeownership more

appealing, the survey finds.

The pandemic is not only prompting

more people to pursue homeownership,

it's also influencing their home

shopping. The majority of respondents

say the coronavirus pandemic has

affected how much money they planS

to spend on a new home. Forty-four

percent plan to buy a less expensive

home while 21% are targeting a pricier

home...

Source: NAR

T he government has injected

trillions of stimulus dollars

into the economy. This is

causing the federal budget

deficit to soar as we deal with the

devastating effects of COVID-19 upon

our economy. At the same time, the

Federal Reserve Board moved short-

term interest rates down near zero and

purchased mortgage backed securities

to ensure that rates on home loans also

were at historic lows. At a recent

meeting, they also indicated that these

rates will most likely stay near zero

through 2021.

Indeed, according to the Freddie Mac

weekly survey, rates on home loans

have hit the lowest level in history in

the middle of June. And these historic

low interest rates are poised to boost

our economic recovery just as much as

the stimulus dollars spent. Refinances

of home loans are saving homeowners

thousands of dollars. Stimulus checks

provide a one-time shot in the arm--but

refinancing at a lower rate will save

consumers money every month until

they pay off their home loan. Even the

government will save money on

financing the burgeoning deficits at

these lower rates -- at least in the short-

term.

Lower rates are also providing a lift for

the real estate market as well. There has

been surprisingly strong real estate

demand after the first few weeks of this

crisis. For the year, it is expected that

this stronger than expected real estate

activity will provide another lift for the

economy. This stands in contrast to the

last recession in which real estate was a

drag on the economy for many years,

causing a very slow recovery. This

year, we could really use any lift we can

get...

The Magic of Low Rates

Buyers Are Ready To Purchase!

U nlike the role it played in the

Great Recession that started

in 2008, the housing industry

may help lead us out of

today’s pandemic-induced economic

recession, according to Daniel McCue,

Senior Research Associate at Harvard

University’s Joint Center for Housing

Studies. While housing was more of a

barrier than a balm in the last economic

recovery, it is more typical for the

housing industry to serve as a source of

strength during an economic recovery. In

fact, this has been the case in nearly

every recession over the past five

decades, according to McCue.

One of the main points of difference

between the housing market leading into

the Great Recession and the market

heading into today’s economic downturn

is that the housing market prior to 2008

had a “substantial overhang of distressed

and foreclosed properties,” which

“needed to be absorbed before housing

construction could be a driver of

recovery,” McCue said. The housing

market early this year, however, had

tight supply and low vacancies.

The share of vacant homes for sale is

58% lower than in 2007 and the share of

vacant rental properties available is 21%

lower. “Hopefully, what these vacancy

numbers do suggest is that, in terms of

supply, housing construction is not likely

to be a barrier to recovery and instead

may once again be a source of strength

that helps the economy turn around once

the worst is over,” McCue said...

Source: DS News

©2020, All rights reserved The Hershman Group www.originationpro.com

Housing to Lead the Way?

Compliments of Suzanne Smith

HNB Mortgage 2101 W. Wadley Ste.36

Midland TX 79705 432-683-0081

Suzanne@HNBMortgage.com NMLS # 192813

Branch/Company 226999/205935

April 2018

Selected Interest Rates

June 25, 2020 30 Year Mortgages——–3.13%

2019 High (Jan 3)-—–—–4.51%

2019 Low (Sept 5)———3.49%

15 Year Mortgages——-2.59%

5/1 Hybrid ARMs——–—–3.08%

10 Year Treasuries—–—–0.67%

Sources—Fed Reserve, Freddie Mac Note: Average rates do not include fees and points. Information is provided for indicating trends only and should not be used for comparison

Did You Know…

Builder sentiment jumped a striking 21 points in June to 58, the largest monthly increase ever in the National Association of Home Builders/Wells Fargo Housing Market Index. Any reading above 50 indicates a positive market.

Source: NAMB

July 2020