December 13, 2020
U.S. homeowners see major home equity gains in Q3 of 2020 as home price growth continues to set records and mortgage rates hit 14th RECORD LOW of the year. We take a closer look This Week in Real Estate.
* U.S. Homeowners Gained $1 Trillion of Equity in Q3. CoreLogic’s latest Home Equity Report for the third quarter of 2020 shows U.S. homeowners with mortgages (which account for roughly 63% of all properties) have seen equity increase by 10.8% year over year, representing a collective equity gain of $1 trillion, and an average gain of $17,000 per homeowner, since the third quarter of 2019. This marks the largest average equity gain since the first quarter of 2014. Despite the economic impact of the pandemic, home prices soared throughout the summer and fall. Appreciation reached its highest level since 2014 in the third quarter of 2020 as prospective homebuyers continued to compete for the low supply of homes on the market, pushing home equity to record levels. Equity gains are likely to persist over the next several months as strong home-purchase demand is expected to remain high and continue pushing prices up. However, the CoreLogic HPI Forecast shows home prices slowing over the next 12 months as new home construction and more existing for-sale homes ease supply pressures. This could moderate the pace of both home price growth and equity gains. “Over the past year, strong home price growth has created a record level of home equity for homeowners,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The housing market has remained a strong pillar in an otherwise tumultuous economic year,” said Frank Martell, president and CEO of CoreLogic.
Full Story… https://www.worldpropertyjournal.com/real-estate-news/united-states/irvine/real-estate-news-corelogic-2020-housing-data-home-equity-gains-in-2020-rising-home-price-data-frank-nothaft-covid-19-impact-on-home-sales-in-2020-12267.php
* Trend Shows Home Price Growth at Record High, Rising at Fastest Pace Since Early 2000s. According to economic forecaster Lakshman Achuthan, home prices across the country are rising at the fastest pace since 2004. Plus, he finds price growth is at a record high. His leading home price index, which has been around for about two decades, shows growth adjusted for inflation has surpassed the housing bubble’s peak. But unlike the housing bubble, Achuthan doesn’t think a slowdown will be dramatic because there’s no residential overbuilding.
* Mortgage Rates Set 14th Record Low of the Year, Driving Even More Refinance Demand. Mortgage rates fell again, falling to a record low for the 14th time this year, defying their usual correlation to Treasury yields, which have recently been moving higher. Mortgage applications to refinance rose 2% last week from the previous week, and an eye-popping 89% higher from a year ago, according to the Mortgage Bankers Association’s seasonally adjusted index. Mortgage applications to purchase a home fell 5% for the week but were a strong 22% higher annually. “The purchase market is also poised to finish 2020 on a strong note. Applications fell slightly last week but were around 3% higher than the two weeks leading up to Thanksgiving.