August 10, 2020
Mortgage rates tumble to a new record LOW, home equity loans improve across the nation, and job market gains continue. We take a closer look This Week in Real Estate.
According to Freddie Mac This Week in Real Estate the average mortgage rate for a 30-year fixed mortgage fell to an all-time low for the eighth time through the first seven months and one week of 2020. In other favorable news, the July jobs report, released Friday, beat expectations as the country added 1.8 million jobs while economists expected to see 1.5 million jobs. Below are a few newsworthy events from the first week of August that influence our business:
* Mortgage Rates Tumble To New Record Low This Week. Average U.S. mortgage rates for a 30-year fixed mortgage fell to an all-time low of 2.88% this week, the eighth time in 2020 the weekly rate has set a record in a Freddie Mac series that goes back almost five decades. It fell from 2.99% last week, Freddie Mac said in a report on Thursday. The average 15-year rate fell to 2.44%, the lowest in almost 30 years of data, according to the mortgage financier. “We expect rates to stay low and continue to propel the purchase market forward,” Khater said. “However, the main barrier to rising demand remains the lack of inventory, especially for entry-level homes.” Mortgage rates began tumbling in March after the Federal Reserve made a pledge to buy mortgage-backed securities and Treasuries to support demand in the bond market, which is where most U.S. home loans are packaged and sold.
* Home Equity Levels Improve Across Nation in Second Quarter. ATTOM Data Solutions released its second-quarter 2020 U.S. Home Equity & Underwater Report Thursday, which shows that 15.2 million
residential properties in the United States were considered equity-rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value. The count of equity-rich properties in the second quarter of 2020 represented 27.5 percent, or about one in four, of the 55.2 million mortgaged homes in the United States. That was up from the 26.5 percent level in the first quarter of 2020, despite the spreading economic fallout from the worldwide Coronavirus pandemic. “Homeowners saw their equity rise far and wide throughout the United States during the second quarter of this year in yet another sign of the housing market punching back against the Coronavirus pandemic. More property owners rose into equity-rich territory and escaped the seriously underwater lane, putting more money into the average household,” said Todd Teta, chief product officer with ATTOM Data Solutions.
* Job Market Gains Continue. Surpassing recent dampened expectations, total payroll employment rose by 1.8 million and the unemployment rate declined to 10.2% in July. Residential construction employment rose by 24,000 in July to 2.8 million. Total construction industry (both residential and nonresidential) employment rebounded to nearly 7.2 million in July. After the economy lost 22.1 million jobs in March and April due to the impact of the COVID-19 pandemic and efforts to contain it, about 9.3 million jobs were created in the past three months. The improvements in the past three months reflect the economy is recovering from the COVID-19 pandemic gradually.