Some news on our housing market today, it appears that home building is beginning to rebound. Housing Starts were up 4.3% in May, Building Permits went up 14.4% and the National Association of Home Builders confidence Index’s biggest ever monthly gain took it into positive territory. Freddie Mac believes the economy is turning around and noted that “one segment that is exhibiting strength is the housing market. Purchase demand activity is up over 20% from a year ago, the highest since January 2009.” Fannie Mae is similarly enthused, stating that record-low mortgage rates into 2021 will help prices and builds, plus they are contributing to the amount of 2020 refinances which has surpassed the highest levels of 2003. Every month, this will add billion more of consumer spending to boost the economy.
Some additional good news for the three major stock indexes which saw a rise in stock scoops while investors took advantage of bargains. This is coming off a recent dive but can be interpreted as risk sentiment being buoyed by more signs of economic recovery. When coupled with encouraging housing market news, and May is 2.5 million new jobs, plus retail sales spiking 17.7% in May, one can see that there are good forecasts out there. The Fed says it will buy corporate bonds to expand its support of the credit markets, including mortgages. There are reports of a $1 trillion infrastructure proposal inbound to further help the economy. Details will be available whenever the lawmakers come to an agreement on the contents and scope.
In Freddie Mac’s weekly Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate dropped to a new all time low. As always, mortgage rates are volatile, so please check with your lenders daily for up the minute information. Locking rates can seem like a gamble if you are not listening to your mortgage professional.
One last piece of forward-looking information, a recent survey concluded that 53% of homebuyers believe they will purchase in the next 12 months because of the pandemic. Many require more space, and most have expanded their radius due to continuing to work from home into the future. It will be interesting to see how everything pans out as we race towards a vaccine.
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