In March, the Pending Home Sales index of contracts signed on existing homes dove 20.8%. When those contracts are counted as closings in April, expect a similar drop in Existing Home Sales.
Freddie Mac’s chief economist observed, “rates at record lows…are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April.”
Even better, the Mortgage Bankers Association reported a 12% bump in purchase applications, “potentially a sign of the start of an upturn in the pandemic-delayed spring homebuying season, as coronavirus restrictions slowly ease.”
REVIEW OF LAST WEEK
GOOD NEWS, BAD NEWS… Good news: stocks ended April with the best monthly gain in more than 30 years. Bad news: stocks started May down for the week following China tariff fears and corporate earnings disappointments.
The President said he may impose more import tariffs on China for how it’s handled the COVID-19 outbreak, while some tech giants, thought to be immune from the pandemic’s economic impact, missed expected earnings.
Positive news: while states started to reopen, the FDA approved remdesivir for emergency use as a treatment for COVID-19, and the Fed signaled rates will stay down longer and expanded its Main Street Lending Program.
The week ended with the Dow down 0.2%, to 23,724; the S&P 500 down 0.2%, to 2,831; and the Nasdaq down 0.3%, to 8,605.
Fed comments and sinking stocks sent buyers to bonds. The UMBS 4.0% ended UP 0.15, to $106.59. Freddie Mac’s Primary Mortgage Market Survey reported the lowest national average 30-year fixed mortgage rate in the survey’s history, dating to 1971. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?… Evidence of the strength of the economy before the COVID-19 shutdown can be seen in the homeownership rate, which, in the first three months of 2020, rose to 65.3%, its highest level in nearly seven years.
