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Expert Update - 06.26.2020

Bidding War During the Pandemic

A new study from Clever revealed that 42% of homebuyers who made a purchase during the January to May time period ended up in a bidding war, demonstrating the strong demand for homes amid low inventory. In addition, the study showed the strains caused by COVID-19 shutdowns, which resulted in record-breaking numbers of workers filing for unemployment. According to Clever, 59.29% of homeowners who purchased their home before the World Health Organization declared the pandemic said that someone who typically contributes to housing costs lost their jobs during the pandemic. Meanwhile, those who purchased their home since March (50.48%) were less likely to have lost a job, while stimulus check payments contributed to down payments for 21.1% of homebuyers. Clever said that 84% of homebuyers who purchased their home before April 28th were able to pay their mortgage in full. Of recent homebuyers, 55% said they’re paying their mortgage in full, but only 45% are able to pay if a financial contributor has lost their job.1

Retail Sales Partially Bounce Back as the Economy Reopens

Retail sales and food services rebounded in May from the steep declines seen in March and April, recovering almost two-thirds of the previous months’ declines, according to the Census Bureau. Motor vehicle sales jumped 44.1% and sales at gas stations rose 12.8%. Sales at building supply stores jumped 10.9%, a positive sign for residential fixed investment. Core retail sales (excluding food services, auto, building supplies, and gas stations) rose 11.0%, the largest increase in series history. This was driven by large increases in sales at clothing stores, non-store retailers, and furniture stores.2

Purchase Applications Reach Highest Levels in 11 Years

A seasonally adjusted index measuring purchase applications jumped 8% last week, according to a report from the Mortgage Bankers Association. While the week prior saw the seasonally adjusted index rising to its highest level since January, this week the MBA reported the highest level in over 11 years. Just as mortgage applications increased, applications for refinancing’s also rose 10% from the week prior, signaling the second gain for refinancing in two months. “The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.3

Pandemic Spurs Interest in Backyard Coops

Google searches for backyard coops to raise chickens reportedly have been on the rise since the beginning of the COVID-19 pandemic. Homeowners are exploring ways to have access to fresh eggs in a time when visiting the grocery store has become more stressful and food shortages grow. “Interest in some of my chicken articles has gone up over 500% since the end of February,” livestock expert Shelby DeVore, founder of Farminence, told realtor.com®. “I’ve also had a huge response from people reaching out and looking for advice.” Chickens are affordable and relatively low-maintenance, and don’t require a lot of space, DeVoer says. “It’s a great way to become a little more self-sufficient without committing to an all-out homestead or completely self-sufficient lifestyle.”4

              

Sources: 1HousingWire, June 17; 2Fannie Mae, June 18; 3HousingWire, June 17; 4National Association of Realtors®, June 18

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