The housing market is hot because of lower mortgage rates, but the luxury market may remain soft due to jumbo loan issues.
As expected, economic activity collapsed in the second quarter due to the total virus-lockdown in April and only partial re-openings in May. The GDP contraction of 33% on an annualized basis is the steepest ever experienced in the U.S.
According to the Census Bureau's Residential Vacancies and Homeownership report for Q2 2020, the homeownership rate increased by nearly 4 percentage points, to 67.9%.
NAR has analyzed the ability of mortgage holders to meet their mortgage payments by state, age group, and income.
As jobs recover, the fraction of purchase contract terminations has started to decline again.
Layoffs are still happening, with 1.4 million new filers for unemployment insurance, an increase of 110,000 from the prior week. This seems to be because of the re-closing of business activity in some states (such as no indoor dining).
Interest rates inched up slightly, to 3.02% on a 30-year fixed-rate mortgage, but they are essentially at near-record-low levels. The housing market is hot because of the lower mortgage rates, but the luxury market may remain soft due to jumbo loan issues.
The share of first-time buyers increased in March through June—right into the heart of the pandemic period and the surge in unemployment—and is now trending higher than the 29% to 32% average in past years since 2012.
Housing market activity this June jumped 20.7% from May 2020, and June’s sales of existing homes dropped 11.3 % from June 2019.
At the national level, housing affordability showed signs of improvement in May 2020 compared to a year ago but fell compared to April.
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