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Mark Hemingway

Mortgage Market Update for May 21st

Friday, May 22, 2020 - Article by: Mark Hemingway - Security Financial Services, LLC - Message

Nearly 39 million Americans have lost their jobs in the past nine weeks due to the economic shutdown. However, with many states reopening, Memorial Weekend upon us and the American spirit ready to go - the market response to the weak data is muted. Weekly Initial Jobless Claims came in at 2.438 million for the week ended May 16 while the previous week was lowered to 2.687 million from 2.981 million. The numbers have fallen since the record 6.867 million filed on Mach 27. This means with 157 million people in the U.S. workforce in February, nearly 25% of the workforce is without a job.

Mortgage rates remained near record lows in the latest week, reports Freddie Mac. The 30-year fixed-rate mortgage came in at 3.24% this week with 0.7 0n points and fees. Freddie Mac says as states reopen, we're seeing purchase demand improve remarkably fast, now essentially flat relative to a year ago. Going forward, mortgage rates have room to decline as mortgage spreads remain elevated.

Sales of existing homes plunged in April and year over year as the pandemic impacted sales. Existing Home Sales fell nearly 18% month-over-month and down 17% from April 2019 to an annual rate of 4.33 million units. The 4.33 million units was the lowest annual pace since September 2011. Housing inventories stand at a 4.1 month supply. "The economic lockdowns - occurring from mid-March through April in most states - have temporarily disrupted home sales," said Lawrence Yun, NAR's chief economist. "But the listings that are on the market are still attracting buyers and boosting home prices."

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