August is the New May for Homebuyers

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The usual robust spring selling season is being realized this summer according to realtor.com’s Housing Market Recovery Index released This Week in Real Estate. Homes sold 4 days faster year-over-year, at just 26 days, compared to last July fueled by available inventory down 35% resulting in mortgage activity up 22% compared to the same week last year. Below are a few newsworthy events from the second week of August that influence our business: 

When it Comes to Home Sales, August is the New May, Keeping Agents Busy. Rather than a typically busy spring home-buying season, the COVID-19 pandemic pushed the bulk of home-buying this year into the summer months, and real estate agents are busier than ever. According to the National Association of Realtors, contract signings kicked off strong in August, with the most contract signings last week in the Midwest, at 21%. The South followed, at 20%; the Northeast at 13%; but the West actually declined, by 4%. As new contract signings are outpacing new listings due to low inventory, properties sold typically within 26 days in the four weeks leading up to August 2, NAR said. Since homebuying season was pushed back from this spring, realtor.com’s Housing Market Recovery Index reported that August is the new May. Homes on the market sold four days faster year over year, as total inventory is down 35%.

Mortgage Applications Increase in Early August. Based on the Mortgage Bankers Association’s latest Weekly Mortgage Applications Survey for the week ending August 7, 2020, U.S. mortgage applications increased 6.8 percent from one week earlier. “Mortgage rates fell across the board last week, as investors grew less optimistic of the economic rebound given the resurgence of virus cases. Loan types such as the 30-year fixed, 15-year fixed, and jumbo all reached survey lows. Refi activity responded to these lower rates, with the refi share reaching almost 66 percent of all applications, its highest level since May. And the refi index jumped 9 percent, reaching its highest level since April, as both conventional and government applications for refinances increased,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Home purchase activity continued its strong run with a 2 percent increase over the week and was up around 22 percent compared to the same week a year ago.”

Housing Rebound: Year-over-Year Gains for June Single-Family Permits. Over the first six months of 2020 – and after the onset of the impact of the coronavirus – total single-family permits issued year-to-date (YTD) nationwide reached 433,484. On a year-over-year (YoY) basis, this is an 3.8% increase over the June 2019 level of 417,453. Year-to-date ending in June, single-family permits across the four regions ranging from an increase of 6.5% in the South to a decline of 1.7% in the Northeast. Between June 2019 YTD and June 2020 YTD, 34 states saw growth in single-family permits issued while 16 states and the District of Columbia registered a decline. 

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