Housing Market Booming Despite Record High Unemployment
BREAKING NEWS: Housing Market Booming Despite Record High Unemployment
Housing Market Booming despite record-high unemployment and the coronavirus outbreak:
- Never in history has the housing market been so hot despite economic uncertainty and a presidential election in just a few months
- Over 50 million Americans have filed for unemployment due to the coronavirus outbreak
- With only a handful of states that are mismanaged such as Illinois and New York, most states do not have homes for its demand by homebuyers.
- The demand for homes far exceeds inventory
- Builders are thriving
- Homebuilders are picking up any available parcels at a premium
- This is due to having inventory of homes sold out even before breaking ground
- Historic record mortgage rates are adding fuel to the fire on the demand for homes
- The coronavirus outbreak created changes by employers in promoting remote jobs
- Now homebuyers are not stuck in one geographical location to purchase a home due to work
- Remote workers can exit their high taxed state to lower-taxed states with a lower cost of living and affordable history
In this breaking news article, we will discuss and cover how the Housing Market Booming Despite Record High Unemployment.
Housing Market Booming Despite Analysts Expectations
Housing Market Booming Despite Record High Unemployment and the gloomy forecasts by experts and economists.
- Economists predicted the 2020 housing market will be depressing due to the coronavirus pandemic and record-high unemployment numbers
- However, the housing market is booming like never before in history
- The housing market is better today than it was prior to the coronavirus outbreak hit the U.S. economy
- The booming housing market is keeping the economy moving in a positive direction despite the COVID-19 pandemic outbreak
Jammi Cash of Gustan Cho Associates is a housing market expert and vice president. Jammi Cash who has been following the housing markets and the U.S. economy said the following:
While the $34 trillion markets faltered at the start of the pandemic, its rebound has far outperformed expectations, with existing home sales surging over 20 percent in June, according to data released Wednesday. Some areas of housing are actually doing better than they were before the coronavirus began sweeping the U.S. The market’s already enormously pent-up demand has been stoked by the crisis, despite soaring unemployment. White-collar employees — many of whom are able to work from home and keep getting paychecks — are buying. And analysts believe the pandemic has prompted some millennials, now reaching the prime age for buying first homes, to pull up stakes in crowded cities and head for the suburbs. Securing a home loan, meanwhile, is cheaper than ever, with mortgage rates hitting historic lows thanks to the Federal Reserve’s easy-money policy. The market’s performance has been admittedly shocking, amazing, considering that typically when you have surging unemployment, housing activity tends to fall. That tends to be the case going all the way back to World War II. Housing-related expenditures make up about 15 percent of GDP, so the industry’s current strength is alleviating some of the stress on the broader economy less than four months before President Donald Trump — whose own family made their fortune in housing — faces reelection. To be sure, that could change quickly as more states are forced to go back into lockdown amid a resurgence of the virus. Already, the regions where housing has been strongest — a staggering 47 percent of existing-home sales in June were in the South — are now facing significant new outbreaks. If [states] lockdown again, the expectation, certainly on the purchase side, is that activity would fall very, very quickly. Housing is clearly showing a V-shaped recovery even though the rest of the economy is not.
Many so-called housing experts were so wrong. Many predicted another housing meltdown worse than the 2008 financial crisis. Others predicted another Great Recession as well as a major housing meltdown. They were wrong. The housing market cannot be stronger.
Jammi Cash continued:
Home construction jumped 17 percent in June, according to Census Bureau data, while permit applications to build single-family homes rose almost 12 percent. And mortgage applications were up 19 percent in the week ending July 17 over a year ago. Part of housing’s strength comes down to demographics, as millennials, who make up the largest share of the population, enter the market to buy homes. And while double-digit unemployment would normally dampen demand, the current downturn is heavily lopsided toward certain lower-wage sectors, like the hospitality and food-service industries, whose employees are more likely to rent. It looks like a lot of the purchase activity is from first-time homebuyers. It seems to be either, you’re in a sector of the economy that is able to work just fine remotely, or you’re not.” Indeed, first-time buyers accounted for 35 percent of the purchases of existing homes in June.
Record Mortgage Rates Are Keeping Lenders Busier Than Ever
Mortgage lenders are busier than they have been in decades. There is not a loan officer that is not flooded with business. Most loan officers are working 80 hour weeks. Most mortgage processors, mortgage underwriters, and support staff are working at least 20 or more hours of overtime per week. Typical turnaround times from pre-approval to closing used to be 3 weeks. Now, due to the massive volume of loan applications, the turnaround times are averaging 45 to 60 days on purchases and 90 days for refinances. The average loan size on a mortgage loan application registered at $357,000. Mortgage rates hit another all-time low. Mortgage rates for a 30-year fixed-rate mortgage are now at 2.96% for prime borrowers. Mortgage rates for a 15-year fixed-rate mortgage are now at 2.625%. Gustan Cho Associates has seen a surge in refinance mortgage loan applications. We have all of our licensed and support personnel working overtime and weekends. We are hiring loan officers, processors, mortgage underwriters, and support staff. GCA Mortgage Group does not see any increase in mortgage rates for the next 18 months.