Today I was interview by Lisa Abramowicz and Paul Sweeney on the state of the housing market.
Podcast here: https://www.bloomberg.com/news/audio/2020-05-08/low-income-renters-pose-most-risk-to-housing-market-now-radio
A few points here
1. The massive job loss we see today impacts the renting section of the housing market more than homeowners. The obsession with the housing bubble 2.0 thesis has fostered a lot of undisciplined economic theories that somehow low wage workers were homeowners in the last expansion. Come on, folks, wake up to reality now. This is the area where we should be focusing a lot of help now.
2. Listing and sales are falling year over year noticeably. The next existing home sales report will have the full impact of Covid19. However, in the last 2 weeks, we have seen purchase application data go positive week to week while the year over year declines have been noticeably less. I will be talking primarily about this topic next week on HousingWire and why June’s existing-home sales report that will come out in July will be critical.
2020 Mortgage Purchase Application Heat Months Tracker: 3rd straight week of the lower year over year % declines and 2nd week in a row of positive gains week to week.
BC data
+8%
+17%
+11%
+16%
+10%
+10%
+10%
+12%
+11%
AD Data
-11%
-24% –
-33% –
-35% <- So far the peak % decline
-31%
-20%
-19%
AD avg -24.7%
More on this subject here written before the most recent purchase application data.
3. Housing tenure is over 10 years now, and sellers are not forced to sell their homes yet. The foreclosure crisis some are talking about is the 2021 storyline. You need to be patient with housing data but know that the deflationary turmoil we see in housing is on the renter side of the equation more than homeowners.
21.2% unemployment rate for those who have less than a High School diploma.
8.4% For those who have a Bachelors’s degree or higher.
https://www.bls.gov/…/unemployment-rates-for-persons-25-yea…
Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data daily on his Facebook page https://www.facebook.com/Logan.Mohtashami and is a contributor for HousingWire.