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Expert Update - 05.29.2020

DECADE DROP

Existing home sales figures were ugly in April, dipping to their lowest levels since July 2010 according to the National Association of Realtors® (NAR). The numbers show a 17.2% year-over-year decline and a 17.8% drop between March and April. NAR Chief Economist Lawrence Yun said, “The economic lockdowns have temporarily disrupted home sales. But the listings that are on the market are still attracting buyers and boosting home prices.”

 

FORWARD FOCUS

Though many housing stats look grim, the bigger picture is more upbeat according to First American Financial Corporation Chief Economist Mark Fleming. Speaking to Yahoo! Finance, Fleming said, "Monthly data that looks back 3-4 weeks is old news. We know from the faster moving data - mortgage applications, showings, bidding wars - that April really was the trough, I think, for the housing market. We do expect the rebound to be quite strong in the May numbers that will come out at the end of June."

 

FURTHER FALLBACK?

Rates for a 30-year fixed rate mortgage have stayed below 3.30% for four consecutive weeks according to Freddie Mac's Primary Mortgage Market Survey for the week ending May 21. Freddie's analysts asserted that they're seeing a remarkably fast increase in home purchase demand as states reopen and, "Going forward, mortgage rates have room to decline as mortgage spreads remain elevated."

 

MALL (FORE)CLOSING?

The Mall of America (MOA) has skipped two months of payments on its $1.4-billion mortgage. At 2,777,089 square feet, MOA is the biggest shopping center in the U.S. The mall shuttered in March along with many retail and commercial facilities as the country took measures to curb the spread of coronavirus. Mall officials noted that many tenant stores stopped paying rent in April.

 

Sources: National Association of Realtors®, First American Financial Corporation, Freddie Mac, covid19data.com

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