I called it a Stunning Recovery on Monday, and they used the same words today. Coincidence? 🙂 Hat tip Mitch!
If mortgage demand is an indicator, buyers are coming back to the housing market far faster than anticipated, despite coronavirus shutdowns and job losses.
Mortgage applications to purchase a home rose 6% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Purchase volume was just 1.5% lower than a year ago, a rather stunning recovery from just six weeks ago, when purchase volume was down 35% annually.
“Applications for home purchases continue to recover from April’s sizable drop and have now increased for five consecutive weeks,” said Joel Kan, an MBA economist. “Government purchase applications, which include FHA, VA, and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months.”
As states reopen, so are open houses, and buyers have been coming out in force, if masked. Record low mortgage rates, combined with strong pent-up demand from before the pandemic and a new desire to leave urban downtowns due to the pandemic, are driving buyers back to the single-family home market. It remains to be seen if this is simply the pent-up demand or a long-term trend.
Link to CNBC Article
From an agent in Manhattan:
Four years ago I met a 95 year old couple – they wanted to downsize in their Upper East Size pre-war building. I had a pre-war off market listing – but it needed a gut renovation. He and his wife of 75 years walked around the apt looking this way and that – saying – we could take this wall down, do that…. I couldn’t believe my eyes and ears… How open were they? Most would have cringed.
In the end, the neighbor bought the unit to combined with theirs – but I never forget the 95 year old’s response to my question: How is it that I have 40 year old clients who are afraid to do work, but at 95 you’re both so vibrant, full of love and say you’re ready to downsize and renovate if you need to?
His Response: “You see Tony, at our age we have lived long lives and we have lost most of our friends we came up with over the years. My wife and I have always been curious people. We’ve always wanted to grow and learn from life and each other and from people we found interesting. It’s kept us young and engaged. What we saw happen with our friends however, is that we saw them all build a life towards and to “Comfort”. Their whole life objective until about 50 to 55 was to get to a place that felt ‘comfortable’. Then, once achieving whatever their idea of “success” or “comfort” was, they seemed to spend the rest of their lives trying to hold onto comfort.
In so many friends it felt that it was that holding onto comfort which did them in in the end. By staying stuck in that position, they stopped growing and learning and living. We just love to live and experience life. I guess that’s just us. We’ve always been that way.”