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Housing Market Resurgent in the Face of COVID-19

Commentary from realtor.com found that despite the impacts of COVID-19, a recession, a presidential election, and disputes over systemic racism, the housing market is not only rebounding but surging.

Realtor.com reported median home prices rose 6.2% annually for the week ending on June 27. Homes are selling faster than they did in 2019 and bidding wards are rising.

A prior Redfin report that more than half of its offers faced competition in June. Specifically, 54% of homes offer placed by the real estate agency’s representatives faced bidding wars. This marks the second consecutive month that the bidding-war rate for new home purchases has been on the rise.

"The housing recovery has been nothing short of remarkable," says Ali Wolf, Chief Economist of Meyers Research, a national real estate consultancy. "The expectation was that housing would be crushed. It was—for about two months—and then it came roaring back.”

Additionally, realtor.com revealed 61% of consumers said it was a good time to buy, according to data from Fannie Mae. This is a 9-percentage point increase from May. Also, 41% of respondents said it was a good time to sell—also a 9-percentage point increase from the past month.

That optimism translated to a surge of mortgage applications for home purchases. They rose 33.2% year over year in the week ending July 3, according to the Mortgage Bankers Association.

Another moment of optimism that came earlier this month was when Black Knight announced that active forbearance plans fell an additional 435,000 weekly—the largest drop since the onset of the pandemic.

As of July 7, 4.14 million homeowners were in forbearance plans, which represents 7.8% of all active mortgages—down from the prior week’s 8.6%. This represents around $900 billion in unpaid principal.

Black Knight stated that 6% of all GSE-backed loans and 11.6% of loans backed by the Federal Housing Administration and the VA are currently in forbearance plans. An additional 8.2% of loans in private-label securities (PLS) are also in forbearance.

GSE loans saw the largest declines in forbearances, falling by 200,000—an 11% drop. Portfolio and PLS also fell by 11%, which is 136,000 fewer active forbearance plans.

FHA and VA loans saw marginal improvements, dipping 6% for a reduction of 93,000.

"This latest decline in the number of homeowners in active forbearance is an encouraging sign of continued improvement,” said Andy Walden, Economist and Director of Market Research for Black Knight. “The reduction of roughly 435,000—the largest single-week drop yet—was driven at least in part by the fact that more than half of all active forbearance plans entering the month were set to expire at the end of June. While the majority of those have been extended, this week's data suggests a significant share were not."

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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