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Please enjoy this quick update on what happened this week in the housing and financial markets.

 

 

Mortgage rates continue to hit record lows, and mortgage applications point to a remarkable recovery in homebuying. Purchase apps rose 6% last week, only 1.5% lower than a year ago.

More than 8% of U.S. mortgages are now in forbearance, equating to roughly 4.1 million borrowers. However, the number of people needing such help is slowing.

Initial jobless claims remained high last week as backlogs are being cleared, but they continued their week-too-week decline. More layoffs are expected.

 

Homebuilder confidence showed signs of bouncing back in May, after a record plunge in April. Although still in negative territory, the NAHB Housing Market Index was up 7 points.

April existing home sales dropped 17.8% month-to-month and were 17.2% lower than April 2019. That puts the annualized pace at 4.33 million units, the slowest since September 2011.

The drop in available home inventory pushed home prices to a new record high. The median price of an existing home sold in April rose 7.4% annually to $286,800.

 


Please enjoy this quick update on what happened this week in the housing and financial markets.

 

Consumer prices saw their largest drop ever in April, as the economy reeled from restrictions imposed to control the coronavirus. The CPI excluding food and energy fell 0.4%.

Producer prices also tumbled in April, the largest annual decline since 2015. The data could bolster some economists' predictions for a brief period of deflation to come.

Initial jobless claims came in last week at 2.981 million. The number is down from 3.176 million the week before, the 6th straight weekly drop.

 
 

The number of loans in forbearance has continued to grow, reaching more than 4 million between the GSEs and FHA/VA/USDA. This doesn't include jumbo or other privately held loan types.

Homebuilders are offering more discounts and free upgrades to attract buyers. Builders are hoping to move more inventory by sweetening the pot.

Despite the COVID pandemic and huge unemployment numbers, tenants are keeping up with their rent. More than 80% of renters nationally made a full or partial payment for the month of April.

 

Please enjoy this quick update on what happened this week in the housing and financial markets.

 

The U.S. services sector contracted for the first time in about a decade last month, as the coronavirus pandemic brought economic activity to a screeching halt.

Household debt increased to a total of $14.3 trillion last quarter, the 23rd straight quarterly increase. Mortgage borrowing rose by $156 billion to $9.71 trillion.

Jobless claims came in at 3.17 million last week, bringing the 7-week total to 33.5 million. Despite huge numbers, the weekly decline in initial claims is a positive sign.

Over 3.8 million homeowners are in forbearance plans, representing 7.54% of all mortgages. The good news is that forbearance requests are now coming in more slowly.

A new study by ATTOM Data Solutions shows that May and June are the best months to sell a home, based on a study of 33 million single-family home sales from 2011-2019.

New-home transactions have reportedly doubled in the last two weeks as millennials from 31 to 40 years old show an increasing desire to buy.

 

 


There are a lot of moving parts when it comes to buying a home and it can be confusing (especially for first-time home buyers). One frequently misunderstood area is closing costs. Many homebuyers think that saving for their down payment is enough to buy the house of their dreams, but what about the closing costs that are required to obtain a mortgage? 
 
How do you find out what your closing costs will be?
 
By law, a homebuyer will receive a loan estimate from their lender 3 days after submitting their loan application and they should receive a closing disclosure 3 days before the scheduled closing on their home. The closing disclosure includes final details about the loan and the closing costs. Make sure to double-check they (closing disclosure and loan estimate) are what you agreed to.
 
But what are closing costs anyway?
 
According to Trulia: “Closing costs are lender and third-party fees paid at the closing of a real estate transaction, and they can be financed as part of the deal or be paid upfront. They range from 2% to 5% of the purchase price of a home. (For those who buy a $150,000 home, for example, that would amount to between $3,000 and $7,500 in closing fees.)”
 
Keep in mind that if you are in the market for a home above this price range, your costs could be significantly greater. As mentioned before, closing costs are typically between 2% and 5% of your purchase price. Trulia continues to give great advice, saying that: “…understanding and educating yourself about these costs before settlement day arrives might help you avoid any headaches at the end of the deal.”
 
What do closing costs include?
 
By now we know that when it comes to buying a new home there are many costs involved. But, what exactly do closing costs cover? They pay for expenses when buying a home that are charged by a myriad of vendors, government entities and your lending institution — all of which played some key role in securing you your new home. In addition, closing costs are payable with your down payment, but they are separate fees. The list of closing costs fees is lengthy. Some fees included are:
 
  • Appraisal
  • Attorney
  • Closing
  • Credit report
  • Title
  • Underwriting and processing fees
  • Private mortgage insurance (PMI)
  • Property tax
  • Recording fees
  • And much more
Be sure to ask your Loan Officer for a detailed list.
 
Will there always be closing costs?
Yes, there are always closing costs. Whether you're the buyer or the seller or even refinancing, you're going to have closing costs.
 
Learn More About Financing Your Closing Costs in this video here with Erin The Expert. 
 

 

Beware of the Pre-Loan Worksheet
Sometimes, a loan officer will use pre-loan worksheets to their advantage. Why? Using this form is a way in which a Loan Officer can pitch fees before the loan estimate and early on in the mortgage process to their borrower. In turn, they often put unrealistic fees on the pre-loan worksheet, making it look attractive to the borrower. At this point, the borrower is far into the mortgage process and hooked with the Loan Officer.
 

 

Bottom Line
Closing costs may not be the most attractive part of buying a home or refinancing your current mortgage, but it's a small price to pay for the benefits that a home loan provides. Speak with Erin the Expert early and often to determine how much you’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.
 
Find out how much you qualify for by applying for home loan with us today. It only takes a few minutes!
 
 

Please enjoy this quick update on what happened this week in the housing and financial markets.

 

The Fed met this week, leaving policy rates unchanged as expected. The Fed committed to continue buying bonds, which should help keep rates low.

The 1st qtr GDP declined more than expected, down 4.8% versus estimates of 3.5%. This was the first negative reading since 2014, though not as bad as the worst of the financial crisis.

Jobless claims remain elevated as another 3.8 million people filed for unemployment last week. That brings the total to more than 30 million filings in the last 6 weeks.

 

According to Case-Shiller, home prices gained 4.2% in February, reflecting the strength of the housing market before the economy shut down to stem the spread of COVID-19.

Pending home sales were down 21% in March. The NAR says this is a temporary issue due to the coronavirus induced shutdown, while most of the country shelters at home.

Homeownership reached an 8-year high before the coronavirus. More than 65% of Americans owned a home in the 1st qtr of this year. Homeownership has been on an upswing since 2016.

 
 

 


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