Redfin: 27% of buyers intend to relocate

“Redfin notes that page views of homes for sale in towns with fewer than 50,000 residents saw traffic rise 87% year over year in May. That is nearly four times the 22% yearly increase in page views of homes in cities with more than 1 million residents.”

Redfin further reported that a “record 27% of home searchers at its site looking to move to another metro area in April and May.”

Premature to call a trend since it’s like predicting global relocations by tracking viewership of House Hunters International, but, definitely, watch this space...

Urban Institute: June chart book

Another series of excellent visualizations courtesy of the June Housing Finance Center Chart Book from the Urban Institute.

(1) The sudden jump in mortgage origination profitability during the second quarter, to the highest levels on record.

(2) The magnitude and rapidity of the Federal Reserve Board Agency MBS purchase program since March

 

GSE's (potential) move out of conservatorship

If the Trump administration could be commended for consistency and the ability to maintain focus, top on that list would be GSE reform.  Word has come that both GSE's have retained banks as advisors (Morgan Stanley by Fannie Mae and JP Morgan by Freddie Mac) for the purpose of “developing plans to boost capital, evaluating market impacts and timing and analyzing valuation” with the “aim of returning Fannie and Freddie to the private market and facilitate the road map out of government control.”

Hence, it's a good time to bone up on the myriad sticky issues around any move out of conservatorship for the GSE's. Former Freddie CEO Don Layton's post in the Joint Center for Housing Studies blog late last year would be an excellent place to start. In it, he refers to a paper that includes a make-believe memo with fourteen considerations to an investment banking exec who would conceivably be interested in assuming the lead underwriter role.  

One notable point - "The two GSE's together will need common equity well in excess of $100 billion between them.." By comparison, Saudi Aramco holds the title for the largest IPO in history at $25.6 billion.  Clear incentive for this massive job.  

Single women increasingly becoming homeowners

Single millennial women, better educated on average than their male counterpart, are more likely to own homes (+2.2% vs single millennial men) despite lower earning power. Given that home ownership is a major driver of wealth creation, that latter gap may soon be closing.

Homeowners are doing OK thus far...

As we receive word of further tailwinds in the housing sector, with the Mortgage Bankers Association reporting that purchase mortgage applications rose to the highest level in over 11 years, here’s a revealing chart that shows how homeowners have thus far under-indexed in the pain riven by this coronavirus driven recession (Source: Brickman, David of Freddie Mac and USC Lusk Center for Real Estate)

A bright spot mortgage forbearance, but...

While nearly 9% of US mortgage holders are in forbearance,  it's markedly less than Mark Zandi's prediction of 30% two months ago. And it's dropping, albeit by a minuscule 34k w/w as of June 2.

The next big data points will be: (a) the percentage of homeowners in forbearance who continue to make a payment in June - this statistic was 46% in April and 22% in May; and (b) the portion of homeowners with expiring 3-month forbearance plans who choose to extend.

Of course, we'll all be awaiting the potential continuation CARES Act, set to expire at the end of July, especially the extra $600 in weekly unemployment benefits, which has kept many afloat.