Mortgage News for May 1st, 2020

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.