[REN #900] Real Estate News Brief: $3 Trillion Stimulus Bill, Surge in Mortgage Requests, $100 Surprise for a Landlord

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Real Estate News Brief: $3 Trillion Stimulus Bill, Surge in Mortgage Requests, $100 Surprise for a Landlord, Real Estate News for Investors Podcast Episode #900

In this Real Estate News Brief for the week ending May 16th, 2020… a $3-trillion relief bill that will help landlords, a new surge in mortgage applications, and a heart-warming rent payment story out of St. Louis.

Economic News

We begin with economic news from this past week, and House approval of a $3-trillion relief package that includes $100 billion for a national rental assistance program and $75 billion in mortgage relief for multi-family landlords. It also provides another round of stimulus checks for individual taxpayers, and almost $1 trillion to state and local governments faced with steep declines in tax revenue. It’s not clear how the legislation  will fare in the Senate. Senate Majority Leader Mitch McConnell recently said that the three coronavirus bills already approved are enough for the time being. (1)

The U.S. suffered another round of job losses but unemployment claims are slowing down. There were 2.6 million new claims for a total of 39 million since the pandemic began about two months ago. Millions have already returned to work leaving about 22 million people on current benefit lists. The unemployment rate is probably in the vicinity of 20%, according to MarketWatch. (2)

A drop in gas prices helped push consumer prices down 0.8% in April. Lower prices for clothing, hotel rooms, plane tickets, and auto insurance also contributed to the decline. The annual rate of inflation is now just 0.3%. That’s down from 1.5% in March and 2.5% at the beginning of the year. Prices were higher in a few categories including food, the cost of homeownership, and rent.

Price declines are not surprising given the pullback on shopping. The government says retail sales were down 16.4% in April. Two stores that saw minimal declines are home improvement stores Home Depot and Lowe’s. Those sales were down only 3.5%. Many consumer dollars are going to online sales. Those sales were up 8.4%.

Consumers are showing resilience in the midst of the economic upheaval. The University of Michigan reports that consumer sentiment was up slightly for April, from 71.8 to 73.7.

Mortgage Rates

Mortgage rates are still near an all-time low, but rose two basis points last week. Freddie Mac says the average 30-year fixed-rate mortgage is 3.28%. (3)

In other news making headlines…

Surge in Mortgage Applications

Consumers coming out of state lock-downs appear to be flocking back to the real estate market. The Mortgage Bankers Association reports an 11% increase in mortgage applications this last week.

It’s the fourth week in a row they were up, although they are still 10% lower than they were a year ago. New York is leading the nation for purchase demand followed by Illinois, Florida, Georgia, California, and North Carolina.

Sellers are Still Holding Back

Buyers are returning to the market more quickly than sellers in states that are reopening. Realtor.com says that new listings were down at an annual rate of almost 40% for the week ending on May 2nd. (4)

On the other hand, buyers wearing masks and gloves are showing up in droves to preview available homes. Although buyers are looking at properties online, many still want to see a home in person before they close on a deal.

Luxury Apartments Offering COVID-19 Antibody Tests

Luxury apartments are offering a new kind of amenity to put coronavirus fears to rest. Some are offering free antibody tests for COVID-19 along with free masks and gloves. It’s a new twist on amenities that supports healthy living and could make people feel more comfortable about in-house fitness classes and social gatherings.

But that emphasis on health is also taking another form. Instead of in-person activities, some apartment buildings are offering things like online cooking and workout classes, or Zoom-hosted wine socials. 

An Act of Kindness from One Tenant to Another

We have one more story that’s sure to pull at your heart strings, especially if you are a landlord. The National Real Estate Investing Association shared a story from a landlord in the St. Louis area. He had received rent from a tenant that included an extra $100 and a note. (5)

The note read: “Derrick, Hope all is well and you are staying safe! Times have been hard on most, leaving many without paychecks. I am fortunate enough to still be working. Enclosed is my rent and an extra $100 for another tenant who isn’t as fortunate. Thank you, Lacey.”

That put a smile on my lips. I hope it did for you too.

Links:

(1) HousingWire Article

(2) MarketWatch Article

(3) Freddie Mac Article

(4) Realtor Magazine Article

(5) Real Estate Investing Today Article

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