In this Real Estate News Brief for the week ending October 10th, 2020… Fed Chief calls for more stimulus, the job market recovery cools off, and a haunted house appears on Zillow.
We begin with economic news from this past week, and comments from Fed Chief Jerome Powell about the need for more stimulus. In a speech to the National Association for Business Economics, he said it’s better for Congress to offer too much support than too little. He said, “Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses.” He says, help is needed because the economic outlook is highly uncertain.
When asked if he’s worried about inflation because of the high amount of stimulus he said that deflationary pressures persist all around the world. He said, “It’s appropriate for central banks and certainly the Fed to take that into account.”
It’s unclear when Congress and the White House might agree on a new pandemic relief plan. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have been engaged in on and off talks for months. House Democrats approved the $3.4 trillion Heroes Act in May, which Republican members of the Senate soundly rejected. In more recent developments, House Democrats proposed a more modest $2.2 trillion package. Republican negotiators for the President were about to counter that with a $1.8 trillion plan when President Trump interjected, and said he wants an even bigger stimulus package than the Democrats. (1) That’s a complete about face from an announcement he made just a few days ago, to halt all negotiations until after the election. There are new surprises every day as we get closer to November 3rd.
Meanwhile, the employment situation continues to improve, but the job market recovery is going more slowly than a few months ago. Weekly jobless claims dipped slightly to 840,000. That’s 9,000 less than the week before, and about 20,000 “more” claims than economists had forecast. Another 460,000 people also applied for benefits under the Pandemic Unemployment Assistance Act, so the grand total of new claims is more than 1.25 million.
As for continuing claims, there are about 25 million people getting unemployment checks from both state and federal sources. That’s down from 32 million at the peak of the pandemic. A report on hiring and job openings is further proof that the job market recovery has cooled off. The Labor Department says that job openings dropped from 7 million in March to 6.7 million in July and then to 6.5 million in August. (2) Hirings were flat in August but only because the numbers included 250,000 temporary Census workers.
Mortgage rates are a more positive part of this update. Freddie Mac says the average 30-year fixed-rate mortgage dipped one basis point this last week, to 2.87%, so it’s still under 3%. The average 15-year fixed-rate loan is 2.37%.
In other news making headlines…
Mortgage Delinquencies Remain High
Mortgage delinquencies are expected to remain at pre-pandemic levels until March of 2022. Many homeowners are protected by forbearance programs right now, but Black Knight says, more than one million could be in trouble as soon as next March when many of the 12-month forbearance programs expire.
More than 6 million borrowers were given forbearance because of the pandemic. Almost 2.5 million have exited those plans. Most of those loans are now performing, but some borrowers have paid off their mortgage through refinancing deals or the sale of their homes. About 250,000 borrowers are working with lenders on loss mitigation. Americans have the highest amount of equity than any time in U.S. history, so delinquent borrowers also have something to work with as they talk to lenders.
Multi-Family Rent Tracker
The latest report on multi-family rent collection shows that 79.4% of all apartment households made a full or partial payment by October 6th. (3) According to the National Multifamily Housing Council data, that’s the same amount that had paid by October 6th of last year, before the pandemic. It’s also better than last month, when 76.4% had paid by the 6th.
A nationwide eviction moratorium protects many renters who can’t meet their rent obligations, but that hasn’t stopped landlords from filing eviction cases. According to the Private Equity Stakeholder Project, more than 3,500 eviction cases were filed by corporate landlords since the government announced the moratorium on September 1st.
Zillow Listing for Haunted House Movie
If you’re looking at homes on Zillow, you might just stumble across a haunted house. (4) Netflix partnered with Zillow to post a home that’s featured in a series called “The Haunting of Bly Manor.” The listing describes Bly Manor as “a perfectly splendid 17th-century home in the English Countryside. The Manor is currently inhabited by the remaining members of the Wingrave family and their staff, who welcome guests of all ages and backgrounds to stay as long as they’d like.”
While the listing doesn’t describe anything too scary in the text, the photos do include a few footprints heading upstairs, and a pair of high-heeled shoes next to a mist-covered lake. The series launched on October 9th, just in time for Halloween.
(3) Multifamily Rent Tracker: National Multifamily Housing Council