There’s no question that everything from home tours to hand-washing has been upended by the COVID-19 pandemic. Just how big has the impact been? We wanted to get into some of the most interesting numbers to see what’s already happened and what the experts think will happen next.
Drop in US new home construction starts in March
Marking its biggest drop since 1984, multifamily construction slowed by 32 percent and single-family by 17.5 percent. Along with job losses and rising debt, this spells even more negative news for U.S. housing affordability.
Jump in agents using Zillow’s 3D home tour feature
With the buying experience going almost entirely virtual, agents are scrambling for new ways to market and show their homes. They are seeking out technologies and platforms that allow them to comply with social distancing guidelines while still conducting open houses and showings.
Uptick in Redfin video home tour requests
Similarly, motivated buyers are still looking for ways to see homes that they’re interested in, requesting video home tours and participating in FaceTime tours from their agents.
Credit score and 20% down payment for Chase mortgage
Chase was among the first to raise its credit score and down payment requirements for new borrowers, reflecting the lender’s desire to offset increased risk presented by COVID-19-related job losses and anticipated post-quarantine foreclosures.
Window on appraisals for FHA, USDA, VA, and Fannie Mae and Freddie Mac-backed loans
In an effort to loosen up lending, the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency announced that they would be providing increased appraisal flexibility, including extended timelines and allowing “any combination of property inspection, asset records, photographs, property sketches, and recorded media.”
Fannie Mae forecasted mortgage rates for 2021
In its most recent report, the organization’s economic and strategic research group predicted the average rate for a 30-year, fixed-rate mortgage will hit 2.9 percent in 2021. After a significant market correction this year based on COVID-19 job losses and market uncertainty, they anticipate a strong rebound with an accompanying rise in mortgage originations.
NAR members reported being able to complete all aspects of transactions while respecting social distancing
With online and mobile applications dedicated to electronic signatures, transaction coordination, and other aspects of the closing process, as well as special dispensation from state and local authorities, many agents were able to continue serving clients throughout both the buying and selling process.
Buyer and seller attitudes
Buyers who are delaying home purchases
According to NAR, agents reported that most buyers are putting off their process for a couple of months or until COVID-19-related stay-at-home orders are lifted.
Buyers who are expecting a decline in home prices
Along with delaying their home purchases, NAR members say many buyers expect greater affordability once they do decide to buy. Among those who expect lower prices, the majority anticipated price decreases of 5-10 percent.
Sellers who are delaying listing their home
Similarly, the majority of sellers planning to take advantage of the spring market to list are now planning to wait. Of those who have already listed, 93 percent have stopped open houses and requested additional precautionary measures for buyers or home inspectors entering the home.
Real estate investment
Property managers polled by NAR reporting tenants unable to pay rent or seeking to terminate leases
Of these, 47 percent planned to accommodate late payments due to the circumstances, while 20 percent said that they would have trouble allowing late payments. By contrast, nearly half as many individual landlords (39 percent) reported late tenant payments or lease terminations.
Number of Zillow Offers markets where homebuying was suspended
Along with other iBuyers, Zillow Offers suspended homebuying to preserve capital. Redfin’s CEO said its suspension was due to the difficulty of accurately pricing homes, while Opendoor blamed safety concerns. Zillow had already put the brakes on the pace of its homebuying in recent weeks while sales accelerated.
Approved new funding for small business loan program
After money for its Paycheck Protection Program ran out in a little more than two weeks — due in part to its payment to large businesses — the Senate, followed by the House, approved new funding as part of the $484 billion relief bill, which was then signed into law by President Trump. The Small Business Administration began taking loan applications on Monday. After complaints emerged about glitchy application systems and difficulty applying as independent contractors, some lenders have stepped in to help facilitate and streamline the process.
Real estate received as small business loan program runs out of gas
Representing just over 3 percent of the funds lawmakers had earmarked for small business owners, the real estate and rental industry ranked in 10th place out of 20 industry sectors applying for emergency funds. The construction industry was the largest recipient of funding in the first round of relief.
Christy Murdock Edgar is a realtor, freelance writer, coach and consultant with Writing Real Estate. She is also a Florida Realtors faculty member. Follow Writing Real Estate on Facebook, Twitter, Instagr