With the current volatility of the market and uncertainty of how the industry will react, it is important to analyze data and understand what we are likely to face.
Thankfully, past data shows that even in these dark times, the housing industry looks hopeful for the future.
Check out this video for the current state of the market along with reasons we are optimistic for how the housing industry will move forward.
Rates
So where are rates headed over the next several weeks?
Rates remain extremely volatile, especially after the Fed has vowed to buy $50 billion worth of mortgage-backed securities each day this week.
Check out the link below written by one of the most knowledgeable people in the entire industry, Barry Habib.
Barry has an incredible reputation of predicting market trends which is why so many turn to him in such uncertain times.
In the article Barry breaks down what the Fed’s recent mortgage-backed securities has done to the industry, and why lenders are begging for them to stop: https://mbshighway.com/mortgage-crisis.html
Housing
While the mortgage industry navigates through the volatile rate changes, there is promising data that shows the housing industry will persevere even through such crazy times.
A high demand in the housing industry gave the industry a strong start to 2020. This makes us think that it will survive through these crazy times and pick up right where it left off.
Check out these insightful graphs to support the fact that demand is likely to remain into these next few months.
First, the low supply in 2020 (Figure 1) can be compared with a promising, high number of homes sold (Figure 2). This means that even as we begin the year with a low supply, people are still buying homes.
Figure 1
Figure 2
Another way to analyze the housing industry is by taking a look at housing formations, or the number of homes completed by builders.
In recent years, the number of household formations has steadily increased. This means that the demand is there and the supply has not been keeping pace.
While it may be a daunting time for all industries, there is data to support the fact that there is still hope for the housing industry.
The industry had a great start to 2020 which will help as the world navigates through the coronavirus devastation.
We believe there is light at the end of the tunnel, and if you keep pushing through, everyone will come out of this time stronger than they came in.
If you have any questions at this time please let us know. The Mortgage Mark Team is always here to help.
