Weekly News (July 28, 2021)
This week’s Interest Rate (29th Week)
(By Fairway Home Loan)
|30 yr fx(%)||15 yr fx(%)||FHA(%)||10 yr Tr Y (%)|
|A year ago||2.875||2.375||2.625||0.595|
|A month ago||2.875||2.125||2.490||1.485|
Prime Rate:3.0% / Ref IR: 0.00- 0.25%
- Potential home buyer — Have a pre-approval first before the shop. Now we have 48hour underwriting turn-around times for regular loans.
- 2021 Conventional loan limit: Conforming SFR : $548,250/ Conforming high balance: $882,375/ Confirming 2 Family: $702,000/ Confirming High Balance: $1,053,000
New Jersey renters protected longer
- Although July marks the end of the federal moratorium on renter evictions, New Jersey renters behind on rent are protected from lockouts for a longer period depending on their income.
- Renters who made under $99,000 in 2020, or couple who made under $198,000, would be protected if they signed a declaration under the penalty of perjury that if they were evicted, they would likely become homeless or be forced to live in crowd quarters, and that they were trying to make partial rent payments. New Jersey renters will remain protected after Saturday under the longer lasting moratorium, though a bill on Gov. Murphy’s desk may move up the timelines for higher-income families. A bill on Murphy’s desk that he is expected to sign soon will move up the end of date to Aug 31, 2021, for families make more than 80$ of their county’s median income and who have missed rent payments, were habitually late with rent or refused to pay a rent increase during protected period.
- No person can be displaced from their home through Jan 1, 2022, under an executive order Murphy signed in Mar 2020.
New Help Aims at Foreclosure Risks
- Biden Admin announced a program on Friday that would allow borrowers with loans backed by the FHA and other federal agencies to extend the length of their mortgages, locking in lower monthly principal and interest payment. About 75% of new home loans are backed by the federal government, according to the Urban Institute.
- About 1.55M home owners are seriously delinquent – meaning they haven’t made mortgage payments in at least 90 days, according to mortgage-data firm Black Knight Inc. These borrowers, the bulk of whom have forbearance plans, represent about 2.9% of the 53M active mortgages.
- Many borrowers who postponing payments have FHA loans and typically have lower incomes and make smaller down payments than people with other government-backed loans, such as those guaranteed by Fannie and Freddie.
Red Tape Complicates Tenant Protection
(WSJ 7/24 )
- State and local governments are struggling to distribute $47B in federal money aimed at helping tenants who can’t pay rent because of the Covid-19 crisis, leaving many people at risk of being thrown out of their homes when an eviction moratorium expires on July 31. Meanwhile, many landlords have been squeezed because they have been unable to collect, but remain on the hook for taxes, maintenance and other bills.
- Problems distributing the funds – which can be used to cover back rent, future rent and utilities – often stem from bureaucratic bottlenecks. Among other administration processing burden, a key sticking point: verifying applicant’s income with either last year’s tax return or two months’ paycheck documentation.
- About 8.2M adults were behind on their rent or mortgage as of July 5 and have low confidence they can pay on time next month, a Census Bureau survey showed.
- Even in a healthy economy, about 300,000 tenants in U.S. face eviction each month, according to Princeton University’s Eviction Lab.
Residential Sales have reached to the pre-pandemic level
(Korea Daily 7/24 )
- According to NAR report, sales in June has increased 1.4% from the last month to 5.86M while it was 22.9% up compared to the last year. Since sales in Feb, 2020 was 5.7M, it is noted that sales level is recovered as pre-pandemic one.
- Also, Inventory increased 3.3% in June from May to 1.25M, according to the same report.
- Still there are severe competition in the market because 1. Historically low interest rate 2. More millennial G buyers to buyer market 3. Strong buying demand for lower prices houses in urban area Wall street investors’ purchasing competition.
Home prices went up 16.6% in May
(Korea Times 7/28)
- According to CNBC on 7/27, SP CoreLogic home index went up 16.6% in May compared to a year ago, while it was 14.6% up in April. It is the highest increase rate since 1987 when they started collecting the data.
- The 10 cities index increased 16.4% and the big 20 cities index increased 17% while Phoenix went up 25.9%, San Diego 24.7%, Seattle 23.4%.
Foreign home buyers decreased 27%
(Korea Times 7/28)
- According to NAR report, total home buying amount by foreign buyers between April 2020 and March 2021 decreased 27% to $54.4B, which is the lowest since 2011.
- Lawrence Yun said “It was not a surprise if we consider coronavirus shutdown.”
- Among these foreign home buyers, home buying form China was $4.5B, Canada $4.2B, India $3.1B, Mexico $2.9B, UK $2.7B, etc.
- The most favorable states were in order of Florida, which has been #1 for 13 years, California, Texas, Arizona, New Jersey, New York, etc.
Bets Rise on EV Charging Network
(WSJ 7/27 )
- Utilities and startups are racing to build fast-charging networks for electric vehicles throughout the U.S. as auto makers bet their future EVs. Regional alliances are emerging as utilities join with one another – and with charging-station builder and government agencies – to plan the thousands of charging stations needed to bridge the gaps between U.S. cities.
- Without more stations, EV proponents worry that many consumers will void EVs. Yet without more EVs, they worry that companies will void building enough stations, in what has been industry’s chicken-or-the-egg dilemma.
- Construction and the charging units for each parking stall cost about $110,000, Ms. Zoi, chief executive of the charging provider EVgo Inc. “When we are talking about building a station, we are talking a half million to a million dollars in capital”, she said.
- About 80% of charging happens at home, and the earliest wave of EV buyers have been homeowners who can plug in overnight, said Robert Barrosa, senior director of sales, business development and marketing at the charging provider Electrify America. Utilities and charging-station companies expect ownership patterns to grow to include more apartment and condo dwellers, who will need access to public charging.
- (Korea Times 7/27) Mercedes Benz will make only EVs for all new models after 2025.
FICO Sees It Hold On Credit Slipping
- For decades, nearly every consumer credit decision revolved around a three-digit number – the FICO credit score. But powerful forces are aligning to test its dominance.
- Big lenders are away from FICO, according to people familiar with the matter. A key financial regulator, meanwhile, is encouraging banks to de-emphasize credit-scores in an effort to expand access to affordable credit. And housing-finance giants Fannie and Freddie are considering allowing lenders to use other scores when evaluating mortgage applications, including Vantage Score – in lending decision. FICO might soon face competition in the mortgage market.
- Banks’ efforts to decrease their reliance on FICO recently got a boost from Washington: Last summer’s racial-justice protests sparked conversation at the banks’ main regulator, OCC(Office of the Comptroller of the Currency) about the pitfalls of credit scorers, especially such as preventing many Black and Hispanic borrowers from affordable credit.
- The OCC enlisted banks, financial-technology firms and civil-rights advocates are to find ways to underwrite loans to people without traditional credit scores.
CDC again calls for indoor masks as variant erupts
(NYT 7/28 )
- Revising a decision made a month ago, the CDC said on Tuesday that people vaccinated against the coronavirus should resume wearing masks in public indoor spaces in part of the country where the virus is surging: where there are more than 50 new infections per 100,000 residents over the previous seven days, or more than 8 percent of tests are positive for infection over that period.
- The CDC needed to revisit its recommendations, said Dr. Anthony Fauci, “I don’t think you can say this is just flip-flopping back and forth,” he said. “They are dealing with new information that the science is providing.”