November 9, 2020Promising results from an early coronavirus vaccine trial sent markets soaring. Treasury yields spiked to their highest levels in months and mortgage rates rose significantly. The Federal Reserve called for more fiscal support in the face of surging virus cases, and hinted at more market easing initiatives.Encouraging vaccine news stokes financial market optimism
The virus continues to influence Federal Reserve actions
Mortgage rates spike on vaccine news
So what?The fate of the economy's recovery depends largely on the evolving path of the pandemic, and our ability to handle it — and markets soared today on promising, if early, signs of progress towards an eventual vaccine. Economic activity has improved from springtime lows, aided initially by unprecedented government support that has since expired. But high-frequency indicators suggest that the virus has and will continue to constrain activity and optimism. In the week ending October 25, levels of consumer spending were 3.9% below January, and the pace of improvement has stalled since early September. Even as some parts of the economy show real signs of progress, there are clearly portions that cannot recover until the virus has been corralled: Entertainment spending is down 54.8% from January; spending at restaurants and hotels is down 29.1%. At the end of September, the number of small businesses in the leisure and hospitality sector was 36.9% less than at the beginning of the year. So even as much of the world remains firmly in the grips of a devastating uptick in cases over the last several weeks, today's news was a shot in the arm for hopes of an eventual return to normalcy. The worsening virus surge was a key theme in statements made at the most-recent meeting of the Federal Reserve's Federal Open Market Committee. Fed Chair Jerome Powell emphasized the fragility of U.S. households' budgets and the risks to the economic recovery posed by the coronavirus' accelerating spread, particularly if no additional fiscal support is passed in Congress. As expected, the Fed kept key interest rates near zero, and Powell hinted that the central bank could adjust or increase its pace of asset purchases should the economy's recovery continue to slow. An uptick in asset purchases would likely place more downward pressure on bond yields, and thus mortgage rates. Today's encouraging vaccine news and more certainty surrounding the outcome of U.S. elections combined to push bond yields strongly upward, and mortgage rates followed suit. The yield on the 10-year Treasury bond briefly touched its highest level since March, before retreating slightly near the end of the trading session. The yield curve of U.S. government bonds grew to its steepest shape since February 2018, an indication of quickly-growing optimism and appetite for risk in financial markets. Mortgage rates didn't move by quite as much, but did rise and essentially erase all of the declines (or improvements) made last week in the immediate wake of the election. Even so, mortgage rates in general remain very low, and the recent weakening of their long standing relationship with Treasury yields suggests that any upward movements will be muted compared to those of Treasury yields. But today's market behavior was a reminder that mortgage markets are certainly not immune to coronavirus-related developments. Click here to read past editions of Zillow’s Market Pulse updates. The post Zillow Market Pulse: November 9, 2020 appeared first on Zillow Research. via Zillow Market Pulse: November 9, 2020 https://ift.tt/3los8eN
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November 9, 2020Promising results from an early coronavirus vaccine trial sent markets soaring. Treasury yields spiked to their highest levels in months and mortgage rates rose significantly. The Federal Reserve called for more fiscal support in the face of surging virus cases, and hinted at more market easing initiatives.Encouraging vaccine news stokes financial market optimism
The virus continues to influence Federal Reserve actions
Mortgage rates spike on vaccine news
So what?The fate of the economy's recovery depends largely on the evolving path of the pandemic, and our ability to handle it — and markets soared today on promising, if early, signs of progress towards an eventual vaccine. Economic activity has improved from springtime lows, aided initially by unprecedented government support that has since expired. But high-frequency indicators suggest that the virus has and will continue to constrain activity and optimism. In the week ending October 25, levels of consumer spending were 3.9% below January, and the pace of improvement has stalled since early September. Even as some parts of the economy show real signs of progress, there are clearly portions that cannot recover until the virus has been corralled: Entertainment spending is down 54.8% from January; spending at restaurants and hotels is down 29.1%. At the end of September, the number of small businesses in the leisure and hospitality sector was 36.9% less than at the beginning of the year. So even as much of the world remains firmly in the grips of a devastating uptick in cases over the last several weeks, today's news was a shot in the arm for hopes of an eventual return to normalcy. The worsening virus surge was a key theme in statements made at the most-recent meeting of the Federal Reserve's Federal Open Market Committee. Fed Chair Jerome Powell emphasized the fragility of U.S. households' budgets and the risks to the economic recovery posed by the coronavirus' accelerating spread, particularly if no additional fiscal support is passed in Congress. As expected, the Fed kept key interest rates near zero, and Powell hinted that the central bank could adjust or increase its pace of asset purchases should the economy's recovery continue to slow. An uptick in asset purchases would likely place more downward pressure on bond yields, and thus mortgage rates. Today's encouraging vaccine news and more certainty surrounding the outcome of U.S. elections combined to push bond yields strongly upward, and mortgage rates followed suit. The yield on the 10-year Treasury bond briefly touched its highest level since March, before retreating slightly near the end of the trading session. The yield curve of U.S. government bonds grew to its steepest shape since February 2018, an indication of quickly-growing optimism and appetite for risk in financial markets. Mortgage rates didn't move by quite as much, but did rise and essentially erase all of the declines (or improvements) made last week in the immediate wake of the election. Even so, mortgage rates in general remain very low, and the recent weakening of their long standing relationship with Treasury yields suggests that any upward movements will be muted compared to those of Treasury yields. But today's market behavior was a reminder that mortgage markets are certainly not immune to coronavirus-related developments. Click here to read past editions of Zillow’s Market Pulse updates. The post Zillow Market Pulse: November 9, 2020 appeared first on Zillow Research. via Zillow Market Pulse: November 9, 2020 https://ift.tt/3los8eN Who’s buying homes, who’s selling them, and what types of homes are inspiring bidding wars all look a little different this year as the country remains in the throes of the coronavirus pandemic. Those who managed to nail a home purchase after the COVID-19 pandemic began spreading through the United States were more likely to pay dearly for larger, more expensive homes in the suburbs, according to the National Association of Realtors® 2020 Profile of Home Buyers and Sellers. The annual report breaks down the characteristics of buyers, sellers, and the homes they bought and sold. It was based on responses from more than 8,200 buyers and sellers who completed their transactions between July 2019 and June 2020. “Buyers who are out there have a higher income and are financially secure and need to find a house that will work for their family,” says Jessica Lautz, NAR’s vice president of research. And prices just keep going up and up. Buyers paid more for these homes—a median $339,400 since April, compared with $270,000 before the crisis, as prices climbed as a result of competition flooding a market with a stark lack of inventory. That’s a nearly 27% increase in just a few short months. The throngs of buyers lured by record-low mortgage interest rates and the need for more space (home office anyone?) have led to a surge in offers over asking price, bidding wars, and homes selling within days of being listed, or sometimes hours. About 57% of these buyers closed in the suburbs, up from 50% last year. However, urban sales also ticked up slightly from 12% to 14% as the pandemic dragged on. “Some of this is normal; it happens every year,” says realtor.com Chief Economist Danielle Hale. “We do know that spring and summer buyers tend to be families who purchase larger, more expensive homes. “But some of it could be driven by the pandemic,” adds Hale. Today’s buyers haven’t been as affected by the downturn brought on by the coronavirus and have held onto their jobs, despite the worst unemployment since the Great Depression. (Unemployment has been highest among customer-facing workers, such as lower-paid restaurant, retail, and other employees who can’t work remotely.) Those who bought in April and after had median household incomes of $100,800 compared with a median $94,400 for those who closed before the crisis. “People who are in the market right now who have kept their jobs and have relatively steady income, so have been able to take advantage of low mortgage rates,” says Hale. Rates fell to an all-time low of 2.78% for a 30-year fixed-rate mortgage in the week ending Nov. 5, according to Freddie Mac. Pandemic buyers don’t expect to stay in their homes as long as those who bought before the public health crisis. They plan to be in their new homes for 10 years, compared with 15 years. “People are saying, ‘I just need to find a home that’s right for me right now. Perhaps after the pandemic, I’ll continue living here or find a new place,'” says Lautz. They also tend to be a bit more family-focused than they were before the deadly virus. They’re more likely to buy a multigenerational home for themselves and their aging parents, grown children, or grandchildren—or all of the above. About 15% of buyers purchased such homes in April and afterward versus 11% before the pandemic. “They need to find a home that will have enough room for all of these adults who suddenly are living together,” says Lautz. “It’s to take care of and spend more time with an elderly parent. Adult children may also be back at home with their families.” Fewer first-time buyers became homeowners this yearOverall, the number of successful first-time home buyers fell this year as the pandemic and the struggling economy took their toll. That could be because these buyers, who tend to be younger and make less money, may have been hurt more by the recession. First-time buyers, a median 33 years old, made up about 31% of sales. That was down a little from 33% last year and is the lowest it’s been since 1987, when they made up 30% of the share. “Even with low interest rates, it’s hard to find an affordable home with the lack of housing available,” says Lautz. This group had an $80,000 median household income, lower than repeat buyers at $106,700. They also had lower down payments, of a median 7%. That’s because they earned less, were contending with student loan debt, and didn’t get as much family help. The median down payment for all buyers was 12% of the purchase price. Just over a quarter, 26%, of these buyers received financial help from their families on their home purchase—compared with 33% last year. Student loans were the biggest obstacle for saving up for a down payment. Buyers typically carry about $30,000 in student loan debt. That’s why the homes they purchased were more affordable than those bought by repeat buyers. First-time buyers spent a median $230,000—about 18% less than the median $272,500 price of all homes sold. “Younger buyers, first-time buyers are less established and have to make sacrifices,” says Hale. “It is a challenge buying a home.” Not surprisingly, their homes tended to be smaller, at a median 1,680 square feet. That’s a little more than 200 square feet in difference from buyers overall. Repeat buyers were a median 55 years old and bought 2,020-square-foot homes for a median $297,000. Overall, the typical buyer this year is middle-aged, is coupled up, and makes good money. These folks are a median 47 years old and have a $96,500 median household income. Buyers were also overwhelmingly white, making up about 83% of those who purchased homes. Hispanics made up about 7%, followed by Asians and Blacks, both at 5%. “It is not just a reflection of the makeup of the country, but also a reflection of how income and wealth are spread out among different racial groups,” says Hale. Sellers made more money during the pandemicHomeowners who sold their properties during the pandemic were more likely to cash in as prices spiked nationally. Those who sold after March scored a median $300,000 for their residences. That’s nearly $30,000 more than those who sold before the virus for a median $270,700. Pandemic sellers were more likely to put their homes up for sale because they felt they were too small. About 18% did so after the March lockdowns, compared with 13% who sold their abodes before March. “Sellers have more urgency to find a place that fits their family’s needs during the pandemic,” says Lautz. Sellers tended to be older, a median 56 years old, and wealthier than buyers with median household incomes of $107,100. They lived in their homes for about a decade before putting them onto the market. Their homes sold in about three weeks for 99% of the final list price. They made a median $66,000 on their sales compared with what they had originally paid for their properties. The hottest housing in 2020As folks increasingly sought out additional square footage and the ability to better socially distance, detached, single-family homes remained the top type of housing purchased this year. That makes sense as folks forced to work and school their children from home sought out larger spaces, home offices, and bigger backyards to safely socialize in. The typical home bought this year was a three-bedroom, two-bathroom with approximately 1,900 square feet. Homes sold were a median 27 years old. “People are seeking more space either to home-school or work remotely or have more personal space,” says Lautz. Overall, homes sold for a median $272,500. Buyers purchased properties a median 15 miles away. “Larger, more suburban homes were a trend that existed even before the pandemic,” says Hale. “Of course, we’ve seen that trend accelerate due to the havoc the coronavirus has wreaked on all aspects of life.” The post It’s Been Much Harder To Buy a Home During the Pandemic—and Sellers Are Cashing In appeared first on Real Estate News & Insights | realtor.com®. via It’s Been Much Harder To Buy a Home During the Pandemic—and Sellers Are Cashing In https://ift.tt/2IhrcdX November 6, 2020The U.S. labor market improved in October from September, and unlike the month before, appeared to do so for the right reasons. But problems persist: measures of persistent job loss remain elevated and more than half the jobs lost in the Spring have not been recovered.The job market continued its gradual recovery in October…
…But, like before, signs of stress persist…
…And the path forward remains uncertain.
So what?The October jobs report offered both encouraging and discouraging signals for the U.S. labor market. The U.S. economy added 638,000 jobs in October from September, a figure that would have been larger without the removal of about 150,000 temporary Census jobs. The headline unemployment rate dropped a full percentage point, to 6.9%, and unlike September's report, the decline in overall unemployment appears to have occurred for healthy reasons. Both the labor force participation rate and the share of people who are employed both increased from September, as did the overall size of the labor force. All three of these metrics remain well below their pre-pandemic levels, but after September's weak showing, October's improvements could indicate that people are gaining confidence in their ability to find employment. But it's critical not to overlook signs of weakness, too — particularly the fact that joblessness is becoming increasingly permanent. While temporary job losses declined, continuing a trend that has been playing out for months, measures of persistent or permanent unemployment barely improved in September and remain near their highest pandemic-era levels. There were 3.6 million "long-term" unemployed people — those out of work for 27 weeks or longer – in October, up about 46% from September and representing 33% of all people currently unemployed but still in the labor force. Given the still-elevated level of jobless claims and ongoing spread of the coronavirus, an increase in this metric isn't a surprise, but it also reinforces a key challenge that the labor force will face going forward. Generally, the longer people are out of work, the harder it is for them to reconnect with their old employer and, more broadly, to find work even when jobs become available. As expected, job growth has slowed markedly in the past few months and more than half (55%) of the jobs lost in March and April have failed to return. Assuming the same level of job growth as before the pandemic had continued, estimates suggest that the labor market is still down about 11.7 million jobs compared to where it would have been had the pandemic not occurred. What's more, the report fails to account for the 7 million workers who remain employed but have seen their hours or wages cut in recent months. Meanwhile, jobless claims remain elevated – more than a million people filed for initial jobless claims last week. The outlook for the job market depends most of all on the path of the coronavirus and the potential for additional federal, fiscal relief. Today's report showed that state and local governments — suffering huge losses in revenues because of the pandemic — cut 130,000 jobs in October, and will continue to contract without additional relief. Click here to read past editions of Zillow’s Market Pulse updates. The post Zillow Market Pulse: November 6, 2020 appeared first on Zillow Research. via Zillow Market Pulse: November 6, 2020 https://ift.tt/38xPwD7 November 6, 2020The U.S. labor market improved in October from September, and unlike the month before, appeared to do so for the right reasons. But problems persist: measures of persistent job loss remain elevated and more than half the jobs lost in the Spring have not been recovered.The job market continued its gradual recovery in October…
…But, like before, signs of stress persist…
…And the path forward remains uncertain.
So what?The October jobs report offered both encouraging and discouraging signals for the U.S. labor market. The U.S. economy added 638,000 jobs in October from September, a figure that would have been larger without the removal of about 150,000 temporary Census jobs. The headline unemployment rate dropped a full percentage point, to 6.9%, and unlike September's report, the decline in overall unemployment appears to have occurred for healthy reasons. Both the labor force participation rate and the share of people who are employed both increased from September, as did the overall size of the labor force. All three of these metrics remain well below their pre-pandemic levels, but after September's weak showing, October's improvements could indicate that people are gaining confidence in their ability to find employment. But it's critical not to overlook signs of weakness, too — particularly the fact that joblessness is becoming increasingly permanent. While temporary job losses declined, continuing a trend that has been playing out for months, measures of persistent or permanent unemployment barely improved in September and remain near their highest pandemic-era levels. There were 3.6 million "long-term" unemployed people — those out of work for 27 weeks or longer – in October, up about 46% from September and representing 33% of all people currently unemployed but still in the labor force. Given the still-elevated level of jobless claims and ongoing spread of the coronavirus, an increase in this metric isn't a surprise, but it also reinforces a key challenge that the labor force will face going forward. Generally, the longer people are out of work, the harder it is for them to reconnect with their old employer and, more broadly, to find work even when jobs become available. As expected, job growth has slowed markedly in the past few months and more than half (55%) of the jobs lost in March and April have failed to return. Assuming the same level of job growth as before the pandemic had continued, estimates suggest that the labor market is still down about 11.7 million jobs compared to where it would have been had the pandemic not occurred. What's more, the report fails to account for the 7 million workers who remain employed but have seen their hours or wages cut in recent months. Meanwhile, jobless claims remain elevated – more than a million people filed for initial jobless claims last week. The outlook for the job market depends most of all on the path of the coronavirus and the potential for additional federal, fiscal relief. Today's report showed that state and local governments — suffering huge losses in revenues because of the pandemic — cut 130,000 jobs in October, and will continue to contract without additional relief. Click here to read past editions of Zillow’s Market Pulse updates. The post Zillow Market Pulse: November 6, 2020 appeared first on Zillow Research. via Zillow Market Pulse: November 6, 2020 https://ift.tt/38xPwD7 Big-city life has always been a major trade-off: the amazing job opportunities, cultural resources, and endless options for dining and nightlife weighed against cumulous-scraping prices for homes with a tiny footprint. Looming large over the equation has been the common goal of keeping work commutes as short and easy as possible. But the coronavirus pandemic of 2020 turned all that upside down. Suddenly plenty of office workers (and their employers) have made a startling discovery: They can do their jobs just as well remotely! So, it stands to reason, why not do it somewhere cheaper? After spending seemingly endless months of Zooming from the bedroom, schooling in the living room, and lingering in the bathroom for a few precious extra moments of privacy, many families have been packing up their urban cubbyholes in favor of large homes out in the country or the ‘burbs. According to the Pew Research Center, even back in June, at least 1 in 5 adults had moved, or knew someone who had moved, due to the pandemic. If employers let their workers go remote permanently, suddenly folks could go anywhere—anywhere that has a decent internet connection and good living conditions, that is. So where are the best places for folks to escape the biggest, priciest cities? The industrious data team at realtor.com® (working remotely, of course) is here to help! We focused on more affordable metropolitan areas, all but one with home list prices under the national $350,000 median. They offer the magical combo of low home prices and reasonable cost of living as well as fast-speed internet so folks don’t uncomfortably freeze in their work meetings. We also made sure these metros have plenty of businesses and fun/interesting places to explore when the pandemic ends. Because it will end. (Metros include the main city and surrounding smaller towns, urban areas, and suburbs.) “With so much more time spent at home, there’s more urgency to try to address a fit that’s not quite right,” says Danielle Hale, chief economist for realtor.com®. “People’s priorities and needs have shifted as a result of changes in the way we live now.” To come up with the best places to telecommute, we scoured the 100 largest metros for the ones with access to high-speed internet (at least 250 Mbps), affordable home prices, and a low cost of living. The data came from realtor.com, the Federal Communications Commission, the U.S. Census Bureau, and the St. Louis Federal Reserve. Only one metro per state was included to ensure geographic diversity. Ready to peruse the greener grasses? Let’s check out the best places to work remotely during the COVID-19 pandemic—and beyond!
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AuthorHi, I'm Parker Stiles, the founder of Barrington Acquisitions. I truly hope you enjoy our real estate tips! ArchivesCategoriesLet's connect!
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