Rise of the Suburbs, July Homes Sales Shoot to 14 Yr High: US Cities Seeing Their Fortunes Change

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3. 'Low Rates and Heavy Demand Send US Home Sales Purging'

'Low rates and heavy buyer demand send US home sales surging.' By Matt Ott, AP News, an hour ago. - Ed.:



April 27, 2020. Sale pending sign on a home in Mt. Lebanon, Pa.

Silver Spring, Md. (AP) — Spurred by ultra-low mortgage rates, home buyers rushed last month to snap up a limited supply of existing houses, causing the pace of purchases to jump by a record-high 24.7%. The July surge in sales reported Friday by the National Assn. of Realtors marked the 2nd straight month of accelerating home purchases. The back-to-back increases have helped stabilize the home buying market, which all but froze early this spring when the viral pandemic erupted across the U.S. With July’s increase, to a seasonally adjusted annual rate of 5.86 million, purchases of existing homes are up 8.7% from a year ago.

Near record-low mortgage rates have made homes more affordable for buyers. The average rate on a 30-year fixed rate mortgage is now 2.99%, the mortgage buyer Freddie Mac said Thursday. A year ago, it was 3.55%.

The figures also point to a persistently unequal recovery: Many higher-paid white-collar workers, who have disproportionately kept their jobs & can work remotely, are able to buy homes, in some cases far from their employers’ headquarters. By contrast, renters are more likely to work in lower-paying service jobs at restaurants, hotels, gyms, & hair salons, where layoffs have been rampant & their ability to pay rent is declining. The expiration of a federal moratorium on evictions has also raised their risk of losing their home.

In the most expensive housing markets- NY & San Francisco- more people are leaving high-priced city apartments to buy homes in outer suburbs. Loss of urban amenities & concern that the risk of infection is higher in denser areas may be contributing to that trend..In a pocket of southern Vermont, sales to out-of-state buyers, including from NYC, have surged. Some of the newcomers to Vermont came to ride out the pandemic & decided to stay. “It’s just like 9/11 — they feel safe,” realtor Boyd said. In other metro areas, too, some people are casting eyes toward the suburbs. Peter Lau & his wife recently got a quick offer on their home in D.C. & moved to suburban Rockville, Md. He & his wife wanted a better space for their new reality: working remotely with room for a home office & for their children to do remote learning.

Typically, unemployment among renters is about 4.4 percentage points higher than among homeowners. Since the pandemic has intensified, that gap has jumped to 6.4 percentage points. Even as home sales have grown, so have mortgage delinquencies. The proportion of homeowners who are 30 days or more behind on their payments jumped to 8.2% in the April-June quarter, up from 4.4% in the first 3 months of the year, according to the Mortgage Bankers’ Association. In the meantime, the shortage of homes for sale is boosting prices. The median price has topped $300,000 for the first time on record, settling at $304,100. That’s up a sharp 8.5% from July 2019..

https://apnews.com/d224305938a20e3bdfa8b8dc67689270