This Week in Housing - August 21, 2020

TL;DR

Discusses housing market trends, forbearance, and builder confidence.

Transcript

[Applause] and we're off hey so it's friday august 21st 2020 and welcome back to this week in housing i'm tom ferry super excited that you're with us this morning as always it's a live show here on facebook so we're just going to wait a couple minutes and let everybody you know get themselves organized and on to the show but let's go and introduce ... Read More

Key Insights

• The housing market is experiencing increased buyer demand due to low interest rates, leading to higher affordability and purchasing power.
• Forbearance rates have peaked and are now declining, with many in forbearance still making mortgage payments.
• Unemployment is decreasing, moving closer to pre-pandemic levels, which positively impacts housing market stability.
• Builder confidence is at an all-time high, driven by increased demand for new homes as buyers seek more space and amenities.
• New construction is a vital market segment, with significant year-over-year growth in page views and applications for new home purchases.
• Real estate professionals should build relationships with builders to meet the high demand for new homes and provide more options for buyers.
• There is a notable shift in buyer preferences towards homes that accommodate work, teaching, and living needs due to the pandemic.
• Agents are encouraged to use data and insights to educate clients and counteract fear-based narratives about the market.

Questions & Answers

Q: What is the current state of forbearance in the housing market?

The current state of forbearance shows a decline from the peak, with active forbearance rates leveling off. Many homeowners in forbearance are still making mortgage payments, indicating a more stable situation than initially feared. The initial forecast of 30% forbearance rates did not materialize, and the current rate is significantly lower.

Q: How are unemployment trends affecting the housing market?

Unemployment trends are showing a decrease, moving closer to pre-pandemic levels. This positive trend is contributing to the stability and recovery of the housing market. As more people return to work, consumer confidence increases, leading to more activity in the housing sector.

Q: Why is builder confidence at an all-time high?

Builder confidence is at an all-time high due to the increased demand for new homes. The pandemic has shifted buyer preferences towards homes with more space and amenities, driving interest in new construction. Builders are seeing record traffic and applications, reinforcing their confidence in the market.

Q: What role do interest rates play in current housing affordability?

Current low interest rates have significantly increased housing affordability. Buyers can afford 10% more home than a year ago while keeping monthly payments unchanged. This translates into higher purchasing power, making homes more accessible and driving increased demand in the market.

Q: How should real estate professionals approach the current market conditions?

Real estate professionals should focus on educating clients with data-driven insights to build confidence and counteract fear-based narratives. They should also establish relationships with builders to provide more options for buyers, especially in areas with tight resale inventory. Using social media and targeted marketing can help reach potential buyers effectively.

Q: What are the current buyer preferences in the housing market?

Current buyer preferences have shifted towards homes that accommodate work, teaching, and living needs due to the pandemic. Buyers are seeking more space, home offices, and amenities, which is driving demand for new construction and homes in suburban or less densely populated areas.

Q: How can agents leverage new construction trends in their business strategy?

Agents can leverage new construction trends by building relationships with builders and becoming knowledgeable about new developments. By doing so, they can offer more options to buyers and capitalize on the high demand for new homes. Promoting new construction through social media and virtual tours can also attract potential buyers.

Q: What strategies can agents use to educate clients about the housing market?

Agents can use data and insights from reputable sources to educate clients about the housing market. Creating informative content, such as videos and social media posts, can help clarify market conditions and dispel myths. Engaging with clients through direct communication and addressing their concerns with factual information can build trust and confidence.

Summary & Key Takeaways

• The August 21st episode of This Week in Housing discusses the current state of the housing market, focusing on forbearance, unemployment, and builder confidence. With low interest rates, buyers have increased purchasing power, making homes more affordable than in previous years.

• Forbearance rates are declining, and many homeowners in forbearance are still making payments. Unemployment is also decreasing, nearing pre-pandemic levels, which supports the housing market's recovery. Builder confidence is high due to increased demand for new homes.

• Real estate professionals are advised to leverage these insights to build confidence with clients and establish relationships with builders. By doing so, they can better serve the growing demand for new homes and help clients navigate the current market landscape.