NAR: Covid-19 Starting to Impact Home Showings, But Lower Rates Offset

By Taff Weinstein at

NAR: Covid-19 Starting to Impact Home Showings, But Lower Rates Offset

NAR: Covid-19 Starting to Impact Home Showings, But Lower Rates Offset

Nearly one in four homesellers are changing how their home is viewed due to the COVID-19 outbreak, according to a new report from the National Association of Realtors. That percentage jumps to 44% and 34%, respectively, in Washington State and California, two of the states most severely affected by the outbreak.

The changes introduced by sellers include halting open houses, requiring potential buyers to wash their hands or use hand sanitizer, and asking buyers to remove shoes or wear footies, NAR reported.

NAR’s Economic Pulse Flash Survey asked members about how the outbreak – along with associated drops in stock market values and mortgage rates – has affected homebuyer and seller interest and behavior. Other key findings of the survey include:

  • 37% said lower mortgage rates excited homebuyers much more than the stock market drop
  • 78% said there had been no change in buyer interest due to the COVID-19 outbreak
  • 16% said buyer interest was down due to the outbreak.
  • Members in California and Washington State reported sharper decreases in buyer interest – 21% and 19%, respectively
  • 87% said that COVID-19 has not affected the number of homes on the market
  • In Washington State and California, 5% and 4% of members, respectively, reported that homes had been removed from the market. The figure is 3% nationally

What Happened to Rates Last Week?

Mortgage backed securities (FNMA 3.000 MBS) lost -149 basis points (BPS) from last Friday's close which caused fixed mortgage rates shoot higher compared to the prior week.

Overview:  Once again, it was all CoronaVirus, all the time as the global economic slowdown becomes more and more prevalent.  This forced a series of government and central bank action that was designed to stimulate the markets but actually had the opposite effect as the markets signaled it was too little in advance of a major global economic recession that is coming due to the virus.

Domestic Flavor:

Central Bank Palooza:  The Peoples Bank of China announced a targeted RRR cut of 50bp-100bp for banks qualified in "inclusive finance" tests, effective March 16, which will release liquidity of RMB 400bn. An additional 100bp cut will be granted for qualified joint-stock commercial banks, unleashing liquidity of RMB 150bn to the market.  The Bank of Canada announced an emergency 50 BPS rate cut plus a $10B support program. announced an emergency 50 BPS rate cut plus a $10B support program. The European Central Bank (ECB) kept their main interest rate at 0.0% and their deposit rate at -0.5% but announced more liquidity (asset purchases) to their schedule.  The Federal Reserve stepped in with emergency measures of $1.5T (that "T" is for trillion) “across a range of maturities” to include bills, notes, Treasury Inflation-Protected Securities and other instruments. The Bank of England has an emergency -50BPS rate cut, and slashed capital buffer requirements

Inflation Nation:  The February Headline Producer Price Index (PPI) YOY increased by 1.3% vs est of 1.8%. The Core PPI (ex food and energy) YOY increased by 1.4% vs est of 1.7%. (PPI) YOY increased by 1.3% vs est of 1.8%. The February Headline Consumer Price Index (CPI) YOY increased by 2.3% vs est of 2.2%. The Core CPI (ex food and energy) YOY increased by 2.4% vs est of 2.3% as Services inflation continues to accelerate to its highest since August 2016 as goods inflation languishes.

President Trump: Officially declared a National Emergency which activates approx $50B in funds available to FEMA and others and allows suspension of laws an regulations to move quickly for approving testing and treatment options.

What to Watch Out For This Week:

The above are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises.

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.


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