the AZ market

Tag: #weeklyupdate

  • Greater Phoenix Real Estate Update 2/19/2021

    Low-interest rates keep housing demand high while available supply continues to dwindle. Today’s market is tough on buyers yet it is still a great time to buy; so we must continue to encourage them. And we must do the same for the sellers as well.

    Stories of 75 offers in one weekend or a fixer selling as-is for $50,000 over asking come almost daily. Real estate is not for the faint of heart nor is it boring.

    Real Estate News:

    Inventory:

    Inventory is low. Everywhere. With fewer than 2,500 active single-family homes on the market in Maricopa County, we are 77% below the average listing count over the past 4 years. This makes everyone sensitive to small changes in inventory levels.

    When big companies, like Opendoor, manipulate their own inventory levels it is important to take notice. For example, from November 10 to December 10 Opendoor did not list a single property anywhere in the country. They continued purchasing properties though. An easy assumption is that they were stock piling houses to release to the market after they went public on December 21 and to give their investors a strong Q1 2021 due to all of the closings pushed into the new year. They created a stock pile of artificial inventory.

    It was only for a short period, listings are withheld in 23 markets for 4 weeks, yet it shows how much power one company has to dictate the market. What if they hold them all for a year? What if they hold them to inflate the market? What if the other iBuyers do the same, like when Zillow and Opendoor both simultaneously decreased buyer agent commissions to 2.25% from 3% last summer?

    Opendoor is a publicly traded company. Wall Street is motivated by money. And now Opendoor has shown the ability to and willingness to, withhold listings in the tightest housing market in history. Are they still selling convenience to the consumer or doing what is best for their bottom line?

    National Real Estate:

    Typically about 25% of active listings take at least one price reduction before selling. Today that number has dropped to only 18.7%.

    Current active inventory of single family homes on the market stands at just 344,415 this week. That’s down another couple percent from last week.

    The AZ Market:

    • The median sales price is up 18% year over year.
    • Available inventory is down 61% year over year.
    • Monthly mortgage payments for the median house is roughly $150-$250 cheaper than rents for the same property.
    • 37% of closings so far in February closed for more than asking.
    • At this point in 2021, luxury sales of properties from $1M-$3M are up 102% year over year and sales over $3M are up a whopping 140% year over year.
    • Join us next Friday as Tina Tamboer does a deep dive into the AZ market. Click here for details and registration.

    Winning Phoenix:

    Greater Phoenix is highly desirable and still considered affordable. An estimated 83,000 new residents moved here in 2020 and with it, they brought bigger budgets. Local buyers’ budgets averaged $509,000 while new buyers coming from out of state had an average budget of $627,000; 23% higher!

    In a recent Zillow survey, Phoenix ranks second in 2021’s hottest market. The Sunbelt is leading the housing pack.

    Phoenix ranks #7 in the Milken Institute Best-Performing Cities Index. According to the ranking, in 2020 San Francisco ranked #1 and this year it did not even make the list. To quote directly from the index:

    “For years, Phoenix has been topping lists of the most rapidly expanding cities in the country — jobs grew 17.6 percent between 2014 and 2019 while wages increased by 34.2 percent in the same period. 

    Although home values are responding to the economic boom and spiking accordingly, the city continues to attract a healthy balance of economic power players and people looking for a more affordable place to make a start in life.

    ‘The metro continues to grow at unprecedented rates, including top-tier one-year job (sixth) and wage growth (15th),” reads the report. “Phoenix also improved five ranks in high-tech GDP concentration (47th), while its seven high-tech industries land it at 37th, highlighting a deepening high-tech economy.’”

    Milken Institute Best-Performing Cities Index.

    New Construction:

    Continues to be plagued by high materials costs, especially for lumber which increased over 150% last summer, then dropped and increased again, due to supply chain shortages, massive fires, labor shortages, closed mills, COVID, and larger homes under construction.

    “While the market remains solid, median home prices are increasing due to higher building material costs, most notably softwood lumber, and a shift to larger homes.”

    Robert Dietz, chief economist for the National Association of Home Builders

    Forbearance:

    The latest forbearance numbers show improvement. The total number of loans in a forbearance program is around 5.29% or about 2.6 million, a decrease of about 100,000 in the last 2 weeks.

    The foreclosure, forbearance, and eviction moratorium have all been extended through June 30, 2021.

    Forbearance Exits from June 1, 2020 – February 7, 2021:

    • 43.6% of forbearance exits are paid up and current.
    • The number to watch remains at 13.8% of forbearance exits are doing so without a loss mitigation plan in place.
    • This means that if all 2.6 million borrowers exited their forbearance plan today, about 348,000 would leave with no plan in place.

    For more details see my recent AZ Forbearance Update from Wednesday.

    Delinquencies:

    In Q4 2020 the mortgage delinquency rate, which includes those in forbearance who are behind, was 6.73%, a 0.92% decrease from Q3 2020 but still nearly 3% above this time last year. This nearly 1% quarterly drop is the biggest decrease since the Mortgage Bankers Association started tracking this data in 1979.

    The 30-day lates reached their lowest since tracking began in 1979, while both 60 and 90 days lates also decreased. 90+ day lates remain the largest delinquent group at just above 5% of all mortgages.

    Total mortgage delinquencies across the three loan types – conventional, FHA, and VA – and across the major stages of delinquency – 30-day, 60-day, and 90-day – declined from last year’s third quarter.

    MBA Delinquencies

    3D Printed House:

    The nation’s first 3D printed house hit the market in Riverhead, New York with an asking price of $299,999. It is 1,500 square feet and made out of concrete.

    Final Thoughts:

    Supply and demand are the foundation of economics. Real estate is no different. In order for something to change either demand will subside or supply will increase. When that happens it doesn’t mean that our market will crash or values will go down, it means that appreciation will slow to a rate more favorable to buyers and sellers will have to negotiate.

    Only then can we get out of what Mark Fleming with First American so gracefully explained, “This is what we call the homeowner prisoner’s dilemma. There’s nothing to buy because nobody is selling, but nobody is selling because there’s nothing to buy.”

    Please share this with your colleagues and clients.

    Copyright 2021 by Sarah Perkins

  • Greater Phoenix Real Estate Update 1/22/2021

    Earlier this week I did a podcast with HousingWire where we discussed the spike in title company mergers and acquisitions. Click here to check out this 18-minute podcast.

    Are we going to run out of houses to sell? Are we going to have a foreclosure crisis? What about all of the looming evictions? V shape, K shape, policy, stimulus, unemployment, vaccines, why can’t my buyer find a house?

    Between the emotional exhaustion and pandemic fatigue making sense of today’s real estate market is difficult at best. Add in some misleading headlines and it is no wonder why we have stressed out home buyers and sellers.

    Let’s start with what we know.

    National Real Estate:

    “The shortage of homes for sale has been an ongoing issue for the last couple of years, but in December the combination of the holiday inventory slowdown and the pandemic buying trend caused it to dip to its lowest level in history. Looking forward, we could see new lows in the next couple of months as buyers remain relatively active, but a surge of new COVID cases may slow the number of sellers entering the market.”

    Danielle Hale Chief Economist for Realtor.com

    Danielle Hale was right, as of Monday, total single-family homes available in the US dropped down to 388,678. That means that only 0.05% of all single-family homes in the country are available. With NAR’s 1.4M members, there are 3.5 Realtors for every house for sale.

    • Elliot Eisenberg shared, “While housing permits are running at 1.64 million/year, their best level since 9/06, the improvement is uneven. In the Northeast, permits are at 200,000/year and have been flat for decades. In the Midwest, permits are also at 200,000/year and have bounced between 200,000/year and 400,000/year since 1960. Out West, permits are 400,000/year, their midpoint since 1960. Only in the South, where permits are at 870,000/year, are they relatively high.”
    • ATTOM Data Solutions recently released its 2020 Grocery Store Wars and found:
      • The average home value near Trader Joe’s is $644,558
      • The average home value near Whole Foods is $532,224
      • The average home value near ALDI is $250,850

    The AZ Market:

    “This is what we call the homeowner prisoner’s dilemma. There’s nothing to buy because nobody is selling, but nobody is selling because there’s nothing to buy.”

    Mark Fleming
    • Phoenix had the highest year over year rental increase in the country at 9.9% for November 2020. (Corelogic)
    • As of yesterday, there are fewer than 5,000 active listings in Maricopa and Pinal Counties.
    • There are roughly 5 buyers for every listing available in greater Phoenix.
    • The chart below compares new listings in the first 20 days of January 2019, 2020, and 2021 for the southeast valley cities of Tempe, Mesa, Chandler, Gilbert, Queen Creek, and Apache Junction. Yikes!

    12 of Amazon’s 20 facilities in AZ opened in 2020. The company employs 20,000 full and part time Arizonans.  Three more facilities are planned to open in 2021. (AZ Big Media)

    “Growth and expansion is based on demand. Amazon’s business continues to grow exponentially, and with it, Greater Phoenix is a beneficiary. Greater Phoenix is the perfect location for distribution because of our infrastructure, talent pool, low business costs and advantageous operating environment. Businesses in Greater Phoenix can serve more than 33 million consumers in a single days truck haul, our shipping costs to California are up to 75 percent cheaper than other Mountain West markets and we have the third largest labor pool in the western U.S.”

    Chris Camacho, president and CEO of GPEC

    Commercial Real Estate:

    • With 292,000 new units, 2020 nearly kept up with previous years’ new market-rate apartments nationwide. Phoenix was a top performer with 17,215 apartment starts in 2020. (AZ Big Media)
    • JLL, one of the largest commercial real estate services companies, added a single-family investment advisory arm. Not only do they think that buying single-family properties to hold is a good investment, they created an entire branch to advise on it.
    • Peter Linneman of Linneman & Associates said, “If you have a long hold horizon, I just think you’re in a golden age for multifamily. The spread is so outlandishly attractive. A lot of money’s going to be flowing to the sector that I just think we’re going to look back and say, ‘This is the third golden era of longer-term-hold multifamily.”
    • 12,200 retail stores closed in 2020 which utilized about 159 million square feet or 1.4% of retail space. (Elliot Eisenberg)

    Policy:

    • One of the 17 executive orders signed by President Biden on Wednesday includes an extension of the eviction and foreclosure moratoriums through, at least, March 31, 2021.
    • Part of the proposed $1.9 trillion stimulus plan, called the American Rescue Plan, will extend the eviction and foreclosure moratorium through September 30, 2021. It will also include another $30 billion for rental assistance.
    • The National Multifamily Housing Council and National Apartment Association stated that while they support the rental assistance (for landlords) offered in the stimulus packages they fear it is not sufficient enough to address the outstanding debt. (Bisnow)

    Lending:

    In March, the Federal Reserve started purchasing bonds to stabilize interest rates. The Fed has committed to continuing the purchase rate as long as necessary, at an average of $120 billion a month, $80B in Treasuries and $40B in mortgage backed securities. Fed holdings now exceed $7 trillion.

    Interest rates run about 1.7% above the 10-year bond yields. Based on this, rates were not properly priced for the last 5 months of 2020. Logan Mohtashami, a senior economic analyst with HousingWire, expects the 10-year yield to reach around 1.33%-1.60% this year which would mean rates will likely rise to about 3.375%-3.625%.

    Forbearance and Foreclosures:

    • The total number of mortgages in an active forbearance plan decreased to 5.37% or 2.7 million loans. For a deeper dive into the numbers, click here for my most recent AZ Forbearance Update.
    • Due to the ongoing foreclosure moratoriums, the foreclosure levels are at historic lows.
    • During normal economic times, nationwide we average about 69,000 foreclosures a month. (KCM)

    Real Estate News:

    • Now that Zillow is officially a brokerage (only representing its iBuyer acquisitions and sales), it has shifted to IDX feeds allowing for greater accuracy but also changes in how listings are shown. Buyer agents are now “personal guides” and the listing agent is noted separately.
    • Zillow is no longer offering free rental listings. They now require contracts between Brokers, Realtors, and Zillow through its Feed Connection Program or for $9.99 weekly through Zillow Rental Manager. (Inman)
    • Compass, one of the nation’s fastest growing brokerages, filed paperwork with the SEC to go public via initial public offering (IPO) rather than merging with a special purpose acquisition company (SPAC) as many other real estate companies did in 2020.

    Final Thoughts:

    December’s 140,000 increase in unemployment claims, the first increase since April, was entirely lockdown based hitting leisure, hospitality, and private education the hardest. CA alone lost 600,000 jobs while other markets saw job growth. Real estate added 4,800 jobs in December and construction added 51,000 jobs. (US Department of Labor)

    More workers in construction will lead to more building, which will lead to more inventory, which will lead to more purchases and a more stable housing market. And the best type of housing market is a stable one.

    Elliott Pollack said, “Ignore the news about the poor economy over the next couple of quarters. It is unavoidable but also temporary. Focus on the period that will follow. Virtually all of the economic indicators will return or exceed February 2020 levels very quickly once vaccinations are available for enough Americans.”

    That light at the end of the tunnel is getting a little brighter.

    Please share this with your colleagues and clients.

    Copyright 2021 by Sarah Perkins

  • Greater Phoenix Real Estate Update 11/20/2020

    To say that these are times are weird would be an understatement we have confusing elections, a worldwide pandemic, high unemployment, and the residential real estate sector is supporting the US economy.

    “Pending contracts are up strongly, implying that this winter may be one of the best winters for home sales activity. I mean, it’s not going to be spring or summer, so one has to compare this winter with other past winters. And by winter to winter comparison, this year could be one of the best based on the breakout of the pending contracts at a much higher level.”

    Dr. Lawrence Yun, Chief economist for NAR

    The chaos brings many questions. Are we in a housing bubble? No. Is this sustainable? No. Does that mean we are due for a crash? No.

    The AZ Market.

    Housing & Population Growth:

    The worst thing for a housing market is vacant homes.

    • 2001-2006:
      • Maricopa County’s population grew by 16%.
      • Single family inventory grew 23%.
      • Oversupply of housing.
      • Mortgages were easy to get, crazy appreciation, houses were purchased with no intention of being lived in, lots of vacant homes.
    • 2006-2019:
      • Maricopa County’s population grew up by 26%.
      • Single family inventory grew only 17%.
      • Undersupply of housing.
      • Not at risk for lots of vacancies, there is not enough housing for the population.
    • 2020:
      • Extreme undersupply of housing.
      • Inventory has been dropping for the past 6 years.
      • Very few vacant homes.

    Supply:

    In 2014 our inventory levels were normal at about 25,000 active listings. Inventory has been decreasing over the 6 years since then; we now have around 8,000 available listings, which is 63% below normal. In recent weeks, supply has stabilized for the most part and actually started to increase. The 13% increase of new listings in Q3 2020 – 5% increase in October alone – went unnoticed as they were absorbed as quickly as they came on the market. To put this into context, to have a crash, we would need supply levels like we had in 2007 (around 57,000 active listings) more than 7x the inventory today.

    Demand:

    While supply has stabilized, demand continues to rise. We are adding enough listings to maintain our listing position, even as demand increases. Demand is currently over 35% above normal. This time of year we normally see about 9,500 listings in escrow and this year we have over 13,000 in escrow. In normal cycles, November and December have decreased buyer demand, not this year!

    Sales & Appreciation:

    Sales volume is extraordinary for this time of year. In October 35.4% of sales closed over asking, the average is about $5,400. Sales were up 22% year over year in October.

    October 2020 had a year over year appreciation rate of 19.7%. Tina Tamboer with the Cromford Report expects this number to continue to increase through the end of the year. In January 2020 when Tina mentioned a 10% appreciation for 2020 it was shocking, this is, well, twice as shocking!

    Affordability:

    Affordable housing is quickly becoming a big focus both locally and nationwide. Prices are rising very quickly, at unsustainable levels. That does not mean that prices will drop, it means that they will eventually rise more slowly. This will happen either when supply increases or demand decreases. Prices only decrease in buyer’s markets, not in balanced markets.

    The Home Opportunity Index measures affordability, the normal range is 60-75, meaning that Americans earning the current median income, can afford 60-75% of the homes on the market. The higher the number the more affordable the city.

    Affordability dropped from Q2 2020 to Q3 2020. Nationally, it decreased from 59.6 to 58.3. Greater Phoenix remains more affordable than the national average but our quarter to quarter decrease was much more significant. We dropped from 64.8 in Q2 2020 to 61.9 in Q3 2020, which means Arizona households earning the median income of $72,300 can afford 61.9% of what is on the market. The median income did not change from Q2 to Q3. (NAHB/Wells Fargo)

    “Favorable mortgage rates will continue to bring fresh buyers to the market. However, the affordability situation will not improve even with low-interest rates because housing prices are increasing much too fast.”

    Dr. Lawrence Yun

    New Homes:

    • In October, greater Phoenix saw a 58% year over year increase in new construction sales. (Jim Belfiore)
    • In October, new homes made up 22% of all residential sales in greater Phoenix. (Jim Belfiore)
    • In addition to low supply driving prices up, lumber costs, due to shortages, have increased the cost of a new home by about $16,000. (Bureau of Labor Stats)

    Rentals:

    • Rents have increased by 17% since April. Increasing rents is a sign of true demand. Vacant properties cause declining prices. Vacancies are incredibly low.
    • Monthly mortgage payments are lower, for the median house, than are rents. Rents are increasing faster than purchase prices.
    • Median monthly lease for a single family 1,500-2,000 square foot rental increased by $255 year over year to $1,850.
    • According to Corelogic, in September, Phoenix rents saw a 6.9% year over year increase, the largest in the country. Phoenix has topped the chart every month of 2020.

    Real Estate News:

    • Yesterday the Department of Justice (DOJ) simultaneously filed an anti-trust lawsuit against NAR and a proposed settlement. The two organizations had confidentially reached an agreement that makes changes to NAR’s code of ethics and MLS policies regarding providing information on commissions and MLS participation. Click here for details from the DOJ. Click here for details from NAR.
    • Last week NAR’s board of directors approved changes to its Code of Ethics and Standards of Practice. According to Andrea Brambila of Inman, the changes apply “to all of a Realtor’s activities, not just those related to real estate; prohibit hate and harassing speech against protected classes; prohibit all discrimination, not just willful discrimination, against protected classes; and recommend that ethics violations be considered under membership qualification criteria.”
    • Similar to Picasa, Gold Gate, a new commercial real estate firm, is offering fractional ownership for luxury real estate worldwide. Owners can buy “shares” or months in different luxury properties all over the world.
    • A $15,000 first time homebuyer credit is part of the housing proposal created by President-elect Joe Biden. Dr. Lawrence Yun stated that it is helpful for first-time buyers entering the market but it is only a part of the solution. He went on to say, “But that’s not the full story, the full story is that stimulating the demand just by itself I think is insufficient. Right now the housing market is facing a significant housing shortage. So if we add further stimulus to the demand without addressing the supply… it will simply bump up the prices even higher.”

    Real Estate Trends:

    • In 2020 first time home buyers made up 31% of purchases, down from 33% in 2019 and the lowest level since 1987. (NAR) Increasing affordability challenges are the likely culprit.
    • October new home construction starts increased 14.2% year over year and hit the highest level since 2007. (US Census Bureau)
    • Year over year, iBuyer market share is expected to drop by 50% nationwide by the end of 2020. (Mike DelPrete)

    Lending & Forbearance:

    • Phoenix is the #2 city for VA loan origination during the fiscal year 2020, Phoenix saw a 115% increase year over year, behind Washington DC. (Phoenix Business Journal)
    • The MBA revised its 2020 end of the year projections:
      • An estimated $3.9 trillion in total mortgage originations for 2020, the highest since 2003 and 50% up from 2019.
      • At $1.97 trillion, 2020 will have a 91.5% year over year increase in refinance originations, again highest since 2003.
      • At $1.42 trillion, 2020 will have a 16% year over year increase in purchase originations, the highest since 2005.
    • Last week total mortgages in forbearance dropped to roughly 2.7 million or 5.47%, down from 5.67% the week before.
    • Over 76% of loans in forbearance are on extension, meaning they have been in forbearance for more than 6 months. Just under 21% of loans in forbearance are in the initial stages. (MBA)

    Final Thoughts:

    Jobs continue to recover (we have made up over 50% of the jobs lost), albeit at a slower rate than we saw over the summer. Economists continue to be cautiously optimistic and expect improvement and growth in all sectors. The good news of highly effective vaccines drove Wall Street confidence up. The FED is carefully watching and will adjust its treasury holdings and mortgage backed security purchases to keep things as stable as possible. A busy winter season will likely lead into even busier spring and summer seasons. There is a light at the end of this tunnel and it is getting closer.

    Please share this with your colleagues and clients.

    Copyright 2020 by Sarah Perkins

  • Greater Phoenix Real Estate Update 10/2/2020

    Our economic recovery is complicated and Q4 2020 will be a continuation of the complication. I expect we will see more of the same; tight inventory, high demand, continued recovery – slower than we would like but progress nonetheless, and holiday commercials will replace political ads.

    The AZ Market:

    Real estate consultant Jim Belfiore expects to see a coming wave of new home construction in Pinal County, specifically in Coolidge, Florence, and Casa Grande.

    Cromford Market Index (CMI): Is the best leading indicator available (balance is 100, above 100 is a seller’s market, below 100 is a buyer’s market, prices rise at 110, and drop at 90). Yesterday it was 350.2, way above the pre-COVID peak of 241 and over 200 points above the 145.2 we hit on May 15. The past 7 days saw a 5.1 point increase.

    Supply: New listings have increased by 11% but they were absorbed as quickly as they arrived so our total inventory remains very low. As of yesterday, our inventory is 63.8% below normal. Active listings excluding under contract accepting backups (UCB) are still around 8,100 (we should have 25,000) down over 41% year over year.

    Southeast Valley New Listings: This a bi-weekly comparison of new listings in 2019 and 2020 for Tempe, Mesa, Chandler, Gilbert, Apache Junction, and Queen Creek. 2019 followed the typical annual cycle showing more activity in the first half of the year. 2020 is not following any typical patterns. Which makes it impossible to know what the orange line will do next.

    Demand: Pending sales are up 25% year over year, huge despite our low inventory and time of year. Our demand is nearly 27% above normal. Demand rates slowed early in September and picked up some speed towards the end of the month.

    Sales & Prices: In August, 35% of homes closed over asking price. Phoenix metro area closed sales are up nearly 17% year over year. The median sales price is $326,800, up 17% year over year. Healthy appreciation is 3% annually.

    Southeast Valley New Listings, Pendings, and Closings:  This week over week comparison for Tempe, Mesa, Chandler, Gilbert, Apache Junction, and Queen Creek since March 15 illustrates our pandemic real estate rollercoaster.

    National Real Estate:

    In August we hit 6 million (seasonally adjusted annual rate) existing home sales. The last time we hit that number was December of 2006. Sales were up 10.5% year over year. This is particularly surprising since there were only 1.41 million properties (annualized rate) on the market in August, the lowest level on record, with limited data prior to 1999. (Matthew Gardner, Windermere Chief Economist)

    The Fannie Mae Home Purchase Sentiment Index illustrates consumer confidence for buying and selling real estate. According to the most recent update, from August, consumers believe it is a good time to buy. The buyer consumer confidence index has fully recovered to pre-pandemic levels. What is interesting is that seller consumer confidence has not fully recovered. This is seen in our low inventory levels with continued high demand.

    Many expect that when consumer confidence for selling fully rebounds is when we will see an increase in inventory. As sellers gain confidence and enter the market the extreme sales price appreciation will slow and buyers will have more choices. This will be good for buyers and for the overall health of the real estate market.

    Do not let the idea of rising inventory levels scare you. We desperately need more available listings across the country. Nationwide available inventory is down 36.4% year over year. (NAR)

    New home sales hit a 14 year high in August and crossed the 1M in sales mark. While new home listings decreased by 4.1% in August. Labor shortages and high cost of lumber are likely factors. (Redfin)

    Commercial Real Estate:

    • 90.1% of apartment renters made full or partial payments by September 20, up from 90% in August. (National Multifamily Housing Council)
    • Investor confidence continues to struggle for commercial real estate in most sectors. (Green Street)

    Real Estate News:

    • Spencer Rascoff, the former CEO of Zillow, is co-chairing a new special purpose acquisition company (SPAC) with a goal of taking a tech company public. It is through a SPAC Opendoor and UWM will go public. (Inman)
    • Realtor.com and Rocket Mortgage announced an advertising partnership that directs buyers to Rocket Mortgage’s pre-approval application for a digital mortgage approval.
    • Facebook announced it is working on a new augmented reality glasses project. Remember Google Glass? Similar but with newer technology. The project is several years from completion. Proptech investors are already planning on how to use it within real estate and property management. Starting in San Francisco and Seattle, Facebook has teams out collecting information via sensors gathering video, audio, and location data. Facebook is collecting data from inside buildings as well.

    Mortgage & Forbearance:

    • For the 16th straight week loans in forbearance decreased. They went from 6.93% to 6.87% dropping the number to roughly 3.4 million mortgages enrolled in a forbearance plan. (MBA)
    • Mortgage applications are up 22% year over year.

    “The share of loans in forbearance continues to decline and is now at a level not seen since mid-April. Many homeowners with GSE loans are exiting forbearance into a deferral plan and resuming their original mortgage payment, but waiting to pay the forborne amount until the end of the loan.”

    Mike Fratantoni, MBA’s Senior Vice President and Chief Economist

    Resources:

    Economy:

    • College enrollment is down 2.5% year over year. During economic downturns, community colleges tend to see an increase in enrollment however, this year enrollment is down 7.5%. (National Student Clearinghouse Research Center)
    • Personal savings rates have increased to 24% compared to early March when they were 7%. Bank deposits are up $2 trillion in 6 months. (Matt Stephani, Cavanal Hill Investment Management)
    • Elliott Pollack expects that nearly all industries in Greater Phoenix will be fully recovered by the end of 2022 and that housing will continue being the strongest sector.
    • Hotel occupancy rates in August in Arizona were 47.9%, up from 46.5% in July, and down from 64.6% in August 2019.
    • One in six or about 100,000 restaurants have closed permanently, leaving about 3 million people out of work and an expected $240 billion in losses by the end of the year. (New York Times)
    • In July, the most recent available data, US airlines carried 73% fewer passengers than in July 2019, better than the 96.1% drop seen in April 2020 compared to a year earlier. (US Department of Transportation)
    • Nationally, new business applications dropped from 27,000 a week to 18,000 a week from mid-March through mid-April. By early July they were up to 40,000 a week, the average is 22,500 a week. Applications have dropped since July but remain 20% above normal. This economy is driving entrepreneurship! (Elliot Eisenberg)

    Unemployment:

    • This morning September’s numbers were released and I will go deeper into those next week.
    • Elliott Pollack on Phoenix unemployment, “While the United States was losing 98 percent of all jobs created between the last recession and February, greater Phoenix only lost 41 percent.”
    • Initial unemployment claims were 837,000 last week, a decrease of 36,000. (US Department of Labor)
    • Last week, continuing unemployment decreased 980,000 dropping to 11,767,000. (US Department of Labor)

    Final Thoughts:

    Matthew Gardner said, “In all, the reports were very solid and show housing as being the shining light in an economy that is still mired by the COVID-19 pandemic.”

    Please share this with your colleagues and clients.

    Copyright 2020 by Sarah Perkins