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Armonk NY Homes

Builder confidence at record high | Armonk Real Estate

  • Builder confidence in the newly built, single-family home market jumped six points to 78 in August on the National Association of Home Builders/Wells Fargo Housing Market Index.
  • Anything above 50 is considered positive sentiment.
  • The cost of lumber is soaring not only because of increased demand but because mills shut down in April and May and did not expect to see the kind of strong demand they’re seeing now.

Potential buyers continue to flood into model homes across the nation, and that has builders feeling better about their business than they have in over 20 years. But rising lumber prices could sap the market’s momentum this fall.

Builder confidence in the newly built, single-family home market jumped six points to 78 in August on the National Association of Home Builders/Wells Fargo Housing Market Index. Anything above 50 is considered positive sentiment.

The index is now at the highest level in the 35-year history of the monthly series and matches the record set in December 1998. Builder sentiment plunged to 30 in April, when the coronavirus pandemic shut down the U.S. economy, but it recovered quickly as consumers suddenly sought more space in less urban areas.

“The demand for new single-family homes continues to be strong, as low interest rates and a focus on the importance of housing has stoked buyer traffic to all-time highs as measured on the HMI,” said NAHB Chairman Chuck Fowke. “However, the V-shaped recovery for housing has produced a staggering increase for lumber prices, which have more than doubled since mid-April. Such cost increases could dampen momentum in the housing market this fall, despite historically low interest rates.”

The cost of lumber is soaring not only because of increased demand but because mills shut down in April and May and did not expect to see the kind of strong demand they’re seeing now. There have also been issues with transportation and labor.

Of the index’s three components, current sales conditions rose six points to 84. Sales expectations in the next six months increased three points to 78, and buyer traffic jumped eight points to 65, its highest level in the history of the survey.

Builders are clearly benefiting from the severe shortage of existing homes for sale. There were too few homes to meet demand even before the pandemic struck, and now fewer homeowners are willing to list their homes for sale.

Mortgage rates dropped to a record low to start August but pushed higher last week, as Treasury yields rose and mortgage giants Fannie Mae and Freddie Mac increased fees to lenders. Unless rates really break much higher, which is unlikely, the latest increase is unlikely to throw much cold water on the very strong demand for housing.

“Housing has clearly been a bright spot during the pandemic and the sharp rebound in builder confidence over the summer has led NAHB to upgrade its forecast for single-family starts, which are now projected to show only a slight decline for 2020,” said NAHB chief economist Robert Dietz. “Single-family construction is benefiting from low interest rates and a noticeable suburban shift in housing demand to suburbs, exurbs and rural markets as renters and buyers seek out more affordable, lower density markets.”

Regionally, on a three-month moving, builder sentiment in the Northeast jumped 20 points to 65, in the Midwest it rose 13 points to 63. In the South sentiment increased 12 points to 71 and in the West it rose 15 points to 78.

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www.cnbc.com

Private streets in St Louis | Armonk Real Estate

A large and opulent mansion in an Italian Renaissance style is seen behind large stone and iron gates.
The 1909 Edward A. Faust house, seen behind the gates of Portland Place in St. Louis’s Central West End neighborhood.

If you were in St. Louis and wanted — hypothetically — to eat the rich, 1 Portland Place would be a good place to start.

The limestone-and-marble palazzo found at that address looms high above the hedge-fringed retaining walls lining Kingshighway, a major north-south thoroughfare where cars stream by at all hours of the day. But between the busy road and this street punctuated with opulent homes is an imposing stone entranceway with wrought-iron gates — one of many such structures St. Louis has built throughout its history to divide its communities.

Designed in 1909, the 18,000-square-foot mansion was a wedding present for Anna Busch, the daughter of beer magnate Adolphus Busch, whose name adorns the city’s ballpark. The mansion was purchased in 1988 by its current residents, Mark and Patricia McCloskey, personal-injury attorneys whose office is located in another mansion they own a 15-minute walk away. In a splashy St. Louis Magazine feature, the McCloskeys detail their “difficult” two-decade journey to restore 1 Portland Place’s marble staircases and damask silk walls — some of which required traveling to Italy to see the original Renaissance-era palaces that the home was modeled after.

The surrounding Central West End neighborhood is known for its lavish houses, well-groomed residents, and manicured landscaping. But on Sunday evening, the occupants of 1 Portland Place were pacing their front lawn in bare feet and mustard-stained shirts, brandishing firearms which they pointed at hundreds of Black Lives Matter protesters streaming down the sidewalk.

The protesters weren’t there to see the McCloskeys, they were just cutting through Portland Place on the way to the home of St. Louis Mayor Lyda Krewson who, on Friday, publicly read a list of names and addresses of constituents wanting to defund the police department. (Krewson owns a Central West End brownstone just a few blocks away.) But taking this street became a symbolic moment in itself as the protesters toppled the century-old roadblocks intended to keep St. Louis’ white ruling class separated from the rest of the city.

Although videos show protesters walking through an open gate which appears undamaged, Mark McCloskey told KMOV that protesters “smashed through the historic wrought iron gates of Portland Place, destroying them, rushed toward my home where my family was having dinner outside and put us in fear of our lives.”

“Private property, get out!” Mark McCloskey yelled at the protesters in a St. Louis Post-Dispatch video, emerging from between two-story white pillars and cradling an AR-15 assault rifle, as the crowd began a call-and-response: “Whose streets? Our streets!”

“It’s a public street, asshole.”

“We’re on the sidewalk!”

“This is all private property,” said Mark McCloskey to KMOV. “There are no public sidewalks or public streets. We were told that we would be killed, our home burned and our dog killed. We were all alone facing an angry mob.”

The same gates seen in the top photo are seen in a 1904 postcard that says The Louisiana Exposition, St. Louis, Missouri, 1904.
The 1904 World’s Fair turned nearby Forest Park into a destination, ensuring the status of Portland Place as one of the city’s premiere streets.

Private streets remain a stubborn relic of St. Louis’ Gilded Age. Homeowners paid for the streets and sidewalks to be paved long before the surrounding arteries were maintained by the city. In doing so, they purportedly reserved the authority to decide who could use them, which, according to an 1895 story in the St. Louis Republic, was “a privilege, not a right.” Whether they still functionally or symbolically shut people out — one can easily enter Portland Place just around the corner from the gates — the ornate gates, guard towers, and black powder-coated signs denoting “private street” in gold-embossed serif type dot the St. Louis urban landscape as reminders of these restrictions.

A revitalized movement to limit access to St. Louis streets emerged during the 1970s and 1980s, when the population of the city dwindled to half of what it had been in 1950, largely because white families moved to the surrounding suburbs. By the time Mayor Vincent Schoemehl left office in the mid-1980s, 285 streets had been blocked or diverted, most by decidedly less ornamental concrete bollards known as “Schoemehl pots.” One program, entitled “Operation Safestreet,” was praised at the time for lowering crime rates, though the long-term benefits have been less clear. In recent years, advocates have been trying to undo the closures in an attempt to knit the city back together, but some residents want to keep their cul-de-sac streets, especially the ones concentrated in high-wealth, predominately white areas like the Central West End.

There’s yet another another street-level delineation that keeps the Central West End exclusive: Delmar Boulevard, the east-west artery just a few blocks to the north, creates a barrier known as the Delmar Divide that slices through the city. Historically, neighborhoods north of Delmar were redlined because they were home to predominantly Black communities, while white families to the south received federal loans to buy or improve properties — funneling government capital directly to the renovation of those mansions.

The economic disparities are firmly entrenched. On Portland Place, a 1891 Queen Anne Victorian is on the market for $1.4 million. A few blocks to the north, just on the other side of Delmar, a six-bedroom home built four years later is for sale for $54,000.

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Single family building permits up 8.5% | Armonk Real Estate

Over the first four months of 2020 – and at the onset of the impact of the coronavirus, total single-family permits issued year-to-date (YTD) nationwide reached 283,344. On a year-over-year (YoY) basis, this is an 8.5% increase over the April 2019 level of 261,119.

Year-to-date ending in April, single-family permits across the four regions ranging from an increase of 11.5% in the South to a decline of 0.6% in the Northeast. In multifamily permits, except for the West (+2.1%), all other regions reported declines – Northeast (-13.4%), Midwest (-13.4%) and the South (-2.8).

Between April 2019 YTD and April 2020 YTD, 35 states saw growth in single-family permits issued while 15 states and the District of Columbia registered a decline. South Dakota recorded the highest growth rate during this time at 35.9% from 588 to 799, while single-family permits in the District of Columbia declined by 70.5%, from 95 in 2019 to 28 in 2020. The 10 states issuing the highest number of single-family permits combined accounted for 63.5% of the total single-family permits issued. Consider hiring a company like montrealmovers.com to help you though this stressful process.

Year-to-date, ending in April 2020, the total number of multifamily permits issued nationwide reached 143,194. This is 4.5% decline over the April 2019 level of 149,921.

Between April 2019 YTD and April 2020 YTD, 23 states recorded growth while 27 states and the District of Columbia recorded a decline in multifamily permits. North Dakota led the way with a sharp rise (837.1%) in multifamily permits from 35 to 328, while Michigan had the largest decline of 60.5% from 2,346 to 927. The 10 states issuing the highest number of multifamily permits combined accounted for 65.0% of the multifamily permits issued.

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eyeonhousing.org

Manhattan real estate contracts plunge 84% | Armonk Real Estate

  • There were a total of 160 contracts signed in May for Manhattan apartments, compared with 992 in May of 2019, according to UrbdanDigs.
  • The number of new listings has also plummeted, down 71% to 574, as sellers decide to keep their properties off the market until the city starts to reopen.
  • The pain in Manhattan real estate will be felt most at the top — where an oversupply of pricey new condo towers and penthouses were already weighing on prices.
A view of 432 Park Avenue October 15, 2104 the day after it earned the distinction of being the country's tallest residential skyscraper.

A view of 432 Park Avenue October 15, 2104 the day after it earned the distinction of being the country’s tallest residential skyscraper.Timothy A. Clary | AFP | Getty Images

The number of real estate contracts signed for Manhattan apartments plunged 84% in May compared with last year, as shutdowns to prevent the spread of Covid-19 and protests following the death of George Floyd,  effectively paralyzed the market.

There were a total of 160 contracts signed in May, compared with 992 in May of 2019, according to UrbdanDigs. The number of new listings has also plummeted, down 71% to 574, as sellers decide to keep their properties off the market until the city starts to reopen.

The pain in Manhattan real estate will be felt most at the top — where an oversupply of pricey new condo towers and penthouses were already weighing on prices. For apartments priced over $4 million, there were only 16 contracts signed in May for a total of $100 million — a nearly 90% decline from last May when 111 contracts were signed totaling $1.1 billion, according to the Olshan Report.

One of the most expensive deals in May, a contract for the sale of a co-op on Park Avenue that had been listed for $6.95 million, was sold by an owner who decided to move with his family to Scarsdale, New York in the wake of the coroanvirus pandemic, according to the Olshan Report.

While data on New York City residents moving to the suburbs is still largely anecdotal, there are some early signs of urban flight to surrounding suburbs. UrbanDigs did an analysis looking at “relative demand,” which it defines as new sales contracts divided by new listings.

The analysis found that while demand was down sharply in Manhattan, demand increased in Westchester County in New York, Greenwich, Connecticut, and in Bergen and Monmouth counties in New Jersey.

“In the near term, continued slack demand for Manhattan could create an oversupply situation, implying lower prices ahead, and increased suburban demand could create a supply crunch, pushing up prices,” according to the UrbanDigs report. “In the meantime, it remains to be seen if the easing of stay-at-home restrictions in Manhattan will unlock pent-up demand, but with the move to the suburbs already in place and further entrenched by the COVID-19 pandemic, any pickup in Manhattan demand seems unlikely to reverse the trend.”

Manhattan real estate brokers say they remain optimistic about deals once the city reopens and unleashes pent-up demand among sellers and deal-hungry buyers. Brokers have been unable to show apartments or hold open houses for buyers since March. While no date has been set for real estate to reopen as part of New York’s Phase 2, they are expecting a reopening around June 22.

Until there are more deals, brokers say they won’t know where prices in Manhattan will land or how much they will fall over time.

“I have a lot of people waiting to sell and a lot of people waiting to buy,” said Lauren Muss, a broker with Douglas Elliman. “It’s a question of when we can do business again.”

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cnbc.com

HGAR Covid-19 update | Armonk Real Estate


REGIONAL NEWS
COVID Crisis Accelerates Realtors’ Use of Tech in Mid-HudsonWith the real estate transaction process still done for the most part on a virtual basis, sales volume has slowed but has not stopped entirely.
Realtors are using technology tools such as Zoom, FaceTime, Skype and DocuSign, to get a deal to closing. Once the Mid-Hudson enters phase two of the reopening, many of the elements of a transaction can be done on a face-to-face basis with mandated safe practices. However, the tech tools now being employed may become common practice to many Realtors.
“The COVID-19 situation has accelerated the use of technologies and practices that the (real estate) industry hadn’t fully embraced,” said Katheryn DeClerck, an associate broker with Better Homes and Gardens/Rand Realty’s Goshen office. “People, who would’ve been out of the housing market in March and April, are going to hit it as soon as they can. They’re already out willing to see properties virtually.” See full Middletown Times-Herald Record story.

Business Council Task Force Issues Strategies, Recommendations to Assist in Westchester’s Economic Recovery from PandemicThe Business Council of Westchester issued an extensive list of strategies and recommendations to assist the state and county in their reemergence from the pandemic. The report offers recommendations from the 46 members of the BCW Westchester Economic Recovery Task Force who represent a wide range of industry sectors in the county including: Arts, Biotech, Energy/Environment; Entertainment, Hospitality, Transportation, Finance, Healthcare, Higher Education, Municipalities, Not-for-Profits, Professional Services, Real Estate Brokerage and Construction, Retail and Small Business.
In the report, among its recommendations concerning the real estate brokerage industry, the task force recommends extending tax credits to developers/owners who make capital expenditures for new construction and to owners/ leaseholders of older properties that install modern HVAC in their buildings with improved air circulation in tenant spaces and other common areas in multi‐tenanted buildings.
The task force also stated that it is “Vital for real estate agents to be allowed to practice in person services with appropriate health and safety protocols and social distancing to minimize contact.”
The full report, which is the first of several to be prepared by the task force, is available online at thebcw.org
NEW YORK STATE NEWS
Western NY Expected to Enter Phase 2 Tomorrow; Capital District on Track for Phase 2 on WednesdayGov. Andrew Cuomo in his daily COVID-19 Update briefing today said that the Western New York region is expected to begin phase two of the reopening process tomorrow.
He added that the Capital District is on track to enter phase two of the reopening on Wednesday. In addition, New York City is eligible to enter phase one of the reopening on Monday, June 8, while the Mid-Hudson is eligible to enter phase two on Tuesday, June 9.
Referencing the protests over the death of George Floyd, the governor expressed concern that the mass gatherings throughout the state may exacerbate the spread of COVID-19 and possibly set back the state’s efforts to restart its economy. See story CBSNews.com.
Assembly Speaker Says Not So Fast to Major Budget CutsNew York State Assembly Speaker Carl Heastie (D-Bronx) says Assembly members are prepared to return to Albany in the coming weeks to block potential major cuts to education, local governments, and hospitals that might be proposed by Gov. Andrew Cuomo in response to the lack of assistance from the federal government.
The governor has been warning that without proper funding from the federal government, he may be forced to cut spending in those areas by 20%.
“I think these cuts are unacceptable, and I think you would see the Legislature look to respond,” Heastie said. “None of us can fathom 20% cuts to education. Those are cuts that I don’t think we’ve ever imagined, we’ve ever seen, in recent times. We cannot tolerate those types of cuts,” Click to see Albany Democrat & Chronicle story.

NATIONAL NEWS
Will Civil Rights Protests Spark a Second Wave of COVID-19?Mass protests over police brutality and the recent death of George Floyd are worrying some public health officials that coronavirus cases could rise due to the mass gatherings.
Los Angeles Mayor Eric Garcetti warned that the protests could become “super-spreader events,” while Gov. Larry Hogan of Maryland expressed concern that his state would see a spike in cases in about two weeks. Atlanta’s Mayor Keisha Lance Bottoms advised people who were out protesting “to go get a COVID test this week.”
“The outdoor air dilutes the virus and reduces the infectious dose that might be out there, and if there are breezes blowing, that further dilutes the virus in the air,” said Dr. William Schaffner, an infectious disease expert at Vanderbilt University. “There was literally a lot of running around, which means they’re exhaling more profoundly, but also passing each other very quickly.” See full New York Times story.

PREPARING FOR PHASE TWO
The following are links to guidance from New York State for real estate firms reopening in Phase Two. The Mid-Hudson region is still in Phase One of the process that has all but shut down the real estate industry since late March. It could qualify for Phase Two reopening beginning on June 9.
Reopening NY: Real Estate Guidelines for Employers and EmployeesNYS Dept. of Health: Interim Guidance for Real Estate Services during the COVID-19 Public Health EmergencyNYS Business Reopening Safety Plan Template
The following are links to guidance from New York State for building management companies reopening once the Mid-Hudson enters Phase Two:
Commercial Building Management Guidelines for Employers and EmployeesThis Interim Guidance for Commercial Building Management during the COVID-19 Public Health EmergencyNYS Dept. of HealthNY FORWARD Safety Plan Template
Please continue to check for updates on HGAR.com COVID-19 Resources.
Stay safe and stay well.
Sincerely,
Richard Hagerty

Westchester unemployment soars to 24.6% | Armonk Real Estate

The devastating economic impact of the coronavirus is reflected in new unemployment data released Wednesday.
The devastating economic impact of the coronavirus is reflected in new unemployment data released Wednesday. (Shutterstock)

The devastating economic impact of the coronavirus in the Hudson Valley is reflected in new unemployment data released by the New York State Department of Labor Wednesday. While all 15 metro areas in New York lost private sector jobs since April 2019, the worst hit in the state was Orange-Rockland-Westchester, which lost 24.6 percent of its private sector jobs.

In comparison, private sector jobs in New York fell by 22.1 percent and in the nation by 14.5 percent.

The unemployment rate compared to a year ago spiked in all three metro regions of the lower and mid-Hudson Valley.

Metro RegionUnemployment rate April 2020Unemployment rate April 2019
Dutchess-Putnam14.13.2
Kingston14.63.3
Orange-Rockland-Westchester14.33.3

In comparison, in April 2020, New York State’s seasonally adjusted unemployment rate increased from 4.1 percent to 14.5 percent. This change (+10.4 percentage points) was the state’s largest recorded monthly increase since current record keeping began in 1976. In addition, the number of unemployed New York State residents increased by 931,600, while the labor force dropped by 307,600 – both monthly records.

The number of unemployed New Yorkers increased by 931,600 over the month, from 388,700 in March to 1,320,300 in April 2020, representing the largest monthly uptick on record.

The April month-over-month decline in private sector payroll employment is the largest in the history of the current series (which goes back to 1990) and brought employment to its lowest level since February 1994.

Rates are calculated using methods prescribed by the U.S. Bureau of Labor Statistics. The state’s area unemployment rates rely in part on the results of the Current Population Survey, which contacts approximately 3,100 households in New York State each month.

Those collecting unemployment are also receiving a $600 supplemental weekly benefit through the end of July. Democrats in Congress are pushing to have that benefit extended through January 2021, but Senate Republicans are cool to the idea, arguing that the increase in unemployment benefits is creating a disincentive for people to go back to work.

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patch.com.new-york/bedford/

Mortgage Lenders Tighten Screws on Credit | Armonk Real Estate

Mortgage rates are at record lows, but borrowers hoping to take advantage are running into the toughest loan-approval standards in years.

Over the past month, lenders have put in place higher credit-score and down payment requirements, and in some cases stopped issuing certain types of loans altogether, in effect shutting down a large swath of the mortgage market. If you’re trying to find an area mortgage lender, we are the corporate to show to. we’ve been serving Kansas City since 1996 with honesty, integrity, and expertise. Making us one among the simplest companies to settle on from. We are locally owned and operated and offer rock bottom rate. Through our unique home equity credit programs, we offer a stress-free home buying experience. We are committed to creating the method simple and enjoyable. We’ve streamlined the closing process to make sure a smooth and stress-free process. As an experienced lender, we’ll guide you to the simplest land loans; Conventional Loans (Fannie Mae and Freddie Mac), FHA (Federal Housing Administration), VA Loans, USDA, HELOC or Jumbo) and therefore the best lending program to fit your needs. With numerous financial products, we are certain that we’ll have the right product with the simplest rate of interest for you. Click here to read more about mortgage loans.

You’ve made the decision that you need some extra assistance in meeting your monthly financial obligations. One of the best options for those over sixty-two years of age who own their own home is a reverse mortgage. Instead of you paying the bank each month, the bank will actually pay you. The loan can be taken out as a lump sum, a fixed monthly payment or as a line of credit. You do not have to pay back the loan until you sell your home or move out permanently. There are many reverse mortgage lenders such as banks and credit unions that you can contact to obtain details about these loans. Rates may vary so you will want to check around with various banks before deciding. There are several types of reverse mortgage loans and they include the following:

Home Equity Conversion Mortgage – HECMs are the oldest types of reverse mortgage loans and the most popular. They are insured by the federal government through the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development. The amount of money you can take out as a reverse mortgage loan depends upon your age, the appraised value of your home, current interest rates and the location of your home. The older you are and the higher the equity (what it would sell for less what you still owe), the higher the loan amount can be. For 2006, the loan limit for a home in a rural area is $200,160 while the limit for high cost areas is $362,790.

Another reverse home mortgage product that you can obtain from a lender is the Fannie Mae Home Keeper. Fannie Mae is the largest investor of home mortgages in the country and a major investor in reverse mortgages. Fannie Mae developed its own reverse mortgage product as an alternative to the HECM to address the needs of customers who had a higher property value on their home. Home Keeper loans can be larger than HECMs because their mortgage limit is higher. Another Fannie Mae reverse mortgage product is the Home Keeper for Home Purchase program. This is for seniors who wish to use the reverse mortgage loan to buy a new home. For example, let’s say someone sold his home for a $60,000 profit and wants to buy a new house for $100,000. He could get a reverse mortgage using money from a Home Keeper loan so he would not have to use his savings to purchase the more expensive home.

The triggers, industry executives say, include lenders becoming risk-averse during the coronavirus crisis, knock-on effects of Congress allowing millions of borrowers to delay their monthly payments, and policies implemented amid the pandemic by mortgage giants Fannie Mae and Freddie Mac. The impact has been dramatic, with one model showing mortgage credit availability has plunged by more than 25% since the U.S. outbreak of the virus.

Interested on studying real estate? To earn a real estate license, or to keep up with your real estate continuing education, many Realtors take online real estate courses as a practical and convenient solution to sitting in a classroom.

The tightened lending could add another headwind for the nation’s besieged economy by dampening home sales just as some states lift stay-at-home orders and the spring months herald the traditional buying season. Already, mortgage refinances are coming in at a much slower pace than analysts would expect, considering the rock-bottom borrowing rates.

In March, riskier borrowers “could get a mortgage but just pay a higher price than other people,” said Michael Neal, a senior research associate at the Urban Institute Housing Finance Policy Center. “Now, some people are just not going to get mortgages.”

JPMorgan Chase & Co. tightened its standards last month, requiring borrowers to have minimum credit scores of 700 and to make down payments of 20% of the home price on most mortgages, including refinances if the bank didn’t already manage the loan.

Wells Fargo & Co. increased its minimum credit score to 680 for government loans that it buys from smaller lenders before aggregating them into mortgage bonds.

The banks’ revised standards are far above the typical minimum score of 580 and down payment of 3.5% that borrowers need to qualify for home-buying programs supported by the federal government.

Wells Fargo is no longer letting borrowers refinance their mortgages while cashing out home equity, and both Wells and JPMorgan have suspended new home-equity lines of credit. Truist Financial Corp. has suspended some cash-out refinances for jumbo loans with high balances because of economic conditions, a spokesman said.

Refinance Hesitancy

There are signs that banks are even trying to limit regular refinances. Wells Fargo on Thursday quoted a refinance rate of 4% for a 30-year fixed-rate mortgage, more than half a percentage point higher than it quoted for the same loan if used to buy a home.

A Wells Fargo spokesman said the company believes its rates are within the range of what they see from other lenders. He said the company suspended home-equity lines of credit in light of uncertainty surrounding the economic recovery.

A JPMorgan spokeswoman said the bank’s changes are temporary and due to the unclear economic outlook.

Refinances surged in early March as homeowners utilized low rates to reduce their monthly payments. But refinance rate locks, a forward-looking measure of refinance activity, had plunged 80% from their peak by mid-April, according to Black Knight Inc., a mortgage information service. The company said that even the steep increase in unemployment in March and April couldn’t explain why refinance activity fell so dramatically.

Fannie-Freddie Policies

Industry executives say the tighter underwriting is partly in response to policies put in place by Fannie and Freddie that make it expensive or risky to make certain kinds of mortgages. For instance, Fannie and Freddie said last month they would buy mortgages where the borrower had already entered forbearance. But the mortgage-finance companies excluded cash-out refinances. Mortgage Bankers Association Chief Economist Michael Fratantoni said that prompted many lenders to limit issuance of those products.

Fannie, Freddie and government agencies such as the Federal Housing Administration set standards for the mortgages they’re willing to back. For example, the FHA will insure loans where the borrower has a credit score of as low as 580 with a 3.5% down payment.

However, mortgage lenders sometimes set their own, stricter standards, even if they intend to sell the loans to Fannie or Freddie or have them insured by the FHA. Fannie and Freddie, which have been under the U.S. government’s control since the 2008 financial crisis, buy mortgages from lenders and package them into trillions of dollars of bonds with guarantees that protect investors against the risk of borrowers defaulting.

Mortgage credit availability has fallen 26% since the end of February, the Mortgage Bankers Association said in a Thursday statement, citing an index of lending standards. Most of the pain has been for loans not supported by the government. Still, mortgages backstopped by Fannie, Freddie and federal agencies in April did have the toughest credit terms that such loans have had in more than five years.

Servicers’ Peril

Many lenders appear to have put restrictions in place in response to the $2.2 trillion stimulus bill that lawmakers passed in March. Under the new law, lenders must let borrowers with government-guaranteed mortgages delay as much as a year’s worth of payments if they were impacted by coronavirus.

Even though they eventually get reimbursed, mortgage servicers are required to advance the missed payments to bond investors. That makes lenders less eager to offer loans to borrowers who they think will need forbearance, such as consumers with low credit scores and those who can only afford minimal down payments.

The MBA’s Fratantoni said the credit crunch has been exacerbated by the reticence of federal regulators to establish a liquidity facility that would help servicers advance payments to bondholders. While Fratantoni said large servicers may not go under, they’re still protecting themselves by tightening mortgage requirements.

“I can’t imagine any lender wanting to be aggressive at all in this environment,” said Moody’s Analytics chief economist Mark Zandi. “It’s how far deep into the bunker are you.”

Read Newsmax: Mortgage Lenders Tighten Screws on U.S. Credit in Echo of 2008 | Newsmax.com

NYC rental market tumbles down | Armonk Real Estate

New York apartment leases plunged last month as coronavirus stay-at-home orders kept the city’s renters from moving.

In Manhattan, new agreements fell 38% in March from a year earlier, the second-biggest decline in 11 years of record-keeping by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. In Brooklyn and Queens, signings were down 46% and 34%, respectively, the firms said in a report Thursday.

Restrictions on gatherings have made in-person showings illegal, and landlords, worried about units going vacant during a recession, did what they could to retain current tenants.

“Well, what are you going to do?” said Jonathan Miller, president of Miller Samuel. “Tenants can’t really look at new apartments other than virtually. And then they’d have to move, and moving has become one of the biggest problems because many buildings are restricting or prohibiting moving trucks.”

New leases that were signed set price records — a vestige of the overheated demand that existed before the pandemic as would-be buyers sat out a sluggish sales market.

Rents for the smallest apartments reached new highs in both Manhattan and Brooklyn. The monthly median for studios in Manhattan jumped 9.3% to $2,843, while one-bedroom costs climbed 4.4% to $3,650.

Brooklyn studios and one-bedrooms rented for a median of $2,700 and $2,995, respectively.

Those gains aren’t likely to continue. A prolonged economic shutdown costing thousands of jobs will leave many tenants unable to pay rent and fewer people seeking to move to new apartments in the city.

“There’s going to be downward pressure on rents going forward,” Miller said.

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blommberg.com/news/articles

Pending home sales jump 5.7% yoy | Armonk Real Estate

Pending home sales rebounded in January, ticking up following a decline in December, according to the National Association of Realtors®. Only the West region reported a minor drop in month-over-month contract activity, while the other three major regions each saw pending home sales grow. Year-over-year pending home sales activity was up in all four regions and thus up nationally compared to one year ago.

The Pending Home Sales Index (PHSI),* www.nar.realtor/pending-home-sales, a forward-looking indicator based on contract signings, grew 5.2% to 108.8 in January. Year-over-year contract signings increased 5.7%. An index of 100 is equal to the level of contract activity in 2001.

“This month’s solid activity – the second-highest monthly figure in over two years – is due to the good economic backdrop and exceptionally low mortgage rates,” said Lawrence Yun, NAR’s chief economist.

Infographic: January 2020 Pending-Home Sales

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“We are still lacking in inventory,” he said, noting December’s and January’s combined supply was at the lowest level since 1999. “Inventory availability will be the key to consistent future gains.”

Pointing to data from active listings at realtor.com®, Yun says the year-over-year increases show a strong desire for homeownership. Markets drawing some of the most significant buyer attention include Fort Wayne, Ind.; San Francisco, Calif.; Sacramento, Calif.; Lafayette, Ind.; and San Jose, Calif.

“With housing starts hovering at 1.6 million in December and January, along with the favorable mortgage rates, among other factors, 2020 has so far presented a very positive sales climate,” Yun said. “Moreover, the latest stock market correction could provide exceptional, even lower mortgage rates for a few weeks, and that would help bring about a noticeable upturn in the coming months.”

January Pending Home Sales Regional Breakdown

The Northeast PHSI rose 1.3% to 92.9 in January, 1.2% higher than a year ago. In the Midwest, the index increased 7.3% to 105.3 last month, 6.5% higher than in January 2019.

Pending home sales in the South grew 8.7% to an index of 129.4 in January, a 7.1% increase from January 2019. The index in the West declined 1.1% in January 2020 to 92.6, still a jump of 5.5% from a year ago.

The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.

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*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20% of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

NOTE: Existing-Home Sales for February will be reported March 20. The next Pending Home Sales Index will be March 30; all release times are 10:00 a.m. ET.

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https://www.nar.realtor/newsroom/pending-home-sales-ascend-5-2-in-january

Existing home sales surge | Armonk Real Estate

After a slight decline last month, existing home sales, released by the National Association of Realtors (NAR), surged to near two-year high in December.

Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, rose 3.6% to a seasonally adjusted annual rate of 5.54 million in December, the highest level since February 2018. On a year-over-year basis, sales were 10.8% higher than a year ago.

The first-time buyer share slightly decreased to 31% in December from 32% last month and a year ago. The December inventory decreased to 1.40 million units from 1.64 million units in November and 1.53 million units a year ago. At the current sales rate, the December unsold inventory represents a 3.0-month supply, down from a 3.7-month supply last month and a year ago. Unsold inventory has dropped for seven consecutive months.

Homes stayed on the market for an average of 41 days in December, up from 38 days last month but down from 46 days a year ago. In December, 43% of homes sold were on the market for less than a month.

The December all-cash sales shared 20% of transactions, unchanged from last month and down slightly from 22% a year ago.

The December median sales price of all existing homes was $274,500, up 7.8% from a year ago, representing the 94th consecutive month of year-over-year increases. The median existing condominium/co-op price of $255,400 in December was up 6.0% from a year ago.

Regionally, all regions saw an increase in existing home sales in December except for the Midwest, compared to previous month. Sales in the Midwest declined 1.5% from last month. On a year-over-year basis, sales rose in all four major regions, ranging from 8.8% in the Northeast to 12.4% in the South.

Though the housing market has been lifted this year by lower mortgage rates and continuing job expansion, the growth has also been curbed by low housing inventory and elevated home prices. As economic conditions are expected to remain favorable for homebuyers, more inventory is needed for further home building gains in 2020.

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