Homeowners Gain $2.9 Trillion in Equity in Q2 2021. Homeowners with mortgages gained $2.9 trillion in equity in the second quarter of 2021, a 29.3% year-over-year increase, according to a new report by CoreLogicreleased Wednesday. This marks an average gain of $51,500 per borrower since the second quarter of 2020. “Home equity wealth is at a record level and will bolster economic activity in the coming year,” Dr. Frank Nothaft, chief economist for CoreLogic, said in a statement. “Higher wealth spurs additional consumer expenditures and also supports room additions and other investments in homes, adding to overall economic activity.” “The growth in homeowner equity provides a strong financial cushion for tens of millions Americans. For those most impacted by the pandemic, equity gains will help play a critical role in staving off foreclosure,” Frank Martell, president and CEO of CoreLogic, said in a statement. “Based on projected increases in economic activity and home values over the next year, we expect to see further gains in equity and a corresponding drop in negative equity, forbearance rates and foreclosure.”
* Mortgage Applications Rise, Reflecting Improved Inventories. The volume of applications for first mortgages grew by 4.9 percent on a seasonally adjusted basis during the first full week after Labor Day. “There was a resurgence in mortgage applications the week after Labor Day, with activity overall at its highest level in over a month, and purchase applications jumping to a high last seen in April 2021,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Housing demand is strong heading into the fall, despite fast-rising home prices and low inventory. The inventory situation is improving, with more new homes under construction and more homeowners listing their home for sale.”
* Homebuilder Sentiment Improves For First Time in Three Months. Homebuilders in the single-family construction market are feeling better, as lumber prices are way down from sky-high levels and buyer demand is growing. Builder sentiment rose 1 point in September to 76, according to the National Association of Home Builders/Wells Fargo Housing Market Index. It was the first increase in three months. “The September data show stability as some building material cost challenges ease, particularly for softwood lumber. However, delivery times remain extended and the chronic construction labor shortage is expected to persist as the overall labor market recovers,” said NAHB Chairman Chuck Fowke. “The single-family building market has moved off the unsustainably hot pace of construction of last fall and has reached a still hot but more stable level of activity, as reflected in the September HMI,” said NAHB Chief Economist Robert Dietz. “While building material challenges persist, the rate of cost growth has eased for some products, but the job openings rate in construction is trending higher.”
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