Record-Breaking Job Gains Would Normally Hurt Rates, But…

This week’s economic data included the biggest-ever gain in Pending Home Sales, a leading indicator for the housing market. Meanwhile, mortgage rates pushed down to new all-time lows yet again. But at what cost? The most pessimistic way to explain the surge in home sales is to say it was only made possible by the record-setting declines in the past few months. That’s mostly true, but it fails to give credit to what the industry and government officials have been doing to help jump start economic activity. Would sales bounce back like this without all-time low mortgage rates and a stock market recovery (both made possible by emergency intervention from the Federal Reserve)? Would consumers be as comfortable spending money without the promise of additional fiscal stimulus and other support programs
Record-Breaking Job Gains Would Normally Hurt Rates, But…
Record-Breaking Job Gains Would Normally Hurt Rates, But…

Four experts break down the blowout June jobs report

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Austan Goolsbee, professor at the University of Chicago Booth School and former chairman of the Council of Economic Advisors, Glenn Hubbard, Columbia Business School professor and former CEA chairman, and Nada Eissa, Georgetown professor and former Deputy Assistant Treasury Secretary for economic policy, and CNBC's Steve Liesman join "Squawk Box" to discuss the blowout June jobs report.

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Four experts break down the blowout June jobs report
Four experts break down the blowout June jobs report

U.S. economy adds 4.8 million jobs in June, vs expected increase of 2.9 million

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CNBC's Steve Liesman and CNBC's Rick Santelli report the latest employment data, including weekly jobless claims for week ending June 27 and the June jobs report.

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U.S. economy adds 4.8 million jobs in June, vs expected increase of 2.9 million
U.S. economy adds 4.8 million jobs in June, vs expected increase of 2.9 million

Fed's Bullard warns of financial crisis risks

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The "Squawk Box" crew talk about several of the morning's top stories.

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Fed's Bullard warns of financial crisis risks
Fed's Bullard warns of financial crisis risks

Is the Health Crisis Driving Buyers Out of Urban Areas?

Is the Health Crisis Driving Buyers Out of Urban Areas? | Simplifying The Market

The pandemic has caused consumers to re-examine the components that make up the “perfect home.” Many families are no longer comfortable with the locations and layouts of their existing homes. The allure of city life (more congested) seems to be giving way to either suburban or rural life (less congested). The fascination with an open floor plan seems to be fading as people are finding a need for more privacy while working from home.

Recently, news.com released a report that revealed how buyers’ views of listings are leaning heavily to more suburban and rural properties. Here are the year-over-year percentage increases in views per property type:

  • Urban – 7%
  • Suburban – 13%
  • Rural – 16%

In the report, Javier Vivas, Director of Economic Research for realtor.com, gives these numbers some context:

“This migration to the suburbs is not a new trend, but it has become more pronounced. After several months of shelter-in-place orders, the desire to have more space and the potential for more people to work remotely are likely two of the factors contributing to the popularity of the burbs.”

Realtor Magazine also just reported that the desire to move is strongest in our city markets:

“Nearly 30% of respondents living in a high-density urban area say that the pandemic is prompting them to want to move by the end of the year…This is more than double the rate of those living in rural parts of the country, where residents are much more likely to stay put rather than to relocate.”

New Construction Also Seeing a Surge in Views

Since the pandemic has altered how consumers think about floor plans, builders are anticipating how future homes will change. In a recent press release by Zillow, it was explained that:

  • Builders believe as people spend more time at home during the pandemic, buyers are realizing which features of their homes are working and not working.
  • Homebuilders predict open-concept floor plans will be a thing of the past, as people now value more walls, doors, and overall privacy.
  • New construction, which offers the chance to personalize home features, saw its listing page views grow by 73% over last May.

The Virus is Even Impacting the Luxury Second-Home Market

It appears that COVID-19 is impacting the luxury market too. In an article released last week titled, Luxury Buyers Return to Market in Force, Danielle Hale, Chief Economist for realtor.com reported:

“Stay at home orders and social distancing have put a new value on the extra space. We’re seeing this in the luxury market as well, which could mean there is renewed interest from high-end buyers to find a second-home that is within driving distance from their primary residence.

Much like the suburbs are gaining favor with home shoppers, second home markets are seeing increased interest from luxury buyers…Views of luxury properties accelerated 56% in The Hamptons, 28% in Palm Springs and 24% in Greenwich compared to January trends.”

Bottom Line

It appears that a percentage of people are preparing to leave many American cities. Some of these moves will be permanent, while others will be temporary (such as a getaway to a second home). In either case, many consumers are on the move. Real estate professionals are ready and willing to help in any way they can.

Is the Health Crisis Driving Buyers Out of Urban Areas?
Is the Health Crisis Driving Buyers Out of Urban Areas?

Purchase Mortgage Applications Fall Again as Inventory Dries Up; Rates Staying Low

Applications for both refinancing and purchase mortgages retreated last week , pulling the Mortgage Bankers Associations (MBA’s) Market Composite Index lower for the second time in as many weeks. MBA said the index, a measure of application volume, declined by 1.8 percent on a seasonally adjusted basis during the week ended June 26 and was down 2.0 percent on an unadjusted basis. While the Refinance Index ticked down 2 percent from the week ended June 19, low interest rates kept the refinancing volume 74 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 61.2 percent of total applications from 61.3 percent the previous week. The seasonally adjusted Purchase Index dipped 1 percent and the unadjusted version was down 2 percent compared with the
Purchase Mortgage Applications Fall Again as Inventory Dries Up; Rates Staying Low
Purchase Mortgage Applications Fall Again as Inventory Dries Up; Rates Staying Low

Some unintentional consequences with Fed holding rates artificially low: Angel Oak's Navid Abghari

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Navid Abghari, senior portfolio manager at Angel Oak Capital Advisors, and Tom Porcelli, U.S. economist at RBC Capital Markets, join 'Power Lunch' to discuss the minutes from the latest Federal Reserve meeting and what it means for the market.

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Some unintentional consequences with Fed holding rates artificially low: Angel Oak's Navid Abghari
Some unintentional consequences with Fed holding rates artificially low: Angel Oak's Navid Abghari

Lawrence Lindsey: There's enormous pent-up demand in the U.S. economy

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CNBC's Kelly Evans is joined by Larry Lindsey of The Lindsey Group to break down the shape of recovery and what he predicts for the 2020 Presidential Election.

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Lawrence Lindsey: There's enormous pent-up demand in the U.S. economy
Lawrence Lindsey: There's enormous pent-up demand in the U.S. economy

ISM manufacturing index higher than expected at 52.6

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CNBC's Rick Santelli reports on the latest round of economic data as Q3 begins.

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ISM manufacturing index higher than expected at 52.6
ISM manufacturing index higher than expected at 52.6

Private payrolls rise 2.37 million in June, ADP reports

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Private payrolls rose by 2.369 million in June, a bit below the 2.5 million estimate from economists surveyed by Dow Jones, according to ADP. CNBC's Steve Liesman reports.

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Private payrolls rise 2.37 million in June, ADP reports
Private payrolls rise 2.37 million in June, ADP reports