Apr 9, 2020 - Economy & Business

Coronavirus is squeezing more people out of the housing market

Dion Rabouin, author of Markets
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Data: Federal Home Loan Mortgage Corporation; Chart: Axios Visuals

The $2.2 trillion coronavirus stimulus is helping existing homeowners but also causing dislocations in the U.S. mortgage market. This, combined with the pandemic, is weakening access to and demand for mortgages even with rates at record lows.

Why it matters: In addition to the expected downturn in the housing market from nationwide shelter-in-place orders, the current shock is making it harder and more expensive for individuals, especially those with lower credit scores and less cash, to get a mortgage.

  • Growing purchases by corporate entities and investors over the past decade already have spiked prices and pushed many individuals out of the housing market.
  • The end result of the COVID-19 crisis may be that even more Americans are unable to buy a home.

What's happening: As a result of the CARES Act provision allowing delays in mortgage payments for borrowers with government-backed mortgages of at least 90 days and up to one year, forbearance requests are pouring in at an unprecedented rate.

By the numbers: Forbearance requests rose by 1,270% between the week of March 2 and the week of March 16, and another 1,896% between the week of March 16 and the week of March 30, MBA reported earlier this week.

  • Mortgage applications have decreased significantly in recent weeks, dropping 18% percent for the week ending April 3 from the prior week. Purchases rates fell by 33%.

What we're hearing: Many first time buyers and those with mortgages insured by the Federal Housing Administration or so-called high-balance or jumbo loans, "are going to see higher rates," Mike Fratantoni, chief economist at the Mortgage Bankers Association, tells Axios.

  • "And there is a point at which they’re just not going to be able to get a loan from nearly as many lenders as they would have three weeks ago."

Go deeper: The coronavirus economy will devastate those who can least afford it

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Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.

The Department of Health and Human Services moved on Thursday to require that an individual's race, ethnicity, age and sex be submitted to the agency with novel coronavirus test results.

Why it matters: Some cities and states have reported the virus is killing black people at disproportionately high rates. There are gaps in the national picture of how many people of color are affected, since the data has not been a requirement for states to collect or disclose.

Coronavirus cases spike in Texas, Oregon and Arizona

Data: The COVID Tracking Project, state health departments; Map: Andrew Witherspoon, Sara Wise, Naema Ahmed/Axios

Texas, Arizona and Oregon saw significant spikes last week in new coronavirus infections, while cases also continued to climb in a handful of states where steady increases have become the norm.

Why it matters: Nationwide, new cases have plateaued over the past week. To get through this crisis and safely continue getting back out into the world, we need them to go down — a lot.

12 hours ago - Health

HHS requests data on race and ethnicity with coronavirus test results

A nurse writes a note as a team of doctors and nurses performs a procedure on a coronavirus patient in the Regional Medical Center on May 21 in San Jose, California. Photo: Justin Sullivan/Getty Images

The Department of Health and Human Services moved on Thursday to require that an individual's race, ethnicity, age and sex be submitted to the agency with novel coronavirus test results.

Why it matters: Some cities and states have reported the virus is killing black people at disproportionately high rates. There are gaps in the national picture of how many people of color are affected, since the data has not been a requirement for states to collect or disclose.