The pandemic has changed the way people view their homes. From the stay-at-home orders to the scare of spreading the virus, the home is everyone’s safe haven. Luckily today’s technology has enabled many Americans to work from home. More and more people are reassessing what they want in a home such as a home office, flex space and outdoor living space.

The housing market is booming in fact, home sales are higher than they were before the pandemic. The existing and new home sales are the highest level we have seen in over a decade. With the increase in home sales, comes an increase in the demand for building materials and labor.

Lumber has been in very high demand during recent months. Not only are builders building new homes but many homeowners are remodeling their current homes. Home offices and remote work locations have also spiked the demand for this hot commodity. The November 2020 Random Length Lumber contract shows a low set during the height of COVID in April at 277 but then in August lumber was set at 820.

The copper market has also been greatly affected by the booming housing market. Looking at the September 2020 copper futures contract, we witness a low set on March 19 at 1.99, followed by a big move up to 3.08 by September 15. Copper is also valuable to the technology industry where it is used for building servers, semiconductors and switches.

Currently, sales of single-family homes are up 24% from the spring, existing condominiums and co-ops are up 32%. Lumber and copper numbers are a great way to measure and predict the direction the housing industry will go, knowing which markets are directly affected by the growing demand for single-family units can be important for every trader and investor.

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Freddie Mac announced another round of record-low mortgage rates. This will be the ninth record low since March 2020. The first full week of September saw a 2.86% drop in the average interest rate on a 30-year fixed-rate mortgage and a 2.37% drop on a 15-year fixed-rate.

“Mortgage rates have hit another record low due to a late-summer slowdown in the economic recovery,” said Sam Khater, Freddie Mac’s chief economist.

Home sales remain very strong according to Joel Kan, the Mortgage Bankers Association’s associate vice president of economic industry and forecasting. Both the loan size and applications for new mortgages rose. For the week ending on September 4, applications were up 3% and the average loan size was the highest amount since the Mortgage Bankers Association began recording at $368,600.

“Homebuyers continue placing offers on homes, pushing existing inventory toward historic lows,” said George Ratiu, Realtor.com’s senior economist. “Would-be sellers are stuck in their homes, struggling to find their next house amid a dearth of supply, further contributing to the decline in inventory.”

The limited supply of homes for sale is driving the price higher. Home prices are 11% higher than they were a year ago. Homebuyers have to purchase less home at a higher price.

Refinancing for homeowners has also been on the rise. The record-low interest rates makes it more affordable for homeowners who would like to refinance.

Black Knight, a mortgage data company, says there are approximately 19.3 million high-quality refinance candidates. This number includes 43% of all 30-year mortgage holders, making this the largest group of this kind there has ever been.

Whether you are looking for your first home, a new home or refinancing your current home, now is the time. The mortgage rates are very low and FHFA also announced Fannie Mae and Freddie Mac will exempt refinance loans with balances under $125,000 from the fee. The housing market is the strongest we have seen in a long time and only proves to make a great investment for the future.

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The housing industry and the residential construction industry is still the catalyst for a rebounding economy. Single-family permits and starts gained ground in July. Low-interest rates and the importance of homes due to COVID-19 have fueled the buyer’s market.

According to the NAHB/Wells Fargo Housing Market Index (HMI), single-family permits rose 17% in July. So far in 2020, the total permits for single-family homes on year-to-date bases are up around 6% higher than the first seven months of 2019.

The HMI is based on data collected from the NAHB’s monthly survey which the National Association of Home Builders has been conducting for 30 years. It measures builder’s perceptions of the current single-family home sales and expectations of sales for the next six months. Builders will rate their perception as good, fair or poor.

There are signs that more gains for single-family starts are on the horizon. This can be determined by the fast pace of permits and the renewal of builder confidence. The graph shows that single-family construction has been on the rise since it hit a low in April from the pandemic. April had a 679,000 annual pace while July saw a 940,000 seasonally adjusted annual rate.

Per region single-family starts are up and down depending on the region. In the Northeast single-family starts are down on a year-to-date basis 1%, in the South, they are up 0.7%, in the Midwest they are up 3.4% and in the West, they are also in the positive at 0.5%.

So far the housing market has remained strong during these unprecedented times. The count of single-family homes in various stages of construction is still on the rise. Now is a good time to sell or purchase a home.

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According to the Mortgage Bankers Association, the total mortgage application volume rose 4.1% the week of July 13th from the week before. Homebuyer demand is hotter than ever, especially with the record low mortgage rates.

“Mortgage applications increased last week despite mixed results from the various rates tracked in MBA’s survey,” said Joel Kan, an economist for the trade group. “The average 30-year fixed-rate mortgage rose slightly to 3.20%, but some creditworthy borrowers are being offered rates even below 3%.”

There was a small increase to 3.20% in the average contract interest rate for a 30-year fixed-rate mortgage with a conforming loan balance of $510,400 or less. For loans with a 20% down payment points (including the origination fee) went up from 0.33 to 0.35. The average on the 30-year fixed mortgage was 88 basis points higher than it was at the end of June.

This small jump encouraged homebuyers to act which increased the refinance application volume up 5% for the week and 122% from the same week a year ago. According to the seasonally adjusted index data “the refinance share of mortgage activity increased to 64.8% of total applications from 64.2% the previous week.”

Mortgage applications to purchase a home rose 2% the week of July 13th and were reported at 19% higher than this time last year. That marked the ninth straight week of annual gains. According to Fannie Mae chief economist Doug Duncan, close to 60% of all outstanding loan balances have around a half-percentage point incentive to refinance.

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Even though we saw a slight decrease in April, home purchases are still going strong. The Mortgage Bankers Association’s (MBA) Weekly Application Survey shows that purchase activity rose 5.3% with an even higher year-over-year the week of May 29.

The ongoing economic and virus challenges didn’t stop housing demand which boasted a rise in home-buying activity compared to last year. A big part of the increase is the record low in mortgage rates. The Primary Mortgage Market Survey’s 30-year fixed-rate mortgage shows a decrease by 5 basis points which keeps the ongoing record low.

The survey shows that home purchase applications have been increasing for five consecutive weeks. In fact, the National Home Builders Association (NAHB) predicts that the housing industry will be a leading sector when it comes to the country’s economic recovery. Fannie Mae reports, “the refinance volume of applications is poised to reach a 17-year high as it forecasts mortgage rates to tumble further.”

The HMI, which indicates builders’ confidence, showed a sturdy gain in May. According to the current National Association of Home Builders/Wells Fargo Housing Market Index (HMI) when it comes to newly-built single-family homes builder confidence rose seven points to 37 last month. The HMI index also showed an increase in sales conditions to 42, a 46 for the component measuring sales expectations in the next six months and 21 for the measure charting traffic of prospective buyers.

Across the regions the HMI scores’ monthly average increased 7 points in the Midwest to 32, in the South, it rose eight points to 42 and in the West a 12 point increase to 44. The only region which saw a decrease was the Northeast which fell 2 points to 17.

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