This week's Real Estate Report highlights to reported trends for the market: record high origination rates and a decline in home purchases.
- Record high origination rates: The dollar amount of mortgages that are predicted to originate in the entire year of 2020 will surpass $4 trillion according to the 45-day lock-to-close period, rate lock data. This is not only the highest amount that the country has ever witnessed but it is also the largest swell of activity since 2005 — a booming year for real estate that had a gloomy future just a few years later. The low interest rates could be the primary cause of this situation. There is also a chance that this purchase activity is a result of the COVID fears within cities that led the the growing remote workforce to move to suburbia.
- A decline in home purchases: We've been covering real estate sales for quite a while and have noticed that home prices have been continually climbing as inventory continually decreases. This inverse relationship may finally be breaking up with a 20.5% gain in pending sales activity month-over-month. Home prices did grow 6.7% in the month of September, so the rally isn't over yet, but this is a signal that home purchases could be nearing their peak. Rates are still low. But homes are selling at a slower pace. Did everyone who was going to buy a home already purchase one? Are home prices too high? It's hard to tell what exactly is going on so we will continue this story as November progresses.