COVID-19: Housing Market Updates

The Pandemic as a Catalyst for Change
COVID-19 has fundamentally reshaped our industry, raising tough questions for the housing market.
What housing trends shape the way we do business? How have home closings and delinquency rates created ripple effects in real estate, lending and insurance?
How will coronavirus impact the global real estate economy?
The novel coronavirus (COVID-19) continues to reshape the way our world is interconnected, from how we conduct business to how we live our lives.
Amidst all the uncertainty, both in the U.S. and around the world, we felt it was more important than ever to be able to share our insights as it relates to the global housing economy. COVID-19: Housing Market Updates will explore topics involving the intersection of the coronavirus pandemic and the economy, housing market and risk.
In the housing analysis tab, economists and risk experts will share insights on the evolving situation. The media coverage tab will feature key interviews and press, and the practical solutions tab seeks to provide creative solutions, accelerating virtual and automated processes across the business landscape, enabling you to continue to support your clients.
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Real Estate
CoreLogic Chief Economist Frank Nothaft and senior leaders of the Real Estate and Rental Property Solutions Groups sat down to discuss impacts on the real estate market.
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Mortgage
CoreLogic Chief Economist Frank Nothaft and senior executives of the Mortgage Solutions Group sat down to discuss the uncertainty and trends in the mortgage industry.
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Insurance
CoreLogic Chief Scientist Howard Botts and senior leadership in the Insurance and Spatial Group discuss how COVID-19 has impacted the insurance industry.
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LATEST ANALYSIS
OCTOBER
NEW: New Listing Growth Softens but Sales Remain Strong in September
Trends in 2020 Listings and Sales Reported in Multiple Listing Services
October 28, 2020 | 6:34 AM ET
Shu Chen, Sr. Professional,
Economist, Office of the Chief Economist
As the COVID-19 pandemic began to take hold in the U.S., CoreLogic Multiple Listing Service (MLS) data[1] showed a sharp slowdown in housing activity, but as of the most recent data available, much of the slowdown in activity is catching up compared to 2019.
Figure 1 shows the year-over-year percent change in the number of new listings in 2020, relative to the same week of the prior year. After the president declared a national emergency on March 13, new listings decreased and reached a trough of 48% below year-ago levels in mid- April. However, as each state gradually reopened, new listings made a strong come back, supported by accumulated demand during the lockdowns and low mortgage rates. For the week ending August 29, new listings reached a 2020 peak of 18% above year-ago levels. Although housing market activity tends to slow down after Labor Day, new listings still showed positive growth in early October compared to a year ago. As of October 10, new listings were 9.4% more than the same week in 2019. The increase in new listings since the summer pushed cumulative activity up close to 2019 levels. By October 10, new listings for all of 2020 were 7.5% below the same period a year ago, up from the trough of 18.3% below 2019 year-to-date activity in mid-May.

Meanwhile, home buyers are back following the new-listings boom. Figure 2 shows the year-over-year percent change in the number of sales (those listings with signed contracts), relative to the same week of the prior year. Sales hit a trough of 36% below year-ago levels in mid-May, but steadily returned in June, and more homes were sold starting from July, compared to 2019. Sales reached a peak of 33% more than the same week one year ago for the week ending September 5, 2020. As of October 10, sales were up 16.4% compared to the level a year ago. Even though sales showed strong increases over the past four months, year-to-date sales through October 10, 2020 were still 4% below the same period a year earlier, an improvement from the trough of 15.3% below 2019 in late June. Meanwhile, listings are selling quickly. Median days-on-market in September 2020 was 46 days, 8 days less than a year ago.

9/5, 9/26 and 9/26 for identical 7-day period in 2019 and 2020)
While the effects of the COVID-19 pandemic aren’t over for the U.S., from the MLS data it appears that the typical spring home buying season became a summer home buying season in 2020 that has continued into fall. Low inventory collided with high buyer demand, which caused home prices to accelerate from 2019. The CoreLogic HPI showed home prices were up 5.9% year over year in August, which is the fastest pace of growth in the index in a little over two years, and further increases in prices expected throughout 2020.
© 2020 CoreLogic, Inc., All rights reserved.
[1] Data are based on 288 Core-based Statistical Areas in the CoreLogic Partner Info Net MLS data.
Mortgage Credit Risk Attributes During the Pandemic for Conventional Conforming Purchase Loans
Read the Full ArticleLower Debt-to-Income and Higher Loan-to-Value Ratios Compared with 2019
October 21, 2020 | 6:22 AM ET
Archana Pradhan, Principal, Economist
Loan application volume, mortgage rates, and lenders underwriting standards have been impacted by the COVID-19 pandemic. For example, the mortgage interest rate is at a record low and purchase loan application trend highlights strong demand for home buying.[1] Lenders may have changed their underwriting standards in response to these trends and economic uncertainty. This blog compares the credit attributes for conventional conforming loans in the second quarter of 2020 to the same quarter of last year.
Average debt-to-income (DTI) ratios for conventional conforming home-purchase loans dropped during the second quarter of 2020 from the same quarter in 2019. In contrast, the average loan-to-value (LTV) ratios during this time rose. Additionally, the average credit score rose. On net, the drop in DTI ratios may reflect the relaxing of affordability pressures for homebuyers in the face of declining mortgage rates in 2020.
The credit-risk attributes of borrowers have shown dramatic variation in the last 20 years. DTI and LTV ratios, along with credit scores, are three important factors in mortgage underwriting. Since 2014, credit-loosening policies by the Government-Sponsored Enterprises (GSEs) have helped boost higher DTI and LTV ratios.[2] Figure 1 shows the share of new conventional conforming home-purchase loans with a DTI ratio above 45% rose sharply after Fannie Mae put its new policy into effect. The share, holding steady between 5% to 7% from early 2012 up to Fannie Mae’s announcement, had reached its peak of 21% in the fourth quarter of 2018 and started dropping in early 2019 and was 13% in second quarter of 2020. The average DTI ratio for conventional conforming home-purchase loans dipped by one point to 35% from the second quarter of 2019 to the second quarter of 2020.
[1] See blog “Mortgage Purchase Applications Higher in July and August Compared with Prior Year”
[2] To expand the credit box to creditworthy borrowers, Fannie Mae began accepting mortgages with LTV ratios up to 97% in December 2014. Freddie Mac began accepting them in March 2015. To further expand access to credit, Fannie Mae raised its DTI ratio level from 45 to 50% in July 2017.
August and September Update: Federal Regulatory Actions Taken
Download PDFOctober 14, 2020 | 5:32AM ET
Russell McIntyre, Sr. Professional, Public Policy & Industry Relations
As summer wound to a close and Americans across the country welcomed the arrival of fall, the pace of activity in our nation’s capital slowed considerably. With Congress in recess for much of the month of August, many administrative branch offices also found themselves short-staffed, with employees using the slowdown as an opportunity to vacation.
While this may be an annual tradition for those making up the Washington, D.C. workforce, the nationwide coronavirus epidemic required some continued action during these typically slower weeks, mostly focused on providing extensions of current programs. The Federal Housing Finance Agency extended its foreclosure and REO eviction moratoriums, in addition to its COVID-related loan processing flexibilities. Fannie Mae and Freddie Mac updated a number of their previously issued Lender Letters and Bulletins, providing additional guidance on originations, appraisals, data standardization, underwriting standards, and much more.
However, this down-time also provided many offices with the opportunity to look back on the past six months and assess the impacts that the coronavirus has already had on our economy. For instance, the Federal Reserve issued a report on the economic well-being of U.S. households, demonstrating that “U.S. families were faring better financially in July than in April, but many still faced uncertainty regarding layoffs and prospects for returning to work.” And the CFPB issued a report examining the early impact of the pandemic on consumer credit, which found that “consumers have not experienced significant increases in delinquency or other negative credit outcomes as reported in credit record data following the onset of the COVID-19 pandemic.”
Entering the final months of 2020, one would expect to see a continuation of this trend, as more departmental agencies begin to publicly release their own internal evaluations of their responses during the first six months of the pandemic. Those evaluations, whether good or bad, will in turn drive the next set of actions moving forward.
Fire on the Horizon
Read the full ArticleOctober 7, 2020 | 5:22 AM PT
Maiclaire Bolton Smith, Senior Leader, Research & Content Strategy
Saumi Shokraee, Professional, Research & Content Strategy
Dr. Thomas Jeffery, Principal, Science & Analytics
The year of 2020 has seen record-setting fires in the west. With the early start of intense wildfire activity this season, it is entirely possible that devastating fires will continue well into the fall. In addition, with the COVID-19 pandemic occurring simultaneously, communities face additional challenges in managing wildfire.
While we may not be able to stop these fires from occurring, we can accelerate our recovery by understanding and managing the risk.
What has happened so far this wildfire season?
SEPTEMBER
NEW: CoreLogic Pending Index Indicates Annual Price Growth Accelerated in August and September
Read Full ArticleSeptember 30 | 8:22AM ET
Bin He, Sr. Leader, Science & Analytics
Frank Nothaft, Chief Economist
The latest CoreLogic® Home Price Index (HPI) for the U.S. recorded an acceleration in annual price growth to 5.5% for July, about two percentage points faster than the prior July – despite much higher unemployment.
The gain reflected rising demand and a supply shortage; Record low mortgage rates fueled homebuyer activity, especially for first-time buyers, and the health risks engendered by the pandemic persuaded many older home sellers to delay their listing to a later, healthier time.
Mortgage Purchase Applications Higher in July and August Compared with Prior Year
Purchase Applications for Millennials Highlight Strong Demand for Buying A Home
September 23, 2020| 6:27 AM ET
Archana Pradhan, Principal, Economist
To observe effects of COVID-19 on mortgage demand, we used CoreLogic Loan Application data through August 29, 2020 and compared the number of applications by week with the same week in 2019. The pandemic may have impacted disparately on decisions to buy homes among potential home buyers. Thus, to observe how COVID-19 may have affected purchases by age cohort, we also compared home-purchase loan applications by age cohort.
At 50%, Millennials represented the largest share of homebuyers in 2020, followed by Generation Xers (31%) and baby boomers (17%), according to CoreLogic loan application data for January through August 29, 2020.[1]

Figure 1 shows home-purchase loan applications picked up after the second week of January 2020. The increase in demand in early 2020 was supported by a robust economy and lower mortgage rate than one year earlier. However, activity started to slow down during February. The activity dropped after the president declared the national emergency on March 13th and local governments’ restrictions on economic activity began. The home-purchase loan application volume was running below the pace of 2019 and reached the trough during the second week of April. However, since mid-April the application volume started to improve. As of the week ending August 29, home-purchase loan applications for 2020 were 22% higher than the same week in 2019.

Figure 2 shows home-purchase loan applications by age cohort measured as the percent change from the same week in 2019. Home-purchase loan applications picked up after the second week of January 2020 for all age cohorts, with the highest surge for millennials. However, activity started to slow during the second week of February and was running below the pace of 2019 for all the age cohorts. Since mid-April the application volume started to improve for all age cohorts. Purchase applications for millennials were running above trend in last year levels. Applications for Gen-Xers and baby boomers were about the same as the last year’s levels though the trends for the silent generation was below last year’s levels.
As government officials warned that the elderly were at greater health risk from the virus, many prospective buyers who were older appear to have delayed their purchase decision in favor of ‘sheltering in place’.[2] As of the week ending August 29, home-purchase loan applications made by the silent generation for 2020 were 12% less than the same week in 2019 compared with an increase of 11% for Baby Boomers, an increase of 20% for Gen-Xers and an increase of 47% for millennial applicants.[3]
We will continue to monitor the performance of the housing market in light of COVID-19 using CoreLogic high-frequency and current high-frequency and current data.
[1] Pew Research Center defines generations born 1981 to 1997 as millennials, 1965 to 1980 as Generation X, 1946 to 1964 as baby boomers, and 1928 to 1945 as the silent generation.
[2] https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/people-at-higher-risk.html .
[3] Applications for the week ending August 29, 2020 were compared with applications for the week ending August 31, 2019.
Ongoing Renter Mobility in Uncertain Times –September 2020 Update
September 16, 2020| 6:39 AM CT
Amy Gromowski, Senior Leader, Science and Analytics
In July, CoreLogic analysis demonstrated that the negative impact of COVID-19 on rental applicant volumes and average rent amount appeared to be short-lived, with the rental market showing signs of recovery by early April. With the country now more than six-months past the Presidential declared national emergency, questions remain around the long-term impact of shelter-in-place and safer-at-home orders. Is the rental market exploding with applicants looking to move or is there a gradual increase in volume as the country climbs out of recession? Have rent amounts decreased and if so, how long will they remain low? Six months after the start of COVID-19 safer-at-home and shelter-in-place orders, CoreLogic renter data examines the impact to renter mobility and rent amount.
Rental Application Volumes
To answer questions on the impact to the renter market, 2019 rental property trends is used as a benchmark. As previously reported, the first 9 weeks of 2020 had the same trend as in 2019, while week 10 saw rental application volumes decrease rapidly due to the beginning of shelter-in-place directives and the Presidential declared national emergency on March 13. However, after only 3 weeks, renter application volumes stabilized then slowly started increasing, though it remained well below 2019 levels for several more weeks.
Starting in week 20 (May 18), 2020 applicant volume reached the same volume as 2019, and has consistently maintained 2019 volumes each week. The market has yet to rebound in a way that makes up for the loss in mobility in March, April and May, as cumulatively renter applicant volume is down 5.8% when comparing 2020 to 2019.

Average Rent Amount
Using 2019 average rent submitted on the application as a benchmark, answers to questions on the impact of COVID-19 on rent amount can be examined. Did rent amounts decrease and if so, how long did they remain low?
The average rent amount started to decline in week 11, one week after the rental volumes started to decline. Average rent amounts typically increase as the weather warms in many parts of the country and renters become more mobile, but with unemployment rising and renter mobility restricted, rent amounts dropped about 4.3% from week 10 to week 15. As shown in Figure 2, after week 15 the average rent amount started to increase and has continued to increase through week 26, reaching 2019 averages. As of week 26, average rent amounts have been within 1% of 2019 amounts.

Conclusion
Rental applicant volumes and average rent amount were significantly impacted when COVID-19 hit and shelter-in-place orders were put in place across the country. In both cases, the decline was short-lived and the rental market bounced back to 2019 levels. However, the market has not yet made up for lost mobility and lowered rent amounts. With most areas of the country reopened (with safety guidance and restrictions), it will be important to continue to watch these trends as well as eviction trends. Given the data lag on reported evictions, it’s too soon to report on the impact of COVID-19, but in time eviction will be important to analyze. However, in the case of average rent amount and renter mobility, if the past few weeks are an indicator of the future, the 2020 rental property market will continue to maintain 2019 levels with the hope of making up for lost mobility in the future.
High-Quality Visuals: A Critical Tool for Real Estate Agents During Pandemic
September 9, 2020| 5:14 AM PT
Saumi Shokraee, Professional, Research & Content Strategy
Though the pandemic initially posed a significant disruption to the in-person interactions critical to the work of real estate agents, the industry has rapidly adapted to accommodate the new circumstances. With virtual home tours and showings, brokers have taken advantage of professional photography, high quality videos, floor plans and 3D imagery to market their properties. With in-person showings few and far between, it is more critical than ever that the images presented to potential clients are of the highest quality possible.
Real estate agents can ensure this by working with a professional photographer with strong experience in real estate photography. An eye for the right angles and window views, a foundation in photo editing and an understanding of MLS rules and regulations can come a long way in making sure these photos are high quality.
As an agent, it is also important to understand your rights to use the photos of your listing. Many photographers require that photographs of the MLS listing be removed after the house has been sold or the listing has expired. Make sure to understand your photo rights before working with any photographer.
By employing all the best marketing practices for their listings, agents can spend less time navigating a fragmented workflow and more time searching for leads and winning listings.
AUGUST
NEW: Data Showing Mixed Views on High-Density and Condo Desirability in the Face of COVID-19
Read the full BlogSeptember 2, 2020| 6:07 AM ET
Selma Hepp, Deputy Chief Economist
Shu Chen, Sr. Professional, Economist
According to a Harris Poll survey conducted at the end of April this year, 39% of urban dwellers said the COVID-19 crisis has prompted them to consider leaving for a less crowded place. In addition, a number of recent news articles[1] bring into question desirability of high-density living.
In the following analysis, we examine recent changes in demand for condominiums as well as any potential impact on prices and inventory. Condominium information is derived from a CoreLogic database containing transactions from more than 150 multiple-listing services (MLSs) across the country.
Condominium settlements take a larger dip but rebound healthily
Though condominium and single-family detached home sales have tracked relatively close over the last few years, sales of condominium units started to accelerate at a faster rate than single-family detached homes in late 2019. In the first 10 weeks of 2020, condominium sales averaged about 8% above last year’s sales while single-family detached sales averaged about 5.5% higher compared to last year. Figure 1 depicts condominium and single-family detached trends beginning in the fourth quarter of 2019 for closed sales and pending contracts.
As we reported in some earlier analyses, sales of homes declined precipitously following the onset of the pandemic with pending contract signings falling immediately following the declaration of the national emergency, and closed sales following 30 to 45 days later, reaching the trough by the end of May.
Nevertheless, the plunge in sales was relatively greater among condominiums, hitting a low year-over-year point at 47% at the end of May. In comparison, while single-family sales declined notably as well, the drop bottomed out at 39% also at the end of May.
After hitting their nadir, both condos and detached home sales picked up pace. And while we’re still seeing lower closed sales in comparison to last year, the slippage is far less.
As pending trends in Figure 1 suggest, home sales activity rebounded for both property types, and started exceeding the rate of pending sales in mid-June compared to last year. The increase is likely to be reflected in closed sales over the next couple of months. Interestingly though, while condominium sales took a larger dip during the peak of shelter-in-place orders, pending contracts have healthily rebounded to the same rate of annual growth as seen for single-family homes, with both averaging about 17% year-over-year increases in the first two weeks of July.

For more on CoreLogic’s perspective on the U.S. housing economy, check out our Insights blog.
Almost a Third of Metropolitan Areas at High Risk of Home Price Declines in Next 12 Months
READ THE FULL BLOGAugust 27, 2020 | 12:26PM ET
Selma Hepp, Deputy Chief Economist
Following the longest period of economic growth in the U.S., the onset of the COVID-19 pandemic led to a decline in economic activity and a resultant recession. According to the National Bureau of Economic Research, February 2020 marked the end of the expansion that began in June 2009 and the beginning of a recession. However, as noted in our recent analysis, the 2020 recession, at four months in, is not following the typical trend of falling home prices but, similar to 2001, is seeing home price growth which is expected to continue through the first quarter of 2021. The latest CoreLogic HPI forecast predicted a 1% drop in HPI by June 2021.
Nevertheless, looking at home price trends nationally can often mask changes occurring in some local markets. For example, as noted in our previous analysis, many places can see home prices fall even when the U.S. HPI is rising. Using annual price change across 954 metropolitan areas, Figure 1 tracks the share of metro areas with price drops going back to 1990 and highlights that there always were places where home prices declined even when the national index rose. Even in 2020, as home prices continued to grow at a solid clip, an increasing share of metropolitan areas have experienced home price declines compared to a year prior - 14% in May, the highest rate since the beginning of 2013.

For more on CoreLogic’s perspective on the U.S. housing economy, check out our Insights blog.
July Update: Federal Regulatory Actions Taken
View Regulatory TrackerAugust 19, 2020 | 5:26AM ET
Russell McIntyre, Sr. Professional,
Public Policy & Industry Relations
From a regulatory standpoint, the month of July got off to a slow start, with Independence Day festivities providing a brief respite from the frequent, often daily announcements that have become the norm in 2020.
However, that does not mean that July was absent of any real action. The Federal Reserve announced an extension of numerous lending facilities and increased liquidity measures. The Federal Housing Finance Agency proposed its 2021 housing goals for Fannie Mae and Freddie Mac, limiting its proposals to calendar year 2021 only due to the economic uncertainty related to the COVID-19 national pandemic. The Internal Revenue Service issued temporary relief for qualified low-income housing projects, and provided safe harbor for residential living facilities.
Providing one of the first retrospective assessments of consumer needs during the coronavirus pandemic, the Consumer Financial Protection Bureau released an updated Complaint Bulletin, “analyzing the more than 8,000 complaints it received from January through May 2020 that mention coronavirus or related terms … The bulletin shows that mortgage (19 percent), credit card (18 percent), and credit or consumer reporting (18 percent) complaints top the list of complaints the Bureau has received that mention coronavirus keywords.”
As the calendar turns toward autumn, the federal government will be faced with a new range of challenges: the re-opening of public schools, the continuation of athletic leagues/programs, and a possible resurgence of the virus as the temperature begins to drop. As these issues, and others, arise, CoreLogic will continue to keep track of any and all federal regulatory actions that could affect our industry.
Spring Buying Season Becomes Summer Buying Season in 2020
August 12, 2020 | 7:32AM ET
Shu Chen, Sr. Professional, Economist, Office of the Chief Economist
Trends in listings and sales reported in Multiple Listing Services
Using CoreLogic Multiple Listing Service (MLS) data from 288 Core-based Statistical Areas we observed a sharp slowdown in home sales activity in March 2020 as the COVID-19 pandemic began to take hold in the U.S. Figure 1 shows year-over-year percent change of the number of new listings, relative to the same week of the prior year. After the president declared national emergency on March 13, new listings decreased and reached a trough of 49% below year-ago levels in mid- April. However, as each state gradually reopens, new listings are coming back, supported by accumulated demand during the lockdowns and low mortgage rates. In July, new listings are back to and above 2019 levels. As of July 25, 2020, new listings were 1% more than the same week one year ago (week ending July 27, 2019).

(week ends 7/4 is for identical 7-day period in 2019 and 2020)
Meanwhile, home buyers are back with offers, after weeks of waiting for new listings. Figure 2 shows the year-over-year percent change of the number of pending sales (those listings with signed contracts), relative to the same week of the prior year. Pending sales hit a trough of 46% below year-ago levels in mid-April, but steadily returned in May, and more listings have received offers since June, compared to 2019. As of July 25, 2020, pending sales are 26% more than the same week one year ago.
While the effects of the COVID-19 pandemic aren’t over for the U.S., from the MLS data it appears that the typical spring home buying season became a summer home buying season in 2020. We will continue to monitor the performance of the housing market in light of COVID-19 using MLS and other data.
(week ends 7/4 is for identical 7-day period in 2019 and 2020)
While the effects of the COVID-19 pandemic aren’t over for the U.S., from the MLS data it appears that the typical spring home buying season became a summer home buying season in 2020. We will continue to monitor the performance of the housing market in light of COVID-19 using MLS and other data.
Private-Label RMBS Credit Risk: An Early Look at the Effect of the Pandemic
August 5, 2020 | 8:12AM ET
Frank E. Nothaft, Chief Economist
Patrick Kiser, Principal, Mortgage Performance Solutions
30-day nonpayment jumped in April, 60-day spiked in May
Many families were caught financially unprepared with the sudden onset of the pandemic in the U.S. earlier this year. The national unemployment rate spiked from a 50-year low of 3.5% in February 2020 to an 80-year high of 14.7% in April. And while the sudden loss of income was partly muted by an income tax refund and enhanced unemployment insurance payments for eligible taxpayers and workers, nonetheless, many homeowners are struggling to stay on top of their mortgage loans, resulting in a jump in non-payment.
JULY
Purchase Applications Stronger for First-time Buyers Than Repeat Buyers Compared with Prior Year
Record-low mortgage rates improve affordability for First-time Buyers
July 29, 2020 | 6:15AM ET
Archana Pradhan, Principal, Economist
COVID-19 has impacted all the sectors of the U.S. economy, including the housing market. It has affected whether and when to buy homes among potential home buyers. Home-purchase demand started strong for both first-time homebuyers and repeat homebuyers in January, supported by mortgage and unemployment rates lower than one year earlier. As the COVID-19 pandemic spread in the U.S. beginning in March, we began to see the impact on the home-purchase decision. To observe how COVID-19 may have affected home purchases by first-time and repeat buyers, we used CoreLogic Loan Application data for January through June 2020 and compared this year’s activity with 2019.[1]

Figure 1 shows year-over-year percent change in the number of home-purchase loan applications by first-time homebuyers and repeat homebuyers relative to the same month of the prior year, using loan applications through June 30, 2020.
Home-purchase loan applications rose in January 2020 compared to the same month of the prior year for both types of homebuyers, with the highest surge for first-time homebuyers. The increase in demand in early 2020 was supported by a robust economy, a mortgage rate nearly one percentage point lower than one year earlier, and a rising desire for first-time homeownership. The rise in first-time buyer purchases helped to raise the homeownership rate in the first quarter to 65.3%, the highest since 2013.[2] However, activity started to slow and was running below the pace of 2019 for repeat homebuyers from mid-February through June, likely related to warnings from health care experts of the greater risk of serious infection for the older population. For the first-time buyer, application volume dropped in April compared to the same month of the prior year—reflecting shelter-in-place orders across many jurisdictions -- but bounced back in May and June as these orders were loosened.
Home-purchase applications submitted by first-time homebuyers jumped 20% in June compared to the same month of the prior year and applications submitted by repeat homebuyers remained below last year levels, but the rate of decline slowed to 8%.
We will continue to monitor the performance of the housing market in light of COVID-19 using CoreLogic high-frequency and current high-frequency and current data.
[1] Only first-lien, owner-occupied home-purchase applications were used for this study from the CoreLogic Loan Application Database.
[2] See Quarterly Residential Vacancies and Homeownership, Census.gov
Renter Mobility in Uncertain Times
July 22, 2020 | 8:42AM CT
Amy Gromowski, Senior Leader, Science and Analytics
In March, as the country began sheltering in place to slow the spread of COVID-19, the rental property market faced uncertainty. With unemployment rates rising faster than any other time in recent history and the inability for rental property owners to evict, the impact to the rental market was unknown. Questions around renter mobility and price sensitivity began to form. When shelter-in-place and safer-at-home orders end, will the rental market explode with applicants looking to move or will there be a gradual increase in volume as the country climbs out of debt? Will rent amounts decrease and if they do, will they remain low and for how long? As we enter mid-July, more than four months after the President declared a national emergency, some states have reopened, some have loosened their safer-at-home and shelter-in-place orders, while others still have orders in place. CoreLogic renter data examines the impact to renter mobility and rent amount.
Rental Application Volumes
To understand the impact of COVID-19, 2019 rental property trends can be used as a benchmark. In 2019 the first seven weeks had a relatively constant rental application volume, with an increase in application volume starting in week 8 (Chart A). As colder climates begin to warm and the end of the school year approaches, people begin to move. In 2020, the first 9 weeks had the same trend as in 2019. However, rental application volumes started decreasing rapidly during the week of Monday, March 9th (week 10). Around this time more jurisdictions were beginning to issue shelter-in-place directives, with the President declaring a national emergency on March 13. The lack of ability to change residence was also impacting new home listings for sale, though renter applications declined at a slightly faster rate. New home listings track the same between 2019 and 2020 in the first 10 weeks, but in week 10 new home listing started decreasing as well.
After the initial drop in renter applicant volume, volumes continued to decline but reached its lowest point in week 12, only three weeks after the national emergency declaration. Starting in week 13 (March 30th), renter application volume stabilized and then slowly started increasing, though it remained well below 2019 levels for several more weeks. Similarly, new home listing data demonstrated the same behavior, but appeared to rebound slightly slower, reaching its lowest volume in week 14.
Starting in week 20 (May 18th), 2020 applicant volume reached the same volume as 2019, with a slight increase over 2019 starting in week 22. Though application volume is currently at or slightly above 2019 levels, the market has not rebounded in a way that makes up for the loss in mobility in March, April and May, as cumulatively renter applicant volume is down 7.1% when comparing 2020 to 2019.

Average Rent Amount
Though rental application volumes started to decline in week 10, the average rent amount started to decline in week 11, one week later. When comparing to 2019, average rent amounts typically increase as the weather warms in many parts of the country and renters become more mobile. But with unemployment rising and renter mobility restricted, rent amounts dropped about 4.3% from week 10 to week 15. As shown in Chart B, the average rent amount started to increase in week 16 and is continuing to increase through week 24; as of week 24, average rent was $1389 per month about 2% less than the same week in 2019.

Conclusion
Rental applicant volumes and average rent amount were significantly impacted when COVID-19 hit and shelter-in-place orders were put in place across the country. In both cases, the decline was short lived, and the rental market started to bounce back by early April. Though the market hasn’t bounced back to make up for lost mobility and lowered rent amounts, it is slowly moving back to expected levels when compared to 2019. With areas of the country in different stages of reopening (whether continued shelter-in-place or reopened at 25%, 50% or 100% capacity), it will be important to continue to watch these trends, as well as eviction trends. Given the data lag on reported evictions, it’s too soon to report on the impact of COVID-19 on evictions, but in time eviction will be important to analyze. However, in the case of average rent amount and renter mobility, if the past few weeks are an indicator of the future, the 2020 rental property market may soon see a return to 2019 levels or higher.
Mortgage Purchase Applications Rebound from April Trough
July 16, 2020 | 8:28AM ET
Archana Pradhan, Principal, Economist
Purchase Applications for Millennials Trending Higher Than Prior Year
The COVID-19 pandemic in the U.S. may have impacted disparately on decisions to buy homes among potential home buyers. To observe how COVID-19 may have affected purchases by age cohort, we used CoreLogic Loan Application data for January through June 13, 2020 and compared this year’s activity with 2019.
Millennials represented the largest share of homebuyers at 50% in 2020, followed by Generation Xers (31%) and baby boomers (17%), according to CoreLogic loan application data for January through June 13, 2020.[1]

Figure 1 shows home-purchase loan applications by age cohort measured as the percent change from the same week in 2019. Home-purchase loan applications picked up after the second week of January 2020 for all age cohorts, with the highest surge for millennials. However, activity started to slow during the second week of February and was running below the pace of 2019 for all the age cohorts. This suggests that housing activity started to contract temporarily before the president declared a national emergency on March 13. The activity dropped continuously after the president declared the national emergency and local government restrictions on economic activity began and reached the trough during the second week of April. However, since mid-April the application volume has started to improve for all age cohorts. Purchase applications for millennials were trending about 10% higher than the last year levels though the trends for the other cohorts were below last year levels.
As government officials warned that the elderly were at greater health risk from the virus, many prospective buyers who were older appear to have delayed their purchase decision in favor of ‘sheltering in place’. [2] As of the week ending June 13, home-purchase loan applications made by the silent generation for 2020 were 24% less than the same week in 2019 compared with a drop of 19% for Baby Boomers and just 15% for Gen-Xers and an increase of 11% for millennial applicants.[3]
We will continue to monitor the performance of the housing market in light of COVID-19 using CoreLogic high-frequency and current high-frequency and current data.
[1] Pew Research Center defines generations born 1981 to 1997 as millennials, 1965 to 1980 as Generation X, 1946 to 1964 as baby boomers, and 1928 to 1945 as the silent generation.
[2] People Who Are at Increased Risk for Severe Illness, June 25, 2020, CDC.gov
[3] Applications for the week ending June 13, 2020 were compared with applications for the week ending June 15, 2019.
June Update: Federal Regulatory Agency Actions Taken
View Regulatory TrackerJune 14, 2020 | 4:04PM ET
Russell McIntyre, Sr. Professional, Public Policy & Industry Relations
The first half of 2020 has come to a close and the spread of coronavirus throughout the country shows no signs of slowing down, with its devastating impact being felt by Americans from coast to coast. Over the past month, the federal government’s actions to address the economic impacts of the pandemic continued to evolve in response to the needs of its citizens. During March and April, the first few months of the outbreak, offices throughout the administration rapidly issued new guidance to counteract the immediate effects of an economic shutdown; in May, these same agencies rushed to update and re-issue this guidance to more accurately address the evolving problems that many Americans were facing (and continue to face) every day.
Now, more than four months into its response, the federal government is going beyond simple reauthorization of its current programs by working to expand their scope and flexibilities. The Federal Reserve has looked to expand its Main Street Lending Program to more small- and medium-sized businesses, along with nonprofits, in addition to opening up its Municipal Liquidity Facility to additional entities. In late June, the Federal Housing Finance Agency (FHFA) announced that both Fannie Mae and Freddie Mac would offer new multifamily forbearance options and tenant protections. And the Consumer Financial Protection Bureau (CFPB) provided additional guidance to servicers on managing the forbearance provisions contained within the CARES Act legislation.
This increase in scope has been driven alongside an increase in specificity, as agencies have now had enough time to administer more targeted actions aimed at specific sectors and processes within the economy. The Federal Housing Administration (FHA) was able to issue temporary quality control requirements; Fannie Mae found the time to address green rewards escrows; Freddie Mac had the capacity to update their eMortgage and Workout Prospector systems; and the Internal Revenue Service (IRS) even got around to providing relief for taxpayers for sport fishing equipment. Many of these actions may be unrelated, or tangentially related at best, to your day-to-day operations, but they exemplify the level of detail that many of these agencies are finally able to address four months into the crisis.
CoreLogic Pending Index Indicates Annual Price Growth Slowed in June and July
Read the Full BlogJuly 9, 2020 | 8:27AM ET
Bin He, Sr. Leader, Science & Analytics
Frank Nothaft, Chief Economist
San Francisco and Detroit may see price growth slow the most since March
The newly released CoreLogic HPI for May shows that home prices held up very well in the United States. However, most of the home prices captured in the May report were from transactions negotiated in April or March since it takes on average 30 to 45 days to settle a transaction. Many states have entered different reopening phases since the beginning of May, and as a result housing market activity has increased. What does that mean for June or even July home prices?
CoreLogic has developed a Pending Price Index™ using MLS data. The index is built on the price recorded on the contract date rather than the price on the closing date. Since it takes generally 30 to 45 days to close a sale, contracts negotiated in May and June can be used to project June and July home prices, which will give insight about the ongoing housing market recovery. The latest CoreLogic Pending Index indicates annual price growth will likely slow in June and July.

The 20-CBSA composite home price year-over-year change is projected to be 4.3% in June, just slightly below what was reported by the CoreLogic HPI for May, 4.4%. Moreover, it is projected to continue to slow down to 4.1% in July (Figure 1).
Sellers’ Flight Likely to Hold Back Housing Recovery
July 7, 2020 | 5:14AM PT
Selma Hepp, Executive, Research & Insights and Deputy Chief Economist
Since the onset of COVID-19 pandemic in the U.S. about 4 months ago, housing markets across the country have gone through some turbulence. One of the first indicators that showed sellers concern was an immediate and notable drop in new listings following declaration of national emergency on March 13th. As Figure 1 suggests, new listings declined by almost 50% by mid-April compared to the same week last year. Since April however, availability of new listings has improved and by mid-June new listings were trending about 13% below last year levels. And while the bounce back from April lows was rather quick, the improvement seems to be levelling off in recent weeks of reported data.

At the same time, buyers responded with similar withdrawal following the March 13th declaration of a national emergency, and new contract signings started declining rapidly - falling by about 45% year-over-year by mid-April. But unlike sellers, buyers have been more consistent in their rally back up and drove new contract signings above last year’s levels by the end of May and to an 18% increase from last year by mid-June. Figure 2 illustrates year-over-year changes in weekly activity for new pending sales and closings. Since closings lag pending sales by 30 to 45 days, the recent rally in pending sales is not yet reflected in closed sales numbers but will be obvious in July and August closed sales counts.

Further, to look at seasonality of home sales activity throughout a year, Figure 3 traces out indexed pending sales over the last three years. Generally, pending sales reach their annual peak around the beginning of May, between weeks 18 and 20. This year, as many parts of the country implemented Shelter-In-Place orders in March and April, the spring home-buying season did not happen. Instead, the recent buyer rally suggests that the spring home-buying season has shifted from the main spring-buying months and into summer. And, if the strong pending trend continues, this year’s summer-buying season may replace what would have been a spring home-buying season. Also, if the strength in the home buying activity continues into summer months, total 2020 home sales may edge close to the total 2019 activity.

Nevertheless, the strength of this year’s home buying season may hinge on availability of homes for sale which continue to lag. Even before the pandemic took the breath away from housing activity in March, availability of homes for sale has been trending about 15% below 2018 and 2019 levels. Since the pandemic began, the difference has been growing. Figure 4 traces out indexed for-sale inventory for the last three years with data indexed to Week 1 in 2018. As noted, for-sale inventory already started off 2020 about 15% below 2018 and 2019 levels, but as spring home-buying months typically bring more inventory on the market, 2020 has instead seen the decline. By mid-June, for-sale inventory was trending almost 30% below last year’s levels.
And while rebound in buyer demand continues to reflect strong housing market fundamentals leading up to COVID-19, lack of inventory may be the Achilles heel for the market going forward. Also, affordability gains obtained from historically lowest mortgage rates may be suppressed if home price growth continues to push higher amid these low inventories.

Sharp Decline in Permit Activity in April Due to Coronavirus
July 2, 2020 | 5:49AM PT
Saumi Shokraee, Professional, Research & Content Strategy
With the coronavirus pandemic resulting in lockdowns all over the world, construction projects have seen significant disruption.
After the pandemic was declared a national emergency in March, there was a significant decline in permit activity in April, down -19% YOY from 118,711 units to 95,951 units. The decline continued during May 2020 with a decrease in YOY permit activity by -16%. This was a significant change after numbers for privately-owned housing units authorized by building permits for January, February, and March maintained strength with YOY changes at 19%, 12%, and 10% respectively.

In some states, construction was not deemed an essential service, halting most activity while others continued at near-normal levels. Because the response to the pandemic was not uniform throughout the nation, the effects on permit activity were not distributed evenly. When looking at permit activity on a state by state basis, we can see that YOY permits for April, the first full month of pandemic, dropped most heavily in New York, Michigan, and Pennsylvania. New York was the highest in decline at a -71% YOY change. These three states were a few of the states where construction was not deemed an essential business and instead was only allowed for projects necessary to protect the health and safety of occupants.

On a regional basis, the Northeast had the highest decline at -52%, while the South had the lowest decline at -8%. The southern region, with less stringent lockdown orders, has seen less of an impact on construction activity as a result of the crisis.

While permit authorizations did decline in April and May, this is no sign for despair. With housing indicators like new pending sales, new listings, and home purchase loan applications continuing to recover, it is likely that demand for construction will continue to improve moving forward.
CoreLogic will continue to monitor permit authorizations and housing starts as the COVID-19 pandemic continues.
Source:
1. https://www.census.gov/construction/bps/statemonthly.html
How will COVID-19 impact U.S. mortgage demand?
March 27, 2020 | 7:24AM ET
Frank Nothaft, Chief Economist
To observe effects of COVID-19 on mortgage demand, we used CoreLogic Loan Application data through March 13, 2020 and compared the recent trend with the 2019 and 2018 trends. The charts show a two-week moving average of the number of home-loan applications, relative to the first two weeks of January for each year (that is, we create an index of application volume, with the first two weeks of January set equal to 100). Data for 2019 and 2018 were similar and were averaged together.
Figure 1 shows home-purchase loan applications and Figure 2 shows refinance applications. Two dates are highlighted on each chart: February 29 recorded the first death in the U.S. from COVID-19 and announcement of travel restrictions to Italy and South Korea; on March 13 President Trump declared a national emergency.[1]
For home-purchase applications, the volume of activity picked up significantly after 2020 began, and during the first two months of the year was 3% above the same period in 2019. Activity slowed during the first two weeks of March and was running below the pace in 2019. Through March 13, purchase applications for 2020 year-to-date totaled about the same as during the same period in 2019.
Refinance applications rose this year as mortgage rates fell. Volume soared as interest rates on fixed-rate loans reached new lows in early March. During the first two weeks of March, applications were about double the level at the beginning of January and were more than four times the volume during the first two weeks of March 2019.
We will continue to monitor the performance of the housing market in light of COVID-19 using high-frequency and current data.
Q&A: Housing Market Performance in Wake of Coronavirus Pandemic
Listen to the Full InterviewMarch 25, 2020 | 9:25AM ET
Maiclaire Bolton Smith, Senior Leader of Research and Content Strategy at CoreLogic sits down with CoreLogic Chief Economist Frank Nothaft to discuss some initial insights into the impact of this global pandemic on the U.S. housing economy.
Maiclaire: My name is Maiclaire Bolton Smith, and I am the senior leader of Research and Content Strategy with CoreLogic. Today I am joined by CoreLogic Chief Economist Dr. Frank Nothaft to discuss some initial insights into the impact of the COVID-19 global pandemic on the U.S. Housing Economy. Dr. Nothaft, things are changing so quickly. I know it’s difficult to say, but are there any early indicators that show a shift in the housing and mortgage market?
Frank: Yes there are. While March month-end data will be more telling, data for the week ending March 20th suggests that home-purchase mortgage applications, availability of homes for sale, and the number of home-purchase contracts signed are all showing weakness due to COVID-19, particularly given that this is typically the ramp up to the spring home-buying season. Rental applications among prospective tenants also appear to have dipped as many households are required to ‘shelter in place’.
Maiclaire: The Federal Reserve has announced aggressive steps to keep interest rates low and pump liquidity into financial markets, and the Congress has taken steps to implement a fiscal stimulus package that targets those workers and industries that have been economically impacted. Can you comment on how this could impact the residential housing market?
Frank: With shelter being one of the top basic needs for human life, the government has opened up its full arsenal of tools to ensure that people remain in their homes and the housing sector remains posed for a bounce back. Also, banks and landlords are increasingly willing to prioritize the welfare of their borrowers and renters to help them weather this storm by providing short-term relief from debt payments.
And while in the short term the housing market will see slowdown in activity, ensuring that people remain in their homes will enable our economy to recover faster once this pandemic is under control. What is critical in this moment is that the response is speedy, robust and well-crafted.
Maiclaire: As a result of COVID-19, how do you see the home sales and rental industries changing?
Frank: Early signs suggest that the pandemic may be a catalyst for widespread shift towards digital interaction, such as virtual open houses and tours, digital appraisals, use of geospatial and artificial intelligence data and technology in ensuring people are able to find, buy and protect their homes.
In the rental space, we may see tenants more likely to renew leases rather than search for a new rental during the next several weeks. Once the U.S. has made it through the pandemic, we may see renters more often opt for larger rental space and single-family over multifamily apartments. For some tenants, this could meet a desire for a home-based office and for greater distance between housing units.
Maiclaire: In the past year we have seen interest rates drop significantly, and this has helped increase mortgage and refinance rates across the country. Do you expect this to continue in this pandemic climate, or is there anything to suggest either interest rates could increase or mortgage and refis could drop?
Frank: The impacts of the pandemic on the economy are evolving very quickly and in ways previously unforeseen. Interest rates will likely follow this unpredictable pattern in the short term. The Federal Reserve’s announcement that it will purchase more than $200 billion in mortgage-backed securities should help stabilize the mortgage market and nudge mortgage rates lower. Our TrueStandings data shows that the median interest rate on home mortgages outstanding is 4%; thus there should be ample opportunities for homeowners to refinance their mortgages if the interest rates remain low.
Maiclaire: And one final question: are there any regional impacts that we could see from the Shelter in Place ordinances showing up in local housing data?
Frank: We do expect to see more notable slowing in housing activity in areas that have been ordered to ‘Shelter in Place’ and where local economies depend on tourism and business conferences. Many agents in these areas have cancelled open houses, and some current owners have delayed listing their homes for sale. Our Housing Analysis tab will provide more insights into the impacts on local housing activity in coming days and weeks.
Maiclaire: Thank you Dr. Nothaft. And thank you for listening—please check back to this site, corelogic.com/covid19 for ongoing insights from CoreLogic on the COVID-19 pandemic and the impact on the U.S. housing economy.
JUNE
The Impact of COVID-19 on the Real Estate Appraisal Industry
June 30, 2020 | 7:09AM CT
Shawn Telford, Senior Leader, Product Management
When COVID-19 triggered shelter-in-place and social distancing orders were implemented nationwide in mid-March, they created an immediate roadblock for lenders as the required inspections that are part of the appraisal process were no longer practicable. With historically low interest rates fueling demand, the GSEs and other secondary market participants quickly responded by permitting temporary appraisal flexibilities allowing exterior only and desktop appraisals in certain cases. To facilitate additional primary market originations, federal regulators issued an interim final rule (IFR) to allow up to a 120-day delay in obtaining the completed appraisal for loans placed in bank portfolios.[1]
Lenders are working with appraisers to use the best option allowed by the loan parameters and considering many other variables affecting the borrower and appraiser. Additionally, the GSEs, HUD and VA allowed appraisers to modify the standard certifications and limiting conditions in the Fannie/Freddie forms such that an appraiser can rely on information from an interested party such as the borrower, real estate agent, builder, and so forth. This change allowed appraisers to rely on data not normally relied upon and to make assumptions regarding the data to form a credible opinion of value.
The temporary appraisal flexibilities are currently set to expire on July 31, and the IFR on December 31, 2020. When used, the flexibilities have been a welcome assist in keeping lending moving. The flexibilities have been an unexpected catalyst regarding appraisal process modernization, allowing for new technology to be used in the appraisal process. The temporary flexibilities have, in fact, provided for a nationwide, all-inclusive appraisal modernization pilot, which will shape the future of the valuation processes. Different valuation options suddenly became accepted—even if only temporarily. Specifically, new technology tools, such as CoreLogic Property Assist, which allow borrowers to collect images, videos and details about their homes using mobile phones and to deliver this data to an appraiser potentially removing the need for an inspection in some cases are being piloted.
Will these changes stick? Many large lenders hope the “genie does not go back in the bottle”. They desire the flexibility in appraisal options, yet some lenders’ risk groups are unwilling to leverage the temporary flexibilities. For perspective our data indicate these flexibilities are used on 8% -10% of appraisals.
Certainly Covid-19 has impacted collateral valuation and will continue to affect the way appraisals and the needed inspections are completed long after the virus fades. Ultimately regulators, investors, and lenders will have to strike the right balance among innovation, modernization, and risk management.
[1] See https://www.federalregister.gov/documents/2020/04/17/2020-08216/real-estate-appraisals
June Update: Federal Regulatory Agency Actions Taken
View Regulatory TrackerJune 14, 2020 | 4:04PM ET
Russell McIntyre, Sr. Professional, Public Policy & Industry Relations
The first half of 2020 has come to a close and the spread of coronavirus throughout the country shows no signs of slowing down, with its devastating impact being felt by Americans from coast to coast. Over the past month, the federal government’s actions to address the economic impacts of the pandemic continued to evolve in response to the needs of its citizens. During March and April, the first few months of the outbreak, offices throughout the administration rapidly issued new guidance to counteract the immediate effects of an economic shutdown; in May, these same agencies rushed to update and re-issue this guidance to more accurately address the evolving problems that many Americans were facing (and continue to face) every day.
Now, more than four months into its response, the federal government is going beyond simple reauthorization of its current programs by working to expand their scope and flexibilities. The Federal Reserve has looked to expand its Main Street Lending Program to more small- and medium-sized businesses, along with nonprofits, in addition to opening up its Municipal Liquidity Facility to additional entities. In late June, the Federal Housing Finance Agency (FHFA) announced that both Fannie Mae and Freddie Mac would offer new multifamily forbearance options and tenant protections. And the Consumer Financial Protection Bureau (CFPB) provided additional guidance to servicers on managing the forbearance provisions contained within the CARES Act legislation.
This increase in scope has been driven alongside an increase in specificity, as agencies have now had enough time to administer more targeted actions aimed at specific sectors and processes within the economy. The Federal Housing Administration (FHA) was able to issue temporary quality control requirements; Fannie Mae found the time to address green rewards escrows; Freddie Mac had the capacity to update their eMortgage and Workout Prospector systems; and the Internal Revenue Service (IRS) even got around to providing relief for taxpayers for sport fishing equipment. Many of these actions may be unrelated, or tangentially related at best, to your day-to-day operations, but they exemplify the level of detail that many of these agencies are finally able to address four months into the crisis.
Rebound in Housing Activity Varies Significantly Across Metro Areas
Smaller metros in the South see sales bounce back while California coastal metros still lag in May
June 25, 2020 | 5:49AM PT
Selma Hepp, Executive, Research & Insights and Deputy Chief Economist
Leading up to the pandemic, the housing market appeared to have been posed for the strongest year since the Great Recession. However, with the onset of the pandemic and a number of Shelter-in-Place (SIP) orders implemented across the country, the housing market took a sharp turn downward - with new contract signings and new for-sale listings dropping by almost 50% by mid-April. Those early April weeks led to many questions on what the housing market will look through the rest of 2020.
Nevertheless, after hitting the trough in mid-April, housing market activity has started to rebound. By the end of May, new contract signings, a leading indicator to future closed sales, were actually higher - up about 8% - compared to the same week last year, while the new listings were down only 16% compared to last year.
But, while the pickup in housing activity appears strong and possibly not expected this early following the crisis, housing activity differs widely across metropolitan areas and is in part driven by the severity of the pandemic as well as stringency of SIP orders in local areas. The analysis below uses the data from the multiple-listing services (MLSs) to evaluate housing markets across 35 metropolitan areas prior to COVID-19 through the first week of June. The metro areas represent both large metro regions as well as smaller metros across the country.
Figure 1 summarizes some relevant market indicators across the metro areas. The first column summarizes the change in home sales in the first twelve weeks of 2020 compared to last year and prior to the declaration of the national emergency on March 13th. Strong start in home sales was particularly evident in Las Vegas, San Diego, Cleveland and Columbus, Philadelphia, Phoenix and a number of Texas markets. On the other hand, markets showing some weakness compared to last year included largely Seattle, San Jose and Washington DC. Also, the trends prior to COVID-10 do suggest stronger activity in relatively more affordable parts of the country while less affordable cities on the west coast have lost some of the momentum seen in 2019 sales activity.
The second column in Figure 1 summarizes year-over-year change in pending sales contracts signed over the 30 days ending on June 7th. Since pending contracts are a leading indicator, they are suggestive of what the total sales will look like 30 to 45 days following the contract signing. The change in pending contracts compared to last year varies notably across the metro areas suggested by a stark difference in the numbers shaded in green, indicating an increase, compared to those in red which indicate an annual decline.
The metros that have seen the biggest annual boost continue to be those that already had a strong demand prior to COVID-19, namely markets in Texas – Houston, Dallas, and Austin, Ohio’s Cleveland, Columbus, and Cincinnati, but also Jacksonville, Virginia Beach, and Kansas City. In contrast, some of the larger metropolitan areas, particularly on the California coast remain at half of the activity seen last year, though Northeast cities such as Washington, Baltimore, Philadelphia, Providence, and New York are also slow to see a rebound in housing activity. The three areas that stand out with the largest declines in new contracts signed are Milwaukee, San Jose, and Los Angeles. While the increase in housing activity appears to be correlated with expiration of SIP orders, increased activity in Ohio, for example, occurred seemingly before the SIP expiration on May 29th and is a continuation of strong trends seen prior to the pandemic. Interestingly too, more affordable Sacramento in California is seeing relatively stronger activity compared to the other California metros but also relative to where it started in 2020. Similar trend is seen in Austin, Jacksonville, and Kansas City which started the year relatively flat, but are showing encouraging trends in recent weeks.
Further, to understand where the home buyers and home sellers struck a balance amid these difficult times, Figure 2 traces the average share of homes that sold below the asking price across the 35 metro areas in the first five months of 2019 and 2020. First, note that the general decline from January to May is seasonal as we see more discounts during the winter months than during the summer. But, while 2020 started off with fewer homes selling at a discount, 70% in 2020 versus 73% seen in 2019, by the end of April, the 2020 share starts picking up again to reach almost the same rate seen in 2019, little less than 60%. Thus, buyers who closed on their homes after the onset of COVID-19 seemed to have been able to negotiate more discounts than those who closed prior. Nevertheless, sellers’ willingness to negotiate seems to have leveled off in May suggested by flattening of the 2020 line.
Figure 3 further breaks the data by the 35 metro areas and summarizes year-over year change in the share of homes sold below the asking price in the weeks prior to COVID-19, and in May, and compares the differences between the two. Specifically, Column A indicates the year-over-year difference in the share of price discounts between January and mid-March and a negative number suggests that there were fewer discounts at the beginning of 2020 compared to the same period in 2019. Column B indicates the year-over-year difference in discounts for the 4 weeks ending June 6th, 2020. The last column is a difference between columns A and B (note there may be rounding errors).
For example, in Seattle, the share of homes sold with a discount prior to COVID-19 was 17 percentage points lower in 2020 than in 2019. In contrast, in May 2020, there were no difference between the share of discounts compared to last year. Thus, the 17 percent point difference noted in the last column suggests a notable increase in share of discounts in May compared to that seen at the beginning of the year. Put another way, green shades in the last column suggest more discounts in post COVID-19 housing market than seen prior to the crisis.
The other metro areas seeing an important decline in price discounts are Sacramento with 13 percentage point spread, Milwaukee, San Diego, and a few others. On the other hand, buyers in Las Vegas, Atlanta, and Charlotte may be seeing an uptick in discounts in recent weeks.
Taken together, the onset of the pandemic is still relatively recent, and the lasting impacts will only be obvious as time passes and more data is available. But early data suggests that some regions have fared better than others and the trends seen prior to the crisis are continuing to drive their local markets.
Q&A: How Is Fraud Affected by the Pandemic?
Listen to the PodcastJune 23, 2020 | 5:15AM PT
Maiclaire Bolton Smith, Senior Leader of Research and Content Strategy at CoreLogic, sits down with Bridget Berg, Principal, Industry Solutions at CoreLogic to discuss fraud impacts from COVID-19.
Maiclaire: Welcome back to our CoreLogic podcast series looking at the impact of COVID-19 on the U.S. housing economy. My name is Maiclaire Bolton Smith, and I am the Senior Leader of Research and Content Strategy with CoreLogic. Today, I’m joined by Bridget Berg, Principal, Industry Solutions to discuss fraud impacts posed by the COVID-19 global pandemic. Bridget, thank you for joining me today.
Bridget: Thanks for this opportunity, Maiclaire.
Maiclaire: So to start off with today, Bridget, what is the biggest challenge related to COVID-19 and fraud risk that lenders are encountering right now?
Bridget: With record unemployment levels, not to mention the speed with which we reached those levels, lenders are really concerned about borrowers losing their incomes and hiding it so they can still close on their homes. For a borrower, especially one who is refinancing for a lower payment, it is tough to lose your job and then find out that it keeps you from the refinance that was going to decrease your expenses.
Maiclaire: I see how that could be a real problem for lenders. What are they doing about it?
Bridget: Originators are verifying employment as close to closing as possible, even day of closing. It can be difficult to make sure you are speaking to the right person, because HR departments may have been disrupted depending on the size of the business.
Some sources that are heavily relied on for automated pre-close income validation use periodic data feeds from employers. They are not real-time. In normal circumstances, the delays are not usually an issue, but because there are so many job impacts happening so quickly right now, it really increases the chances a borrower could lose their job during that delay period. This means that in addition to the regular number of manual income validations, those that were using automated services have been added to the queue for pre-closing income validation phone calls.
Maiclaire: Are lenders experiencing similar issues as they verify a borrower’s self-employment?
Bridget: Well yes. Disruptions in IRS 4506-T services as well as the age of tax information creates a different problem for lenders as they try to confirm that self-employed borrowers’ businesses are still operating and have a steady income. Many are looking at bank statements to track consistent activity, but there is no perfect solution right now.
Most lenders are asking the borrowers to sign additional certifications regarding their income status. Although signing the loan application certifies the information on it is correct, having a separate form to spell out the fine print is a good idea.
Maiclaire: You’ve touched on challenges with income verification prior to loan closing. What happens if the borrower loses their job after closing?
Bridget: That really depends on the contracts between the loan originator and the investor. There is also a risk for originating lenders that the borrower may ask for forbearance before the loan is sold to the end investor. If this happens, the loan is likely to be assessed a price adjustment of up to 7% of the loan amount, or may not be accepted for purchase, depending on the investor. This creates an urgency to get loans sold quickly to reduce the holding time and the risk of an unsalable or discounted loan. The longer loans take to move through the system, the higher the chance one or more of them has a forbearance request.
Making sure loans have clean documentation is more important than ever to minimize delays in selling the loan. Forbearance requests are not a direct loan-fraud issue, but they raise a lot of questions in gray areas. Lenders are required to disclose forbearance requests, but there may be some question as to what is really considered a forbearance request. There are huge stakes for lenders holding unsold loans when it comes to the forbearance requests.
Maiclaire: It sounds like income verification and speedy sale to the investor is very important for lenders managing fraud risk right now. What else is coming down the pipe?
Bridget: Appraisal flexibility is something lenders should be watching closely. With appraisal flexibility, there are temporary alternatives offered by agencies that allow for an appraisal without a physical inspection by the appraiser, especially for the home interior. Because the initial flexibility was for a short timeframe, misuse of the guideline was unlikely. However, it has been extended through June and may be extended beyond that, or perhaps used again in the future. It may be more likely to be used as a tool to facilitate fraud if and when it matures.
We will also be closely watching home prices and signs of market stress, such as delinquencies and foreclosures, especially in areas hardest hit by unemployment. Distressed areas are targets for fraud schemes, such as illegal property flips, fraudulent short sales, and foreclosure rescue schemes. Many of these schemes use straw buyers. Our quarterly fraud briefs will report on any signs of these activities. The next fraud brief will be released in July, analyzing activity for Q2 2020.
Maiclaire: Thank you, Bridget and thank you for listening. Please check back to this site – corelogic.com/covid19 for ongoing insights from CoreLogic on the COVID-19 pandemic and its impact on the U.S. housing economy.
Non-weather Water Risk and COVID-19
Read The Full BlogJune 19, 2020 | 8:27AM ET
Saumi Shokraee, Professional, Research & Content Strategy
Fears about the coronavirus pandemic have prompted public officials to order quarantines and stay-at-home orders across the nation. A Gallup poll on April 3rd indicated that 75% of Americans have self-isolated in their household.1 This means that all of those hours previously spent at the workplace are now being spent at home.
How much extra time is that? Data from the Bureau of Labor Statistics gathered in July 2019 found that the average full-time employed person worked 8.5 hours on the weekdays that they worked.2 Moreover, Census data from 2018 indicates that the majority of the nation worked primarily outside the home, with only 4.9% of the nation working entirely from home before the start of the coronavirus pandemic.3
Consequently, with stay-at-home orders in place, many people are spending an additional 8.5 hours in their homes each day, often with additional occupants, including college students and extended family, living under one roof. As a result, water heaters, washing machines, bathroom facilities, dishwashers, plumbing, sinks, and faucets are taking on significantly more use and wear.
Sources:
[1] https://news.gallup.com/poll/307760/three-four-self-isolated-household.aspx?utm_source=alert&utm_medium=email&utm_content=morelink&utm_campaign=syndication
[2] https://www.bls.gov/news.release/atus.nr0.htm
[3] https://www.census.gov/programs-surveys/acs/news/data-releases/2018/release.html
COVID-19 May Have Changed Home Buying Patterns Permanently
June 17, 2020 | 6:25AM MT
Amy Gorce, Principal, Business Development
Home buying has always been driven by principles of affordability, location, and love. During this COVID-19 pandemic, property search remains consistent. That’s a digital exercise and hasn’t been affected. Home buyers continue to focus on a city or polygon region of an area where they want to live, put in their price range, then consume photos (and videos) of potential candidates to select. This fundamental behavior, the very start of the buying funnel, hasn’t changed. But so much more beyond online search…has.
Almost everything “offline” in the real estate world has been forced to adapt to strict social distancing rules that mitigate the fears of homeowners worried about strangers in their home. Home inventory has been slim for years in normal times – this worry has caused inventory to plunge even further - keeping unit transaction volumes stunningly low for Spring and creating an odd price parity for an almost equal shrinkage of consumer demand for homes as they struggle with the trifecta of job loss, stricter access to (jumbo) mortgage credit, and low consumer confidence. While stock markets are, at the moment, in a surprising rebound – it’s unclear how this might stimulate consumer demand for homes as inventory shrinks.
In many states, real estate workers were considered an essential service. The challenge to our industry was to enable home buying in the safest possible way. A process of a live digital home viewing was inspired. If you have used Apple’s FaceTime feature on your phone, Skype, WhatsApp, etc., you have become familiar with the use of mobile technology that allows a real estate agent, or sometimes a home seller, to provide a live walk through of a property.
Real estate technology companies have responded by adding new data fields that allow real estate agents to indicate if a live showing request is acceptable, and real estate websites - like Redfin and thousands of others - have added a new feature to their consumer search results that allow a consumer to request a live-stream showing. Typically, a real estate agent now makes an appointment with the seller for the live showing and walks through the home (masked & gloved) answering questions in real time for home buyers. This process is successful at allowing home buyers to gather enough information to make offers on homes they love with some new contingencies protecting the offer pending in-person sign-off.
The developments of these new showing paths were not without some confusion on terms that include differentiation between 3D tour, virtual tour, ED Virtual tour, virtual walkthrough. The industry has not agreed on what to call these various iterations and their meanings remain in flux. The coming months will help define and standardize this terminology.
Another key change is stronger adoption of the digital transaction. Transaction management solutions have been available for decades to organize all of the people (and tasks) related to a closing. COVID-19 inspired laggards to adopt these digital solutions out of necessity and there is a strong likelihood that many professionals will stay on the digital track. There remain issues with wet signatures (notary) at various stages in a handful of states. But many legislatures have drafted correcting courses which may soon find their way into law. Security, encryption, and validation has come a long way toward reducing identity fraud.
What we can conclude today is, for the first time, the real estate industry is forced to rethink the in-person showings and open houses that have been the mainstay behavior of home buying for more than 100 years. Now, agents representing home buyers do not need to drive around opening dozens of doors all day long. Home sellers have fewer casual shoppers traipsing through their home. New options are available that may disrupt historic patterns of the home buying process. Fully digital transactions are happening in America and there is a likelihood that COVID-19 may provide a lasting impact on the future of homebuying. While the pandemic has been shocking and (short-term) devastating – the long-term structural changes it forces may drive significant improvement for our industry as a whole.
May Update: Federal Regulatory Agency Actions Taken
VIEW REGULATORY TRACKERJune 15, 2020 | 8:13AM ET
Russell McIntyre, Sr. Professional, Public Policy & Industry Relations
Almost three months into the global COVID-19 pandemic, offices throughout the federal government continue working to address economic and social ramifications. These response mechanisms have continued to evolve over time as our institutions work to keep pace with new challenges as they arise. While many agencies used March and April as a time period to issue new guidance to counteract the immediate effects of an economic shutdown, they used the month of May to update and re-issue their notices, bulletins, and other statements to more accurately address the problems that many Americans are facing.
This includes many of the agencies that regulate the housing and mortgage industries, from the Federal Housing Administration to the Consumer Financial Protection Bureau to Fannie Mae and Freddie Mac, among many others. This past month saw a government-wide extension of the foreclosure and eviction moratoria first enacted in March, a continued increase in flexibility for loan processing capabilities, and a shifting focus to larger liquidity issues affecting our nation at the macroeconomic level.
Finally, as households across the country continue to struggle to make monthly rent and mortgage payments, federal institutions have turned their attention to forbearance programs in an effort to ensure Americans are able to remain in their homes. Forbearance and repayment issues are sure to remain a focus of numerous agencies over the coming months as we enter what is (hopefully) the backend of this pandemic.
CoreLogic has continued to keep track of the daily updates coming from these federal agencies and bodies over the month of May. While this document does not claim to cover every action issued by every office within the executive branch, it does capture those that are of utmost importance to CoreLogic and others throughout the housing and mortgage industries.
Housing Market Update
Watch the UpdateJune 12, 2020 | 7:45 AM ET
Frank Nothaft,Executive, Chief Economist, Office of the Chief Economist
Join CoreLogic Chief Economic Frank Nothaft in this economic update as he discusses key stats about the ups, downs and changes in the marketplace across the United States for the spring and summer homebuying season.
Topics to be featured include new listings, signings & closings, loan applications and applications by age cohort.
Weekly Home-Purchase Applications for Jumbo Loans Rise
June 10, 2020 | 8:01AM ET
Archana Pradhan, Principal, Economist
Refinance Applications are up for both jumbo and non-jumbo loans
Demand for both home-purchase and refinance jumbo loans started very strong in the beginning of 2020. However, with the spread of COVID-19, applications for jumbo mortgage loans started to decline rapidly. To observe the effects of COVID-19 on jumbo mortgage demand, we used CoreLogic Loan Application data through May 9th, 2020 and compared the number of applications by week with the same week in 2019. We used Federal Housing Finance Agency (FHFA) conforming loan limits to identify the jumbo loans.[1] Loans above the FHFA limit were flagged as jumbo loans and below or equal to the limit as non-jumbo loans.
Figure 1 shows that home-purchase loan applications for jumbo loans picked up more than non-jumbo loans in early January 2020, supported by a robust economy and lower mortgage rate than one year earlier. However, activity started to slow during the second week of February and by mid-March was running below the pace of 2019 and below non-jumbo loans as well. Figure 1 also notes March 13th, the date the President announced a national emergency.
Home-purchase loan applications reached a trough at the week ending April 11th and then started to recover. As of the week ending May 9th, home-purchase loan applications rose 22% for the jumbo loans compared to the same week in 2019. As states are reopening, homebuyers have started to come out. Record low mortgage rates layered with pent-up demand has helped the application volume rise. However, for the non-jumbo loans the volume is still below the same week in 2019.
For the entire month of April, total home-purchase applications for jumbo loans were 28% below the prior April compared with 24% drop for non-jumbo loans.
Similarly, refinance applications for both jumbo loans and non-jumbo loans spiked this year as mortgage rates dropped. The volume reached a peak in the first week of March as interest rates on 30-year fixed-rate reached a record low. Refinance applications dropped as the mortgage rate rebounded about 30 basis points within two weeks of hitting its low, but applications were still higher than a year ago. Refi applications for jumbo loans dropped more than the non-jumbo loan applications before it started to bounce back. As of the week ending May 9th, refi loan applications were up for both jumbo loans (by 177%) and non-jumbo loans (by 234%) compared to the same week in 2019.
As the pandemic recession worsened, credit underwriting appears to have tightened for both jumbo and non-jumbo refinance loans compared to the prior year. Table 1 shows year-over-year change in average credit risk attributes of refinance loan applications, and the changes are consistent with a tightening in underwriting. The average credit scores rose by 32 points and 10 points, respectively, for non-jumbo loans (to 756) and jumbo loans (to 775) from April 2019 to April 2020. Similarly, averages for LTV ratios and debt-to-income ratios have dropped for both jumbo and non-jumbo refinance loans from April 2019 to April 2020.
Due to the current uncertain economic conditions, lenders might be tightening the credit underwriting of mortgages at a time when borrowers also want to take advantage of a record-low mortgage interest rate. As per CoreLogic loan application data for April 2020, the average interest rate dropped about one percentage point for both jumbo and non-jumbo refinance loans from one-year ago. For the entire month of April, total refinance applications were up by 44% and 234%, respectively, for jumbo loans and non-jumbo loans compared with the prior April.
[1] https://www.fhfa.gov/DataTools/Downloads/Pages/Conforming-Loan-Limits.aspx
COVID-19’s Impacts on the Rental Market: Questions Answered
June 8, 2020 | 5:29AM PT
Saumi Shokraee, Professional, Research & Content
As the COVID-19 pandemic continues to impact the real estate economy, renters and landlords are concerned about how the disruption is going to affect their ability to make their payments on time. Over April 20-22, CoreLogic hosted a series of 3 webinars as part of the Strategic Agility in Uncertain Times series providing insight on COVID-19’s impact on the real estate, mortgage, and insurance ecosystems. In the first webinar, we dug deep into some of the effects of COVID-19 on the rental market and received a few questions. We have taken the time to provide further context here:
Tracking Rent Payment Amid COVID-19
With concerns of coronavirus deep in the national psyche, data indicates that tenants are hesitant to look for new properties, whether it be for purchase or for rent. Current tenants are either extending their leases by switching to month-to-month or by signing new leases.
The National Multifamily Housing Council collected data from 11.5 million apartment units on whether tenants made a full or partial rent payment in their rent payment tracker.[1]
Category | Rent Payments Made by 5th of Month | Rent Payments Made by 12th of Month | Rent Payments Made by 19th of Month | Rent Payments Made by 26th of Month |
---|---|---|---|---|
April 2020 % of prior month | 85.2% | 92.5% | 95.2% | 96.7% |
April 2020 | 69.2% | 83.8% | 88.7% | 91.5% |
March 2020 | 81.2% | 90.6% | 93.2% | 94.6% |
April 2019 | 82.1% | 89.9% | 93.0% | 95.6% |
While the economy is experiencing record job losses and business disruption, rent payments are surprisingly holding up quite well. By the fourth week of April, 91.5% of tenants were still able to make their rent payment. The latest numbers from this April indicate that the payment rate made by the 26th of the month was 96.7% compared to the same time last month.
SafeRent Score Trends and Credit Reporting
As the industry's only statistically validated scoring model, the SafeRent Score helps landlords predict the propensity of a potential renter to make their payment. This score is available to CoreLogic clients but does not show up on a credit report from one of the three credit bureaus.
With SafeRent Score data dating back to the 2007 recession, we can look at how high levels of unemployment affected the ability of renters to make their payments on time. Data indicates that SafeRent scores started to decline in 2007 and stabilized in 2010. After 2010, the unemployment rate came back down and the SafeRent scores rose concurrently. This confirms our expectation that higher rates of unemployment mean more renters are unlikely to be able to make their rent payments.
As the COVID-19 pandemic wreaks havoc on the economy, landlords and renters alike are wondering how they are going to make their payments on time. Using this data can help landlords anticipate disruptions to their rent payments and mitigate risk. For more information on how SafeRent Scores allow us to dig into historical rent payment trends, check out our June 1 COVID-19: Housing Market Updates post on Renter Application Risk in Uncertain Times.
[1] https://www.nmhc.org/research-insight/nmhc-rent-payment-tracker/
What will happen as COVID-19 and hurricane season collide?
Read the Full BlogJune 05, 2020 | 7:03 AM CT
Elizabeth Greeves and Rhea Turakhia, Professionals, Marketing
Atlantic hurricane season officially begins on June 1. As COVID-19 sweeps the globe, creating disruption for businesses and homeowners everywhere, the risk hurricanes and associated storm surge pose remains strong with nearly 7.4 million homes in America at risk. CoreLogic® identified the top 15 metros at risk of storm surge, including single- and multifamily residences, accounting for 68.8% of total reconstruction cost value of homes at risk of storm surge on the Gulf and Atlantic coasts in the United States.
Mortgage Default Rate Could Be Significantly Higher Due to Covid-19
June 3, 2020 | 8:31AM ET
Bin He, Sr. Leader, Science & Analytics
Michelle Wu, Principal, Science & Analytics
Jay Liu, Principal, Science & Analytics
The disruption of Covid-19 on the U.S. economy, particularly on jobs and the housing market, could lead to significantly higher mortgage default in the next several years based on Covid-19 scenario analysis and prediction of the CoreLogic® RiskModel.
CoreLogic RiskModel is the CoreLogic propriety mortgage credit risk tool that analyzes mortgage prepay and default using state transition models and Monte Carlo simulation, based on loan characteristics, past payment history, as well as macroeconomic conditions.
Three hypothetical Covid-19 macroeconomic scenarios were studied: baseline, adverse and severely adverse scenarios. For each scenario, macroeconomic inputs, including the CoreLogic Home Price Index (HPI), unemployment rate and interest rates, were generated and fed into the model. Figure 1 shows the HPI under the three scenarios: CoreLogic HPI Forecast released May 5, 2020 (Baseline), one standard deviation worse case peak-to-trough decline (Adverse) and two standard deviation peak-to-trough decline (Severe). The unemployment rate was assumed to peak at the end of 2020 Q2 (15.2% Baseline, 18.2% Adverse, 22.2% Severe) and then revert to the CBO natural rate (4.2%) in the long run. The 30-year mortgage rate was assumed to bottom (2.54% in Q3 2020) at the third quarter of 2020 then gradually go up due to the recovery of bond yields.

Figure 2 and Figure 3 show the conditional default rate (CDR) and cumulative default rate prediction form the RiskModel Agency Model for conventional conforming loans originated during 2013-2016.[1] The CDR peaks in 2022Q2 at 4 times higher than the April 2020 level under the baseline scenario, and 10 times higher under the severely adverse scenario.
Figure 4 and Figure 5 show the conditional prepayment rate (CPR) and cumulative prepayment rate prediction. The model predicts a brief increase in prepay during 2020Q2, likely due to borrowers taking advantage of the lower interest rates, then a sharp drop for the rest of 2020 due to job losses across the U.S.. The CPR remains at a lower level afterwards.
The CARES Act provides mortgage forbearance to borrowers with a federally backed mortgage impacted by the coronavirus. The MBA has reported there’s almost 4 million mortgages are in forbearance at the beginning of May. The effectiveness of programs like this could have significant impact on the final outcome of the delinquent loans. However, even if the CARES Act mortgage forbearance program take-up rate is high, many borrowers may still be in financial distress after the forbearance period. They may be candidates for a loan modification.[2] However, it’s unclear how many of these consumers will qualify or may lose their homes due to a slow economic recovery.[3]
[1] Default is defined as short sale or REO liquidation. CPR or CDR is the annualized percentage of loans at the beginning of the months that are expected to enter prepayment or default in a year. The cumulative rate is the cumulative number of prepayments or defaults divided by the total number of loans in the pool.
[2] CoreLogic IntelliMods automates loan modification decisioning with limited manual intervention.
[3] Congress is debating the extent to which various financial assistance programs are going to be further extended or even increased. This open question is important to the extent to which consumers have enough of a financial runway to recover prior to the expiration of such programs.
Renter Application Risk in Uncertain Times
June 1, 2020 | 7:02AM CT
Amy Gromowski, Sr. Leader, Analytics
Willa Wei, Principal, Science & Analytics
Over the past several years a growing U.S. economy gave way to a strong rental market, with property owners receiving more rental applications from low risk applicants. That is prospective tenants who were more likely to be able to meet their monthly rent payments on time. These low risk applicants had higher incomes, lower rent-to-income ratios, and better credit histories.
But as the country stays at home to slow the spread of COVID-19, the rental market is experiencing a significant slow-down and a potential reversal of the gains made in the past several years. With unemployment rising faster than any other time in recent history and the inability for rental property owners to evict, what will be the impact to the rental market?
Rental Application Volumes
Using 2019 as a benchmark to understand 2020, the first seven weeks of 2019 had a relatively constant rental application volume, with an increase in application volume starting in week 8 (Figure 1). As colder climates begin to warm, people begin to move. In 2020, the first 9 weeks had the same trend as in 2019. However, somewhere around March 9 (week 10), rental application volumes start decreasing rapidly. Around this time more jurisdictions were beginning to issue “shelter in place” directives, and the President declared a pandemic national emergency on March 13. Similarly, the lack of ability to change residence was impacting new home listings for sale. New home listings track the same between 2019 and 2020 in the first 10 weeks, but in week 11 new home listing volumes drops significantly.
Figure 1: Application Volume Index by Week Rental vs. New Home Listings

Rental Lease Default Risk
Though rental applications are trending back up, they are still lower compared to 2019. With fewer people applying for rental housing during this uncertain time, what will happen when people are able to go back to their daily routines? Will the rental market explode with applicants looking to move or will there be a gradual increase in volume as the country climbs out of debt? Perhaps unemployment and rental default risk will help answer the question. The CoreLogic SafeRent Score is a rental screening tool that assigns a score of 200-800 for each potential renter. The lower the score, the higher the probability that the renter will default in the future. Looking back at the market crash of 2008 and the years that followed, the impact to unemployment and renter default risk is highly correlated.
As unemployment reaches staggering numbers every week since “safer at home” began in many states, renter applicant risk will likely increase significantly in the coming weeks. With the moratorium on evictions, there will be fewer evictions for 120-150 days (from March 27). What will happen to the application volume when that time period is over? And what will it mean for the ability of new applicants to successfully make their monthly rent payments on time?
Figure 2: Average SafeRent Score with Unemployment Rate
As shown in the Figure 2, after 2007/2008 crisis, the unemployment rate continued to rise until a peak in 2010. Renter applicant risk started to decline at the beginning of 2007/2008 and hit a trough in 2010. After 2010, the unemployment rate came back down while the renter applicant risk rose concurrently. There is very strong inverse correlation between these two variables, and both were severely impacted by the economic downturn.
Another factor to consider is property class. Property classes are determined by the quality of the property and amenities provided to residents. There are four categories in property class: A, B, C, and D. Class A indicates the rental property is a high-end property and D indicates a low-end property.
Figure 3: Average SafeRent Score by Class With Unemployment Rate
As shown in the Figure 3, as rental property class moves from high-end to low-end, the renter applicant risk becomes riskier, as shown with the scale for each class adjusting down. In both mid-class properties (Class B and C), there is clear downward trend in 2009 and 2010, with significant increase in renter applicant risk as the market recovered after the crash. For the highest-end class (Class A) risk did not trend downward in year 2009 and 2010 to the same degree. This indicates that the financial crisis didn’t impact the applicants' rent payment likelihood for those applying to the highest-end properties, as it did for other rentals.
A third observation from the Great Recession is that rental markets and the financial wellbeing of prospective tenants varies considerably by local area. Metropolitan areas that are more severely affected by the economic recession will also have larger effects on their population and housing market.
Figure 4 illustrates how the average SafeRent score and average rent were affected by metro area. On the left are Las Vegas, Nevada, and Orlando, Florida rental properties. These areas are hot spots for tourism and service industries. When the 2007/2008 financial crisis hit, home prices collapsed and unemployment and foreclosure rates skyrocketed. Mortgage and consumer debt default significantly reduced credit worthiness metrics and unemployment reduced income for many residents, two factors that negatively affect SafeRent scores. Foreclosures added thousands of homes to the rental stock in both metro areas at a time when rental vacancy rates were rising. As shown in Figure 4, the renter payment likelihood and rent amount were strongly correlated and both decreased dramatically in 2008-2010. On the right-hand side are New York and Washington DC. In these areas the local economies are more diversified, and while home prices fell and foreclosures rose substantially, these changes were far less than in Las Vegas and Orlando.
Figure 4: Average SafeRent Score with Rent Amount
From these analyses, it’s clear economic factors contribute to renter applicant risk and rent amount, as evidenced in the wake of the 2008 financial crisis. The risk level of renters across the industry increased with a concurrent drop in rental amount in tourism and service areas. But whether we will witness the same pattern after COVID-19 will depend on how soon the country will reopen and how fast the stimulus bills help with economic recovery.
CoreLogic Experts on COVID-19, Home Prices, Best Markets
Listen to the PodcastWith the 2008 housing crash still fresh on our minds, some people think the same thing will happen today. But so far, the housing news isn’t all bad. In this podcast with Real Wealth Network, learn about:
- Home prices and will they stay in the positive
- Rental insights from property managers
- Impact COVID-19 will have on certain markets
We’ll look at the data and see what it tells us. Amy Gromowski is a Senior Leader with the CoreLogic Science & Analytics Center of Excellence. Jeremy Thomason is the Executive Sales Leader for CoreLogic Rental Property Solutions.
MAY
CoreLogic Experts on COVID-19, Home Prices, Best Markets
Listen to the PodcastWith the 2008 housing crash still fresh on our minds, some people think the same thing will happen today. But so far, the housing news isn’t all bad. In this podcast with Real Wealth Network, learn about:
- Home prices and will they stay in the positive
- Rental insights from property managers
- Impact COVID-19 will have on certain markets
We’ll look at the data and see what it tells us. Amy Gromowski is a Senior Leader with the CoreLogic Science & Analytics Center of Excellence. Jeremy Thomason is the Executive Sales Leader for CoreLogic Rental Property Solutions.
Q&A: What Will Lift the Mortgage Market?
Listen to the PodcastMay 29, 2020 | 7:35AM ET
Maiclaire Bolton Smith, Senior Leader of Research and Content Strategy at CoreLogic, sits down with Molly Boesel, Principal, Economist at CoreLogic to discuss impacts on the mortgage market from COVID-19.
Maiclaire: Welcome back to our CoreLogic podcast series looking at the impact of COVID-19 on the U.S. housing economy. My name is Maiclaire Bolton Smith and I am the Senior Leader of Research and Content Strategy with CoreLogic. Today, I’m joined by CoreLogic Principal Economist, Molly Boesel, to discuss the mortgage market, looking at potential impacts posed by the COVID-19 global pandemic. Molly, thank you for joining me today.
Molly: Thank you for having me.
Maiclaire: If we start by looking at interest rates, mortgage interest rates have decreased in the last month and hit a new record low, will that help lift the mortgage market?
Molly: Mortgage rates at the end of April 2020 were almost a full percentage point below where they were a year before, and this decrease in interest rates will spur refinancing. The median interest rate for mortgages currently held by borrowers is 4%, so that means that at the current mortgage rates about half of today’s mortgage holders could significantly reduce their monthly payments.
New homebuyers will also benefit from the decrease in mortgage rates. A borrower taking out a loan for a median priced home would save about $100 per month on their principal and interest payments compared with a year ago. We’ve seen first-time homebuyers respond to these record-low mortgage rates pushing the homeownership rate in the first quarter of this year to the highest level since 2013. Post pandemic, homebuying activity among millennials increased while other homebuying among other age cohorts decreased, indicating that younger generations are also taking advantage of shrinking competition in the market.
Maiclaire: What about constraints on refinancing? Will borrowers be able to qualify?
Molly: That’s a great question. Borrowers who have lost income may have some difficulty refinancing. However, having sufficient equity in a home is another qualifying factor, and equity in residential real estate is at an all-time high. So unlike during the last recession, home equity generally won’t get in the way of refinancing.
Maiclaire: Speaking of home equity, what insights can you draw from CoreLogic’s home equity report?
Molly: For the U.S. overall, the share of borrowers with negative equity is just 3.5%, more than 20 percentage points below what it was during the Great Recession. But when we look below the national level, we see that some parts of the country have much higher negative equity shares. Louisiana stands out with 10% of borrowers in negative equity, as do Connecticut and Illinois, both with 7% of borrowers in negative equity. Layering job loss on top of negative equity could lead to high rates of foreclosure in these states, though much of this will be alleviated by the CARES act, which allows up to one year of forbearance for most borrowers.
Maiclaire: Finally, when do you think we will see the impacts of the COVID-19 pandemic in the housing data CoreLogic releases?
Molly: Because our regular data releases are based on a monthly cycle, we’ll need to wait at least another month before the releases show any impacts of COVID-19. For example, the March HPI report came out last week, and it showed that home prices continued to strengthen in March – that’s because prices captured in the March report were from transactions negotiated prior to the implementation of the shelter-in-place policies. To fill the gap until our monthly releases show the impacts of the restrictions, we’ve supplemented our regular releases with weekly data found on the CoreLogic COVID-19 page.
Maiclaire: Thank you, Molly and thank you for listening. Please check back to this site – corelogic.com/covid19 for ongoing insights from CoreLogic on the COVID-19 pandemic and its impact on the U.S. housing economy.
Coronavirus Threatens Nationwide Fire Suppression Efforts
May 27, 2020 | 5:27AM PT
Saumi Shokraee, Professional, Content & Research
As summer quickly approaches and temperatures begin to rise, states are planning for this year’s wildfire season. With the coronavirus pandemic forcing quarantines and stay-at-home orders across the nation, many communities are concerned that the coming months of wildfires will only add to the crisis.
Western U.S. Is Most at Risk
The risk of wildfire is not equally distributed throughout the nation -- from 2002 to 2018, 85% of the acres burned due to wildfire occurred in states in the western US.[1] The region is also responsible for the overwhelming majority of property damages due to wildfire. This is because many properties in the West are located in the Wildland Urban Interface (WUI), areas where human development comes into close contact with wildfire-prone vegetation.
From 1990-2010, there was a 41% increase in the number of homes located in the Wildland Urban Interface. Today, 1 in 3 homes are in the WUI. [2] Combined with expected warmer than average temperatures, experts predict this year’s wildfire season could be significant. [3] This potential for disastrous wildfires happening during the COVID-19 pandemic is raising concerns across the nation.
State Resources Stretched Thin Amid COVID-19
As states move to position firefighting assets in critical locations, officials are finding that COVID-19 quarantine measures have resulted in significant staff shortages for fire suppression management. Across the nation, the crisis has stalled the hiring and training of new firefighters while also straining already limited emergency services. For example, as a direct result of the pandemic, local fire services in Washington state canceled all three of their fire academies this year meant to train 4,500 firefighters.[4]
Wildfire management sites, with high-density living and working conditions as well as a lack of access to proper sanitation, create an ideal environment for infectious disease transmission.[5] Many firefighters have already caught the virus, as occurred in early April in San Jose, California, when 10% of the local fire department was exposed and 15 firefighters tested positive. [6] As a result of lower staffing, firefighters will likely be working on fires for 40-45 days without any breaks.[7]
These shortages will prove especially challenging considering the federal government was already short of hundreds of firefighters before the virus took hold. An investigation in 2019 found that the Department of Interior had at least 241 fewer seasonal firefighters available than expected. This stands to have a significant effect on fire response in California, as 60% of California’s forests are owned and managed by federal departments.[8] Moreover, data from the National Fire Protection Association in 2018 indicates that the number of volunteer firefighters per capita has been on a steady decline since 1987.[9]
Wildfires do not take a holiday when there is global pandemic. Experts predict that there may be a second wave of coronavirus in the fall, which coincides with California’s wildfire season.[10] This will prove especially challenging for the state as it deals with fire management staff shortages. At-risk communities and state governments serve to benefit from being prepared.
[1] https://www.nifc.gov/fireInfo/fireInfo_statistics.html
[2] https://www.nrs.fs.fed.us/news/release/wui-increase
[3] https://weather.com/forecast/national/news/2020-04-15-summer-2020-temperature-outlook-may-june-july-august
[4] https://www.cnbc.com/2020/04/04/coronavirus-will-obstruct-emergency-services-for-firefighters-during-wildfires.html
[5] https://www.nwcg.gov/committees/emergency-medical-committee/infectious-disease-guidance
[6] https://www.mercurynews.com/2020/04/05/first-coronavirus-cluster-san-jose-fire-department/
[7] https://www.cnbc.com/2020/04/04/coronavirus-will-obstruct-emergency-services-for-firefighters-during-wildfires.html
[8] https://www.latimes.com/politics/story/2019-07-23/peak-fire-season-is-near-and-the-federal-government-is-short-hundreds-of-firefighters
[9] https://www.nfpa.org/-/media/Files/News-and-Research/Fire-statistics-and-reports/Emergency-responders/osfdprofile.pdf
[10] https://thehill.com/changing-america/well-being/prevention-cures/490326-fauci-predicts-another-coronavirus-outbreak-in
CoreLogic Pending Index Indicates Annual Price Growth holding up surprisingly well in May
Read the Full BlogMay 26, 2020 | 7:44AM ET
Bin He, Sr. Leader, Science & Analytics
Frank Nothaft, Chief Economist
The newly released CoreLogic March Home Price Index (HPI) shows that prior to the COVID-19 outbreak home prices were starting to heat up in most places in the United States. However, home prices captured in the March report were from transactions negotiated prior to the implementation of shelter-in-place mandates, and there was a wide expectation that the growth may have decelerated in response to this interruption in demand.
CoreLogic has developed a Pending Price Index using MLS data. The index is built on the price recorded on the contract date rather than the price on the closing date. Since it generally takes 30-45 days to close a sale on average, contracts negotiated in April can be used to project May home prices, which will be the first time for us to see COVID-19’s full impact on the housing market as the April home prices will still have transactions negotiated in the first half of March prior to the implementation of shelter-in-place mandates. The latest CoreLogic Pending Index indicates that annual price growth began to slow in May. However, home prices held up surprisingly well in many metro areas.
Los Angeles Home Price Index holding strong amid COVID-19
May 22, 2020 | 8:27AM ET
Selma Hepp, Executive, Research & Insights and Deputy Chief Economist
Fewer luxury for-sale listings driving down median home price growth
Understanding the impact of the current pandemic on home prices over the coming years is an important question, yet one that may be difficult to answer until the length of the current pandemic is better understood.
In the year leading up to the COVID-19 outbreak, home price growth has remained solid averaging over 3.5% nationally. According to the latest CoreLogic Home Price Index (HPI®) Report, home prices nationally even started heating up in March with the national index showing a 4.5% increase compared to March 2019.
Nevertheless, as President Trump declared a national emergency on March 13, and most of the states issued public health orders to Shelter-in-Place (SIP), home buying activity, along with most other economic activities, came to a standstill. On March 19th, public health officials in Los Angeles – which quickly became one of the nation’s epicenters of COVID-19, issued an order, “Safer at Home”, which prohibited group events and gatherings, required social distancing measures and closed certain businesses. Under the initial order, real estate services were deemed “non-essential”. However, the order was revised April 1 to include real estate as an “essential” service. Nevertheless, even after the revision, open houses were prohibited and buyers resorted to virtual tours. Statewide, similar orders went into effect on the same date.
In the analysis below, we take a look at some of the impacts of the coronavirus on the Los Angeles County housing market using the data from the multiple-listing services (MLSs). But first, similar to the national HPI index, Figure 1 illustrates Los Angeles HPI leading up to the pandemic which showed home price growth accelerating in March, recording a 5% year-over-year increase. The acceleration in home price growth began in the third quarter of 2019 after a 16-month period of slowing growth in the region.
Figure 2 takes a look at recent weekly data and illustrates year-over-year change in median prices of homes sold and homes that entered into pending status, i.e. a contingent offer was signed on the home. Pending sales, which are generally signed about 30 to 45 days before a closing, are a leading indicator for closed sales and hence a preview into possible price changes ahead. Prices of homes sold appear to have remained on average around the 5% growth rate since the beginning of the year. As suggested by the HPI, home price growth accelerated at the end of 2019 and reached almost 8% at the beginning of the year before moderating to an average of 5%. Even in recent weeks, home prices maintained about a 4% annual increase.
In contrast, median price growth of homes that entered into a pending status starting mid-March have started slowing and show some year-over-year declines in the week ending May 2nd. As a result, the leading indicator value of the pending price trend suggests that prices on sold listings will show some slowing for April. According to Corelogic Pending HPI index for Los Angeles, home price growth in April is expected to slow down to a 4.7% year-over-year increase, from a 5% increase seen in March (see Figure 1).
Nevertheless, since the data in Figure 2 captures median home prices which are subject to varying mix of sales, declining pending prices may reflect more lower priced homes going in contract compared to last year. It may also reflect higher bargaining power that buyers now have as competition for homes has waned down.
Figure 2 also illustrates another housing market indicator - the share of homes that sold below the asking price, and according to latest weeks’ data, the share has picked up from about 37% at the beginning of the pandemic to 50%. And while the increase accounts for closings that were contracted prior to the pandemic or at the beginning of the SIP orders, it may reflect some negotiations that occurred as a result of the pandemic. Last time the share of homes selling below the asking price increased to 50% was in late 2018 to early 2019 when Los Angeles and many other housing markets in California hit a speed bump.
Looking forward, Figure 3 illustrates another price trend worth noting – a year-over-year change in median price of new listings – which suggests that the price growth of newly listed homes has slowed considerably from 8% in mid-March to a slight decline at the end of April. Since again these are changes in median prices, the decline may reflect changing composition of the new for-sale inventory. And, as Figure 4 suggests, availability of higher priced inventory in Los Angeles has declined on a faster rate than lower priced inventory. However, these inventory declines in general are providing a floor for home prices. In other words, the relative strength of home prices is supported by very, very limited for-sale inventory.
Taken together, estimating the impact of the current crisis on the housing market is still a moving target with many moving parts. There are certainly consumers who are forced to make some decisions about their homes, though there are also many others who are waiting for some level of normalization. Most recent market dynamics are not necessarily an indication of what’s to come particularly given the momentum gained in the housing market prior to COVID-19.
According to CoreLogic mortgage purchase application data, millennials were the most active buyers in the market prior to COVID-19 with application rates 20% to 30% higher compared to the first two months of last year (Figure 5). Even through March, the mortgage application rate among millennials exceeded that of last March, up 2%, while the other cohorts saw a notable decline in applications in March. Continued demand from millennial buyers is a positive sign that home sales will bounce back when the economy returns to a “new normal”.
April Home Purchase Applications Trends for First-Time and Repeat Homebuyers
Read the Full BlogMay 20, 2020 | 8:18AM ET
Archana Pradhan, Principal, Economist
Home-purchase demand started strong for both first-time homebuyers and repeat homebuyers in January and February of 2020, supported by a lower mortgage rate and unemployment rate than one year earlier. As the novel coronavirus (COVID-19) spread in the U.S., we have begun to see its impact on decisions to buy homes. To observe how COVID-19 may have affected home purchases by first-time and repeat buyers, we used CoreLogic Loan Application data for January through May 2nd, 2020 and compared this year’s activity with 2019.
Financial Planning during the COVID-19 Pandemic
May 18, 2020 | 9:24AM ET
Yanling Mayer, Principal, Economist
Record-low interest rates combined with record-high home prices can unleash superior value for HECM borrowers
The Coronavirus pandemic has disrupted the global economy, sparing no economic sector across its indiscriminating path. The U.S. housing market has already seen an 8.5% decline in March’s existing-home sales compared with February and even a steeper decline of 15.4% in new home sales.[1] More dramatic declines are expected for the coming month as the lockdown measures across the U.S. are expected to continue at least through the end of April. Leading economic indicators such as unemployment insurance claims shows that in the 6-weeks ending on April 25, total job losses reached a staggering 30 million, or an equivalent of 20.8% of the civilian workforce.[2]
Millions of homeowners have sought the mortgage forbearance relief provide by the CARES Act: As of April 19, forbearance loans have reached 7% of the loans in servicing.[3] Lenders have tightened credit standards due to unprecedented uncertainty and market conditions. Despite all the challenges presented by the crisis, reverse lending may emerge as a bright spot as the current market conditions seem to offer an attractive value proposition. Here are some of the reasons.
- Housing wealth is at all-time highs
Before the pandemic crisis, home prices were at all-time highs with annual growth at a robust rate of 4.0% (as of February 2020). See Figure 1. On average, Home Equity Conversion Mortgage (HECM) borrowers have occupied their home for about two decades.[4] That means today’s average HECM borrower typically moved into their current home around 2000. For the two decades from 2000 to early 2020, the CoreLogic national Home Price Index had more than doubled (up 113%).
- Dual benefits of record-low mortgage rates
Mortgage rates have fallen to new lows following the pandemic breakout. Reverse mortgage borrowers can benefit from low interest rates in more than one important way. First and foremost, the cash value of the reverse loan is enhanced when interest rates are low. The cash value, knowns as initial principal limit, is the discounted value of the property’s current appraisal and therefore, the lower the interest rate, the larger the present value of loan proceeds that are available to the borrower. This feature belongs uniquely to reverse products, and no other mortgages are like it. Figure 2 provides the sensitivity of cash value to different interest rates for a borrower aged 62. Different cash values are shown at different interest rate.
At a 3.25% interest rate, a home appraised at $341,000 has a cash value of $178,000. But that will decline quickly with rising interest rates. At 4.00%, for example, the cash value has already dropped by nearly $20,000 to $160,000.
Low interest rates also mean the loan balance will grow slowly over time. This second feature is similar to forward mortgages except that the borrower does not need to make any repayment of the loan or accrued interest until the borrower decides to pay part or the entire loan off.
- No credit history or credit score required
The pandemic has been a huge blow to many Americans’ finances as millions have lost their job and income. While lenders have quickly tightened credit standards in a time of high uncertainty, the impact on reverse mortgage borrowers are expected to be minimal. More than 95% of the reverse market consists of FHA-insured HECM loans which are supported by Ginnie Mae in the secondary market securitization. Nor can HECM lenders underwrite the loans based on borrower’s income or credit history. All that is required of borrowers is that they demonstrate a financial ability to maintain the property by paying property tax and insurance.
In today’s challenging time brought on by the pandemic, financial planning has taken on a whole new dimension when consumers are confronted with financial as well as public health uncertainties. For seniors and retirees looking to secure additional financial stability through their home equity – whether to supplement their retirement income or to help deal with the financial hardship the crisis may have inflicted – current market conditions seem to offer an attractive value proposition.
[1] Source: National Association of Realtors; U.S. Census Bureau.
[2] Source: Department of Labor.
[3] Source: Mortgage Bankers Association https://www.mba.org/2020-press-releases/april/share-of-mortgage-loans-in-forbearance-increases-to-699.
[4] See https://www.corelogic.com/blog/2019/12/hecm-loans-in-2018-borrower-demographics-and-ownership-tenure.aspx
COVID-19 and Affordable Housing
May 15, 2020 | 8:14AM ET
Russell McIntyre, Sr. Professional, Public Policy & Industry Relations
The United States spent the past decade recovering from the worst economic downturn since the Great Depression in the 1930s. During this span, our economy has rebounded significantly: lending standards have been gradually loosened to expand access to credit; homebuilders have continued construction of both single-family and multi-family residential properties; and the average American household income has gradually risen for all income brackets.
Now, after ten years of recuperation, our country faces the worst global pandemic since the spread of the Spanish influenza in the late 1910s, and we must prepare for the effects it will have (and is already having) on affordability within our nation’s housing market.
While the recent developments mentioned above have helped millions of Americans gain access to the housing market, they have not done much to make that housing market more affordable. With growing costs for materials, labor, and land, homebuilders have increasingly focused on the top of the housing market, despite demand being strongest for entry-level homes. Although construction starts have risen steadily, the entrance of the millennial generation into the housing market (coupled with historically low interest rates, an increased propensity for renovations, and a number of additional factors) has helped to create a shortage in supply. And though average household incomes continue to improve, they have not kept up with corresponding increases in home prices since at least the mid-1980s.
With these economic trends in mind, one question begs to be answered: will the COVID-19 health crisis exacerbate pre-existing affordability conditions in the housing and mortgage markets? And if so, how?
Tightening Supply
As mentioned above, supply was already shrinking prior to the arrival of the coronavirus pandemic, and predictions for 2020 had this supply diminishing even further. However, total housing starts showed promising signs in the early months of the year, with warm winter weather and low interest rates fueling a rise in demand during Q1. This led the National Association of Home Builders (NAHB) to forecast a much rosier expectation for 2020 than originally expected. Unfortunately, the COVID-19 crisis has led NAHB to drastically alter their estimations to reflect what they predict will be an “incredibly disruptive” second quarter. Why? Two main reasons: a shortage of workers, and a shortage of materials. Regarding the former, the overwhelming majority of states have enacted stay-at-home/shelter-in-place policies that make it difficult for many workers to continue their jobs unless deemed ‘essential employees’, which varies from state to state. In addition, supply chains are beginning to be disrupted, leading to shortages or higher prices for materials such as lumber and sheet rock.
Impacted Individuals
Our nation’s preexisting housing affordability issues disproportionately impacted low-to-moderate-income individuals and families, many of whom are spending more than 30%, 40%, and sometimes even 50% of their monthly income on housing expenses. When an individual has to pay that high of a cost for housing, and when wages don’t keep pace with home-price growth, every hour worked and every dollar earned matters that much more. Unfortunately, many of these workers are part of the service, retail, and/or transportation industries and are unable to bring their jobs home with them, which means those wages are simply lost. Congress has attempted to aid some of these individuals by increasing unemployment benefits, instituting eviction forbearance programs, and establishing the Paycheck Protection Program in an effort to keep small business owners afloat. Unfortunately, the question remains: will these benefits come soon enough for those families who were already living paycheck-to-paycheck prior to the pandemic? And once this crisis passes, will there be enough available jobs for those attempting to reenter the workforce?
Reduced Access to Credit
Over the past decade, millions of Americans gained access to credit as traditional lenders gradually recovered from the initial shock of the recession, and as nonbank lenders began to exert a larger presence in the market. Unfortunately, the COVID crisis has “has caused the perfect storm for mortgage markets” and has led to a contraction of the credit box. Lenders are able to set their own credit score requirements and, as many brace for an incoming wave of mortgage (and other) loan defaults, they are now taking on less risk and toughening their loan requirements by asking for higher credit scores and larger down payments. These recent developments are bad signs for affordable housing advocates, who feel uncertain about the short-term effects the coronavirus is already having on the markets. This tightening of credit is being felt on a larger scale by the construction industry as well: FDIC data shows a significant decline in year-over-year growth rates for acquisition, development, and construction AD&C loans, which companies rely on to get projects off the ground.
Maintaining Insurance Operations During the COVID-19 Crisis
Listen to the PodcastMay 13, 2020 | 5:59AM PT
Mikhail Palatnik, Executive, Product Management
Saumi Shokraee, Professional, Research & Content
As the COVID-19 pandemic continues to wreak havoc on the economy, businesses are facing new challenges as they find ways to take care of their employees and customers. In particular, the coronavirus is proving challenging to the property & casualty (P&C) insurance industry, where inspectors and adjusters traditionally visited properties in-person. Policyholders, afraid of the possibility of infection, are opting out of allowing outside individuals into their home. With the nation simultaneously struggling through a convective storm season, insurers are needed more than ever to provide coverage and settle claims promptly and efficiently.
Fortunately, using the latest technology, we can create solutions that allow us to continue underwriting and claims processing even during these trying times.
In an exclusive podcast with Insurance Journal, CoreLogic insurance executive Mikhail Palatnik discusses how technology and value-added services can keep business running strong amidst the crisis.
Here are three solutions to COVID-19 P&C insurance business disruption.
- Virtual Surveys in Underwriting
Traditionally, inspectors visited policyholders in-person to verify property characteristics and assess the risks and vulnerability of a property. With a virtual survey, underwriters can comprehensively assess risk without ever seeing or visiting anyone at the property site. Leveraging the power of high-resolution public and proprietary imagery sources, these images along with robust pre-fill data provide information on property condition and exposure. Software can be used to calculate valuation and coverage. Once underwriters finish with all their observations and valuation, they can review hazard risks and occupancy data to make a final underwriting decision.
- Do-It-Yourself (DIY) Surveys in Underwriting
Policyholders can get involved in the process too. Now that all policyholders most likely own their own camera or smartphone, they can take their own photos, answer a few questions about their property, and then submit the information to their carrier in an instant. These images can be used to compile and create measurements such as total living area or external wall materials. Combining this information with public and proprietary imagery can allow underwriters to determine property conditions and exposures.
- DIY Surveys in Claims Processing
Unlike an automobile claim, property claims typically require an adjuster to enter a home to document damages with measurements and photographs and then write an estimate. This in-person component of handling property claims combined with the pandemic is posing a serious challenge to the way P&C insurers conduct their business.
With virtual adjustment solutions, we can leverage forecasting and weather forensic services to remotely predict potential damages before disaster strikes. Afterwards, DIY tools used by policyholders can expedite the claims process and avoid the need for in-person visits amid the coronavirus pandemic. Policyholders can leverage a claims portal to have direct access to their claim; where they can take their own photographs and measurements of their property and upload them directly to a claims platform. This creates a direct conduit for sending and receiving information with the policyholder.
Virtual surveys and DIY surveys are less expensive than in-person solutions, providing cost effective solutions for carrier underwriting inspections and claims adjuster budgets. With modern technology, we can ensure that underwriting and claims, critical pieces of the P&C insurance industry, continue to operate amid COVID-19.
Chief Actuary Howard Kunst and Brian Fannin, Casualty Actuarial Society, Discuss Property-Casualty View
May 11, 2020 | 7:31AM ET
CoreLogic Chief Actuary Howard Kunst sits down with Brian A. Fannin, Staff Actuary at the Casualty Actuarial Society, author of a recent paper for the Casualty Actuarial Society “COVID-19: The Property-Casualty Perspective” to discuss his findings.
April Update: Federal Regulatory Agency Actions Taken
View Regulatory TrackerMay 8, 2020 | 8:03AM ET
Russell McIntyre, Sr. Professional, Public Policy & Industry Relations
While our nation faces its worst public health crisis in over a century, it also faces a potential economic one. With Americans across the country stuck at home, many sectors of the economy are running with a reduced labor force and shorter working hours. Many families aren’t collecting paychecks, and small businesses are forced to find ways to cope, if not shut down entirely.
In an effort to address some of these negative repercussions, the federal government has taken a number of steps via statements, notifications, bulletins, and additional actions that have been issued by agencies and bureaus spanning the entire breadth of the executive branch.
The housing and mortgage industries have seen their fair share of actions over the past few weeks that have had drastic effects on both day-to-day operations and potential long-term forecasts. CoreLogic has been keeping track of the daily updates coming from agencies and bodies such as the Federal Reserve, U.S. Department of Housing and Urban Development, Federal Housing Finance Agency, Fannie Mae and Freddie Mac, and many others. These updates address the many facets of the Paycheck Protection Program, implementation of the provisions in the CARES Act passed by the U.S. Congress, interagency guidance on property inspections and appraisals, and a range of additional issues. While this document does not claim to cover every action issued by every office within the executive branch, it does capture those that are of utmost importance to CoreLogic and others throughout the housing and mortgage industries.
Navigating New Mortgage Market Trends in the Wake of COVID-19
Watch the WebinarWithin a matter of mere weeks in March, the mortgage industry underwent massive changes. New market trends have emerged in the wake of COVID-19, and the housing market has drastically changed course from the beginning of the year.
In this webinar hosted by HousingWire Magazine, CoreLogic Chief Economist Frank Nothaft is joined by mortgage industry experts and economists to review and educate you on new trends that are developing. This includes perspectives on the impact of COVID-19 to Conventional, Government and Private RMBS mortgage markets.
The following topics are addressed:
● Housing and mortgage market impacts as a result of the coronavirus pandemic
● New market trends that have developed in the wake of COVID-19
● Public policy developments and possible outcomes for the housing market
● Loan performance projections using CoreLogic risk models under different recession forecasts
Pending Sales Reveal Annual Price Growth Slowed by 0.3 Percentage Points in April
Read the Full BlogMay 6, 2020 | 7:30AM ET
Bin He, Sr. Leader, Science & Analytics
Frank Nothaft, Chief Economist
COVID-19 effects on housing market include slowing of home-price growth
Home price indexes (HPI), such as the CoreLogic HPI and the CoreLogic Case-Shiller Indexes, are vital tools for understanding valuation and risk trends in real-estate markets. The main ingredients in the CoreLogic indexes are prices on settled transactions, as subsequently recorded by local jurisdictions in publicly available records. Since it takes time to record transactions, collect data, and produce indexes, there is always a lag between the availability of the data and the calculation of the HPI. Thus, the effect of the COVID-19 disruptions on home sales may not appear in HPIs for another month or two.
On the other hand, the home buyer and seller agree to a price in their sales contract, which is generally signed about 30 to 45 days before a sale is settled. This information can be a leading indicator of what to expect over the next couple of months.
CoreLogic has developed a Pending Price Index using MLS data. The index is built on the price recorded on the contract date rather than the price on the closing date, and hence by design is a leading indicator of HPIs that utilize final recorded home price to generate the index. The Pending Price Index is built using a hedonic approach, which differs from repeat sales methods used for most other HPIs.[1]
To understand the time series relationship between the contracted price and the settlement price data, we estimated correlation coefficients for a 20-city composite Pending Price Index to its corresponding 20-city composite CoreLogic HPI. The 20-city composite index is the aggregated index for 20 major metropolitan areas.[2]
[1] Stephen Malpezzi, Hedonic Pricing Models: A selective and Applied Review, Housing Economics and Public Policy Chapter 5, 2008
[2] The 20 urban areas are Atlanta, Cambridge (MA), Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix, Portland, San Diego, San Francisco, Seattle, Nassau County-Suffolk County (NY), Tampa, and Washington DC. The composite index is the weighted average of indexes in these cities where the weight is the entire housing stock in units.
Collateral Technology Update Webinar
Watch the WebinarWatch experts from the CoreLogic Collateral Technology team discuss how we can overcome the current challenges, respond to the changing regulatory landscape, and enable you to quickly adapt and scale your business processes as needed. In this 60-minute video:
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Dr. Frank Nothaft, Chief Economist for CoreLogic, gives insight into market conditions over the next 90 days.
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Shawn Telford, Sr. Leader of Product Management for CoreLogic, reviews how the Collateral Technology platforms have evolved to account for recent policy changes.
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Sage Nichols, Executive for CoreLogic interviews Jerry Yurek, SVP of Valuations for PNC Bank, regarding how his team is managing their business in today’s environment.
Q&A: What We Can Learn From Australia's Response to COVID-19
Listen to the PodcastMay 4, 2020 | 7:46AM CT
Maiclaire Bolton Smith, Senior Leader of Research and Content Strategy at CoreLogic, sits down with CoreLogic Executive, Research Director for Asia Pacific Tim Lawless to discuss Australia's response to and ramifications from COVID-19.
Welcome back to our podcast series looking at the impact of COVID-19 on the housing economy. My name is Maiclaire Bolton Smith and I am the Senior Leader of Research and Content Strategy with CoreLogic. Today, I’m joined by Tim Lawless, CoreLogic Executive, Research Director for Asia Pacific based in our Sydney, Australia office to give us a perspective on how COVID-19 has impacted the housing market in Australia.
Maiclaire: Tim, thank you for joining us today. Similar to here in the U.S., Australia also implemented a range of social distancing policies in March, with some specifically aimed at the real estate sector. Have you seen an impact on housing activity since these policies were implemented?
Tim: Australia’s response to COVID-19 has been relatively quick and it’s been centred on closing borders along with mandatory quarantining measures for travellers, limiting public gatherings and conducting a large-scale testing and tracing regime. Australia also implemented a range of policies around social distancing that involved closing businesses within the hospitality, food services, gaming, gyms, public galleries and other sectors. The policies also extend specifically to the real estate sector, with a ban on open home inspections, although private inspections can still go ahead, and barring on-site auctions, although online auctions are still progressing.
Monitoring the flow of housing related activity does show a sharp reduction in real estate agent activity, although housing values seem to be holding somewhat more resilient. Prior to Easter, real estate agent activity had slumped by around 60% compared with the same time a year ago and the number of newly advertised properties has fallen by around a third relative to last year. Mortgage related valuation activity is also trending lower, pulled down by a drop in valuations related to home sales, while valuations related to refinancing have held firmer.
The decline in transaction activity may be something that is helping to preserve housing values as well, because there isn’t an influx of new supply putting further downward pressure on prices. Much of this has to do with Australian Banks offering a temporary reprieve on mortgage repayments to customers, helping Australia’s housing market avoid a surge in distressed sales.
Maiclaire: Australia’s federal and state governments, as well as the Reserve Bank, Federal Treasury and prudential regulator seem to have been on the front foot to support economic conditions in Australia. Can you comment on the impact this stimulus might have on the residential housing market?
Tim: Adding up the total value of federal, state and monetary stimulus announced to date equates to almost 17% of Australian GDP. The stimulus measures have been anchored by a $213 billion fiscal stimulus that focusses on keeping small to medium enterprises afloat, subsidising worker incomes, incentivising investment and temporary tax relief.
The stimulus measures are tailored to the structure of the Australian economy. Unlike Europe and America, nearly half of the Australian workforce are employed by small businesses, and the vast majority of businesses in Australia are small to medium enterprises made up of less than 20 people. This presents a risk during the downturn, because small businesses do not tend to have large capital reserves which can act as a buffer during a downturn.
A game-changing policy in Australia has been the Jobkeeper package, which essentially allows employment relationships to stay intact by providing employers with wage subsidies for employees, and encouraging businesses to provide employees with some level of work, even if that’s just a few hours a week.
Without this level of stimulus, Australia’s unemployment rate would have risen from the current 5.2% in March, to around 17% by June. The current forecasts have the unemployment rate peaking at around 10% in June before drifting lower as social distancing policies are eased.
Keeping a lid on unemployment through supporting businesses is a key pillar in supporting housing markets, but also we have seen each of Australia’s major lenders announce leniency measures for distressed borrowers who can take a repayment holiday over the next six months if required.
Another positive from the government stimulus is that it should support a more rapid recovery as social distancing policies are lifted.
Maiclaire: Predicting where housing values may end up is a challenge under the best of conditions, but nearly impossible at the moment - considering the unprecedented level of uncertainty. Do you have any ideas for where Australian housing values may end up?
Tim: The performance of the housing market is reliant on a variety of factors with labour market conditions, credit availability and interest rates some of the most influential elements affecting performance. Predicting the trajectory of housing values implies an accurate prediction of economic conditions and credit trends, which is hard at the best of times, but virtually impossible while so much uncertainty abounds. While we are certain that interest rates will remain at their emergency lows for at least the next three years, the stimulus of low interest rates is likely to be offset by a high jobless rate, broadly weak economic conditions and heightened risk aversion from lenders.
I think there will be substantially more downwards pressure on housing activity than housing values. Historically, Australian housing values have weathered previous shock events quite well, generally showing only mild falls before stabilising or rising, whereas the number of homes sales has typically fallen significantly; by at least 20% but through the most recent downturn we saw housing market activity slump by around 40%.
Overall, we expect housing values are likely to fall by around 10%, which is a view held by most of the mainstream economists as well, although as always there are some more pessimistic views at the extremities.
Housing values should be provided some insulation from a range of factors, but most importantly the six month loan repayment leniency from lenders will be a significant factor that will limit the flow of distressed properties onto the market. The significant stimulus helping to support incomes and retain jobs is another factor, along with record low mortgage rates and the temporary nature of this disruption.
Of course our views on the market are constantly evolving as more information emerges and policy changes are announced, and clearly there is a significant level of downside risk to our outlook.
Maiclaire: As a result of COVID-19, how do you see the real estate sector changing over both the short term and long term?
Tim: The biggest change is likely to be around digital technologies becoming more popular and widely used. With social distancing policies preventing group open homes and on-site auctions, the industry has quickly and successfully pivoted towards enabling these critical activities in a digital environment.
This digital environment goes well beyond searching for a property, virtual inspections and remote bidding. It extends into digital signage, online conveyancing and settlement. There is a high likelihood that physical distancing will remain a feature of our communities for some time, so we are expecting this move towards digital enablement to be more a structural shift rather than something more temporary.
Shorter term we are seeing the real estate sector respond to this disruption in a number of ways. The best agents have stepped up their communications with the market to ensure their clients and prospects are well informed about changing conditions and prospects. With some additional downtime, we are also likely to see agents taking advantage of professional development opportunities around training and coaching, as well as mentoring from more experienced agents towards those with less experience.
Longer term, with the move towards digital technologies, potentially we will see less requirement for a substantial physical presence from real estate agencies which implies less requirement for desk space and shopfronts while the industry maximises the digital footprint.
Maiclaire: It’s always nice to end these sessions on a positive note, so Tim, is there anything at all we can take away from this crisis?
Tim: With housing values likely to fall over the coming months, housing affordability could improve, as long as incomes don’t fall by a larger amount than housing values. Coming into this crisis, Sydney’s dwelling price to income ratio was around 9 times and Melbourne’s ratio was around 8 times. The previous housing downturn, which saw Sydney housing values fall by around 15% and Melbourne values down around 11% resulted in a significant affordability boost which was a major factor supporting a substantial rise in first home buyer activity.
Another positive could be a renewed willingness from employers to support remote working arrangements. The most affordable markets generally have long commuting times to the major working centres. Increased opportunities to work from home could see these more affordable housing locations become more popular as commuting times become less important.
Another positive legacy from COVID 19 is likely to be the holistic move towards full digital enablement. The real estate sector embraced online searching quite early, but a fully digital sales and settlement process has been a much slower process. Social distancing policies have pushed the industry much further along the digital enablement spectrum which is likely to result in long term productivity benefits for both buyers and sellers.
Maiclaire: Thank you, Tim. And thank you for listening. Please check back to this site – corelogic.com/covid19 for ongoing insights from CoreLogic on the COVID-19 pandemic and its impact on the U.S. housing economy.
Sizing the Risk of Property Tax Revenue Disruption to Municipalities
Read the Full BlogMay 4, 2020 | 12:34 PM ET
Pete Carroll, Executive, Public Policy & Industry Relations
Anusha Ayyar, Executive, Program Delivery & Business Intelligence
John Gilberti, Sr. Leader, Operations
Tripti Sarda, Sr. Professional, Finance
Rich Terbrack, Sr. Professional, Data Analysis
The COVID-19 global pandemic is a public health crisis of unprecedented proportions that has upended the global economy in ways we’re only beginning to understand. On March 27th, 2020 the CARES Act legislation was enacted, which included critical relief for single family residential homeowners with federally-backed mortgage loans.[1] Among other relief, the CARES Act created a 60-day foreclosure moratorium, as well as the right for borrowers to request forbearance (i.e., a pause) to their mortgage payments for an initial term of up to 180 days, with the right to request an extension for up to an additional 180 days.
Over the last month, mortgage market stakeholders and policymakers alike have worked hard to put this important legislation into practice. Among the early operational concerns to emerge, which continues to be a topic of discussion, is the possible risk of financial disruption to mortgage servicers that own the mortgage servicing rights (MSR) to the mortgage loan.[2] When borrowers initiate a pause to their monthly payments, it’s their servicer that ensures mortgage principal and interest continues to be “advanced” to the bond investor, along with escrowed property taxes to the county and escrowed homeowners insurance to the insurance carrier (these payment components are referred to as “PITI”).[3]
Importantly, when mortgage servicers advance PITI payments on behalf of the borrower, they source the capital from their own balance sheet, typically in the form of a line of credit they hold with another financial institution or even with their own cash reserves. However, this outlay is intended to be short-term; after varying periods of time, the servicer is reimbursed for these advances by the applicable federally-backed mortgage program.[4]
Under ordinary circumstances, this system continues uninterrupted. However, when unexpected catastrophes occur on a significant scale, as is the case with the COVID-19 national emergency, mortgage servicer liabilities have the potential to outstrip available assets of at least some servicers. This is a particular risk for non-bank servicers that tend to hold less capital relative to their bank servicer counterparts that have retail deposit bases to draw from.
Accordingly, policymakers and regulators have been closely monitoring the number of homeowners that request their right to forbear their mortgage payments. They are also monitoring the impacts of servicer advance requirements on the health of servicer balance sheets; particularly given the significant demands on servicer capital. Based on this ongoing monitoring effort, regulatory agencies overseeing the federally-backed mortgage programs have announced a series of program and policy changes that provide liquidity relief to servicers, which industry has welcomed. These actions may well ensure sufficient liquidity relative to both PI and TI advances, however, discussions persist in some quarters with respect to whether more needs to be done to ensure servicers have the ability to advance escrowed property tax payments and homeowners insurance premiums in a timely fashion. The implications of a material drop off in escrowed TI advances extends beyond mortgage market and homebuyer disruptions. Municipalities tend to rely, at least in part, on timely receipt of property tax revenues (whether advanced by the servicer via escrow account disbursement or paid directly by the borrower) to fund their basic services and public works.[5]
Accordingly, the objective of this spotlight series is to make available data and facts that can assist regulators and industry stakeholders alike as they evaluate possible risks of a material drop-off in servicer advances of escrowed property tax payments or delinquent non-escrow borrower property tax payments. As the largest provider of property tax and escrow services to the single family residential mortgage markets, CoreLogic is uniquely positioned to size the universe of escrowed property tax payments expected to be advanced by servicers over the course of the remainder of 2020, including what the outer-boundary of potential risk exposure to municipalities may look like at varying levels of forbearance activity, among other insights.
[1] Includes loan programs offered by Fannie Mae, Freddie Mac, and Ginnie Mae (including FHA, VA, and USDA programs)
[2] Also known as “mortgage lenders,” the mortgage servicer is the company to whom borrowers sends their monthly mortgage payment
[3] The federally-backed mortgage lending programs require servicers to establish borrower escrow accounts to help ensure the borrower’s timely payment of property taxes, homeowners insurance, and any other applicable assessments on their property, in addition to the borrower’s monthly principal and interest payments on the mortgage loan. Note that Fannie Mae and Freddie Mac permit servicers to waive the escrow account requirement for borrowers under certain circumstances, which are the relative exception. The analysis herein distinguishes between servicer advances of property taxes from the borrower’s escrow account and non-escrowed property tax payments made directly by the borrower.
[4] Each federally-backed mortgage lending program has its own requirements for the PITI components the servicer is expected to advance. For example, Fannie Mae and Freddie Mac requires some servicers to advance ITI-only and others TI only. Fannie Mae requires others still to advance the full PITI, as does Ginnie Mae. Moreover, each program has different event triggers and timeframes defining when servicer advances can cease and receive reimbursement during the COVID-19 national emergency.
[5] Some and perhaps many MSAs/counties have a range of tax revenue sources and some also may have better reserves in place than others. Predicting the consequence to a given MSA/country of even a material drop off in property tax revenues isn’t within the purview of this research.
Will COVID-19 Slow U.S. Mortgage Demand?
May 1, 2020 | 7:53AM ET
Archana Pradhan, Principal, Economist
Purchase Applications drops by 30% in the second week of April compared to the same week of the prior year; Refinance Applications are up
To observe effects of COVID-19 on mortgage demand, we used CoreLogic Loan Application data through April 11, 2020 and compared the number of applications by week with the same week in 2019. The two charts show the year-over-year percent change in the number of loan applications for home purchase and for refinance.
Figure 1 shows home-purchase loan applications and Figure 2 shows refinance applications. Two dates are highlighted on each chart: February 29 recorded the first death in the U.S. from COVID-19 and announcement of travel restrictions to Italy and South Korea; on March 13 President Trump declared a national emergency.[1]
Home-purchase loan applications picked up after the second week of January 2020. The increase in demand in early 2020 was supported by a robust economy and lower mortgage rate than one year earlier. However, activity started to slow during the second week of February and was running below the pace of 2019. As of the week ending April 11, home-purchase loan applications for 2020 were 30% less than the same week in 2019.
Similarly, refinance applications spiked this year as mortgage rates dropped. The volume reached a peak in the first week of March as interest rates on 30-year refinance loans reached a record low, according to interest rates reported in the CoreLogic application data. Refinance applications dropped as the mortgage rate rebounded about 20 basis points within a week of hitting its low before it started to rebound during the last week of March.
We will continue to monitor the performance of the housing market in light of COVID-19 using CoreLogic high-frequency and current high-frequency and current data.
[1] https://www.nytimes.com/article/coronavirus-timeline.html
APRIL
How many of America’s homeowners will be pushed into mortgage forbearance or delinquency by the pandemic?
April 29, 2020 | 7:19AM ET
Yanling Mayer, Principal, Economist and Frank Nothaft, Executive, Chief Economist
—3 Million Borrowers Estimated to be in Forbearance or Delinquency at Least 90 Days in Baseline Projection—
The serious delinquency rate, the percent of mortgages past due at least 90 days or in foreclosure, is an important gauge of the conditions in the mortgage market. At the end of January 2020, prior to unprecedented lockdowns and social distancing measures to contain the spread of the coronavirus, the serious delinquency rate stood at a generational low of 1.2% and the CoreLogic Home Price Index for the U.S. was growing at a robust rate of about 4.0%.[1]
But all that is expected to change quickly in the coming months. After all, the coronavirus has brought the U.S. economy to a virtual halt in just a matter of weeks, throwing millions of Americans out of work. According to the Department of Labor, new unemployment insurance claims in the four weeks ending April 11 reached more than 22 million, averaging 5.5 million per week and amounting to 13.2% of the civilian workforce, as the U.S. economy fell into recession.
The unemployment rate – 4.4% in March – is expected to exceed 10% soon, despite unprecedented economic stimulus by the U.S. government and the Federal Reserve to counteract the recession. For the mortgage industry, staggering jobless claims will contribute to missed or delayed mortgage payment as millions of homeowners who, without a job and the steady income it provides, will be unable to continue those monthly payments.
The CARES Act provided protection for homeowners with a federally backed mortgage loan, that is, a loan insured, guaranteed or held by a Government Sponsored Enterprise or a federal agency. Under the Act, a borrower may request forbearance for up to 180 days and may request an additional 180 days after that.[2] About 70% of home loans are estimated to be federally backed.[3]
While there has not been a historical precedent for how a pandemic could impact mortgage forbearance, we chose to model the relationship between the unemployment rate and the serious delinquency rate. We have seen high unemployment have had a profound impact on mortgage delinquencies during the last financial crisis when millions of Americans lost their jobs and income. After all, what could be a better predictor than homeowner’s employment and job security when it comes to affording mortgage payments? We view the resulting projection of the serious delinquency rate as a measure for the percent of home loans that are likely to be seriously delinquent or in forbearance for at least 90 days.
The model was estimated from January 1999 to February 2020 and uses three different scenarios for the path of the unemployment rate through the end of 2021 – Baseline, Optimistic, and Pessimistic – to develop alternative projections.[4]
Under the baseline scenario with the unemployment rate rising to 12% in 2020Q2 and remaining at or above 8% for four quarters, the forbearance-serious delinquency rate is expected to rise quickly from its current 1.2% (as of January) to reach 3.2% in June and 4.9% in December. This suggests about 3 million homeowners will have had at least three months of forbearance or have been seriously delinquent by then.[5] At its peak, which is projected to occur in Q1 of 2021 with an unemployment rate 8.0%, the forbearance-delinquency rate will reach 5.1%
In a pessimistic scenario, where the unemployment rate is projected to hit 20% in 2020Q2 and remain above 10% through 2021, the forbearance-delinquency rates are projected to rise rapidly and reach double digits (10.3%) in 2021Q1, or about 5.5 million homeowners. In the optimistic scenario the unemployment rate peaks at 6.4% in 2020Q2 and declines to below 4% by the second half of 2021, the forbearance-delinquency projections for June and December of 2020 and June 2021 are 1.8%, 2.0%, and 1.6%, respectively, and a peak of about 1 million homeowners who are in forbearance or delinquency for a minimum of 90 days.
As of April 12, the percent of loans that had entered forbearance had already reached 5.95% of all outstanding mortgages, according to the Mortgage Bankers Association.[6] How many of these loans – plus those that may enter the forbearance pipeline in the coming days and weeks – will remain in forbearance for 90 days or more and at some point become latent defaults? It is too soon to predict how the mortgage market will unfold without a better sense of when the crisis will be resolved. For now, the more relevant questions are perhaps how bad the recession will become and low long it will last. Will it outlast the full 12-month forbearance? Will it rival the Great Recession so that millions of these homeowners ultimately could not afford their mortgage but contemplate giving up their home?
[1] See CoreLogic’s Latest Loan Performance Insights and U.S. Home Price Report: https://www.corelogic.com/blog/2020/4/mortgage-delinquencies-started-2020-at-very-low-levels.aspx; https://www.corelogic.com/blog/2020/4/us-home-prices-were-heating-up-prior-to-the-coronavirus-outbreak.aspx
[2] See https://www.consumerfinance.gov/coronavirus/cares-act-mortgage-forbearance-what-you-need-know/
[3] See https://www.urban.org/urban-wire/price-tag-keeping-29-million-families-their-homes-162-billion
[4] The three U.S. civilian unemployment rate paths were from the National Association for Business Economics Flash Survey (April 10, 2020). The “full sample median” was used for the Baseline path, the “five lowest” for the Optimistic, and the “five highest” for the Pessimistic.
[5] The CoreLogic Home Equity Report for the fourth quarter of 2019 estimated that the number of first liens home loans in the U.S. was 54 million as of year-end 2019.
[6] See https://newslink.mba.org/mba-newslinks/2020/april/mba-weekly-survey-share-of-mortgage-loans-in-forbearance-rises-to-5-95/
COVID-19 Impact on Home Buying by Age Cohort
April 27, 2020 | 8:14AM ET
Archana Pradhan, Principal, Economist
Older Homebuyers are Affected more than Younger Homebuyers by COVID-19
Millennials represented the largest share of homebuyers at 47% in 2020, followed by Generation Xers (32%) and baby boomers (19%), according to CoreLogic loan application data for January through March.[1] As the novel coronavirus spread in the U.S., we have begun to see its impact on decisions to buy homes as well. To observe how COVID-19 may have affected purchases by age cohort, we used CoreLogic Loan Application data by week for January through March 28, 2020 and compared this year’s activity with 2019.
Figure 1 shows home-purchase loan applications by age cohort. Two dates are highlighted on each chart: February 29 recorded the first death in the U.S. from COVID-19 and announcement of travel restrictions to Italy and South Korea; on March 13 President Trump declared a national emergency.[2]
Home-purchase loan applications picked up after the second week of January 2020 for all age cohorts, with the highest surge for millennials. The increase in demand in early 2020 was supported by a robust economy, a lower mortgage rate than one year earlier, and a rising desire for first-time homeownership among Millennials. However, activity started to slow during the second week of February and was running below the pace of 2019 for all the age cohorts. As government officials warned that the elderly were at greater health risk from the virus, many prospective buyers who were older appear to have delayed their purchase decision in favor of ‘sheltering in place’. As of the week ending March 28, home-purchase loan applications made by the silent generation for 2020 were 42% less than the same week in 2019 compared with a drop of just 13% for millennial applicants.[3]
Figure 2 shows year-over-year percent change in the number of home-purchase loan applications by age cohort relative to the same month of the prior year, using loan applications through March 31. Summed across all cohorts, loan applications in March 2020 fell 5% from one-year ago. Home-purchase applications submitted by the silent generation fell the most (22%) in March compared to the same month of the prior year, followed by baby boomers (12%), and Generation Xers (12%). In contrast, applications submitted by millennials went up by 4%. As the clinical evidence suggests that older people might be at higher risk for severe illness from COVID-19, more older homebuyers appear to have delayed their decision to purchase a home compared with younger homebuyers.[4]
We will continue to monitor the performance of the housing market in light of COVID-19 using CoreLogic high-frequency and current high-frequency and current data.
[1] Pew Research Center defines generations born 1981 to 1997 as millennials, 1965 to 1980 as Generation X, 1946 to 1964 as baby boomers, and 1928 to 1945 as the silent generation.
[2] https://www.nytimes.com/article/coronavirus-timeline.html
[3] Applications for the week ending March 28, 2020 were compared with applications for the week ending March 30, 2019.
[4] https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/people-at-higher-risk.html
How will COVID-19 impact U.S. mortgage performance?
April 24, 2020 | 7:51AM CT
Molly Boesel, Principal, Economist
Trends in Home Equity by State
As the coronavirus pandemic continues to wreak havoc on the economy and claims for unemployment insurance reach record highs, homeowners are at increased risk of becoming delinquent on their mortgage loans. For those borrowers in negative equity, risk of foreclosure is even higher.
Negative equity across the nation peaked in 2009 after the 2008 financial crisis, with 26% of all mortgaged properties in negative equity. Since then, the negative equity share gradually decreased to 3.5% by the end of 2019. However, in some states (Figure 1), the negative equity share continues to be elevated, notably in Louisiana (9.8%), Connecticut (7.1%), and Illinois (7.0%). Layering job loss on top of negative equity could lead these states to see high rates of delinquency and foreclosure in the coming months, though the CARES act will alleviate some risk from delinquencies and foreclosures to borrowers through forbearance. While claims for unemployment insurance increased across the U.S. starting in mid-March, Louisiana saw claims increase by about 4,600% compared with about 1,900% for the U.S. on average[1].
If home prices were to fall, more borrowers would be at risk. In addition to the negative equity share, CoreLogic also tracks the near negative equity share, which is the share of mortgages with less than 5% equity. If home prices fall by 5%, this share will fall into negative equity. While the United States average near negative equity share at the end of 2019 was 0.8%, figures from some states were much higher (Figure 2). If home prices drop by 5%, homeowners in Connecticut (1.9%), Maryland (1.8%), New Jersey (1.5%), and Illinois (1.5%) are the most at risk.
[1] The percent increase in claims for unemployment insurance compares the average of the weeks ending March 21 through April 4, 2020 with the 2020 average through March 14.
Evictions and Foreclosures Amid the Coronavirus Crisis
April 22, 2020 | 8:12AM ET
Russell McIntyre, Senior Professional, Public Policy & Industry Relations
Kari Mezzetti and Elizabeth Greeves, Professionals, Marketing
Facing the current threat of coronavirus, one question begs to be addressed: what are the lasting financial ramifications this pandemic will leave on individuals, our nation and our world?
Millions of Americans are currently living paycheck to paycheck. With social distancing and shelter in place orders across the nation, the question of ‘how and if rent will get paid’ is on the minds of many Americans struggling to pay the bills.
Housing payments are one of the many issues our public leaders at a local, state and federal level are working to address. Cities such as San Francisco, Seattle and Boston were among the first to temporarily halt the issuance of new eviction notices. States were next to take swift action. California Governor Gavin Newsom issued an executive order to “halt evictions for renters and homeowners, slow foreclosures, and protect against utility shutoffs for Californians affected by COVID-19.” In the state of Washington, Governor Jay Inslee announced a statewide moratorium on evictions for 30 days for all residents. On a federal level, the United States Department of Housing and Urban Development announced on March 18 that it would suspend all foreclosures and evictions nationwide until the end of April.
Foreclosures & Evictions in addition to the federal moratorium
|
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State |
Title |
Bill Summary |
Effective Date |
Colorado |
Extending Executive Order D 2020 012 Limiting Evictions, Foreclosures |
Amending and Extending Executive Order D 2020 012 Limiting Evictions, Foreclosures, and Public Utility Disconnections and Expediting Unemployment Insurance Claim Processing to Provide Relief to Coloradans Affected by COVID-19. |
April 6, 2020 |
Maryland |
Evictions and Mortgages Number 20-04-03-01 |
Amending and restating the order dated March 16, 2020 temporarily prohibiting evictions of tenants suffering substantial lost of income due to COVID-19 and stop the initiation of residential mortgage foreclosures, prohibiting commercial evictions and allowing suspension of certain lending limits. |
April 3, 2020 |
Alabama |
Sixth Supplemental State of Emergency |
Covers protection against eviction and foreclosure. |
April 3, 2020 |
Florida |
Emergency Management – COVID-19 Mortgage Foreclosure and Eviction Relief Executive Order Number20-94 |
Places a moratorium on foreclosures and evictions for 45 days from the date of the executive order. |
April 2, 2020 |
Ohio |
Commercial Evictions & Foreclosures Executive Order 2020-08D |
Landlords are requested to suspend, for a term of least ninety consecutives days, rent payments for small business commercial tenants in the State of Ohio that are facing financial hardship due to the COVD-19 pandemic; and Landlords are requested to provide a moratorium of evictions of small business commercial tenants for a term of a least 90 consecutive days. |
April 1, 2020 |
Montana |
Directive Implementing Executive Orders 2-2020 and 3-2020 providing measures to limit foreclosures, evictions, and disconnections from service |
Prohibits evictions and foreclosures for the duration of the Directive. Prohibits the disconnection of utilities. |
March 30, 2020 |
Delaware |
Sixth modification of the Declaration of a State of Emergency for the State of Delaware due to a Public Health Threat |
Evictions are prohibited until the state of emergency is terminated. Foreclosures are prohibited until the state of emergency is terminated. Utility companies are prohibited from terminating service during the state of emergency. Insurers may not terminate policies because the policyholder does not pay a premium or interest on a policy that is due during the state of emergency. |
March 24, 2020 |
Kansas |
Rescinding EO 20-06 and temporarily prohibiting certain foreclosures and evictions |
Prohibits foreclosure on a residential property when the violations of the mortgage are caused by financial hardship resulting from COVID-19. Prohibits landlords from evicting a residential tenant when all defaults are substantially caused by a financial hardship from the COVID-19 pandemic. |
March 23, 2020 |
New Jersey |
Governor Murphy Enacts Moratorium on Removals of Individuals Due to Evictions or Foreclosures Executive Order No. 106
|
Any lessee, tenant, homeowner or any other person shall not be removed from a residential property as the result of an eviction or foreclosure proceeding.
2. While eviction and foreclosure proceedings may be initiated or continued during the time this Order is in effect, enforcement of all judgments for possession, warrants of removal, and writs of possession shall be stayed while this Order is in effect, unless the court determines on its own motion or motion of the parties that enforcement is necessary in the interest of justice. This Order does not affect any schedule of rent that is due. |
March 19, 2020
|
The CARES Act
Mortgage Forbearance
Section 4022 of the CARES Act establishes a borrower’s right to request forbearance on any federally backed mortgage loan due to financial hardship experienced, directly or indirectly, as a result of the COVID-19 emergency. This forbearance shall by granted for up to 180 days and shall be extended for an additional 180 days at the request of the borrower. During the forbearance period, no fees, penalties, or interest shall accrue on the borrower’s account (beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract). In order to provide the forbearance, mortgage servicers shall require no additional documentation beyond the borrower’s attestation to a financial hardship cause by the COVID-19 emergency. For more information about the mortgage forbearance program contained within the CARES Act, visit this resource from the Consumer Financial Protection Bureau (CFPB).
Evictions
Section 4024 of the CARES Act established a temporary “moratorium on eviction filings, fees, and penalties for tenants for nonpayment of rent for 120 days on properties insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or covered by the Violence Against Women Act.” For more information about the eviction moratorium contained within the CARES Act, visit this resource from the National Association of Realtors.
Based on the rapid and decisive action at all levels of public policy, it is clear that our public officials believe there will be long-term economic implications from the coronavirus outbreak. And thus, we should continue to expect additional action at the local, state and federal levels throughout the weeks and months ahead.
How will COVID-19 challenge catastrophe response?
April 20, 2020 | 5:53AM PT
Tom Larsen, Principal, Content Strategy
The Atlantic Hurricane Season begins on June 1 and early forecasts have begun. The Colorado State University forecast [1] issued on April 2, 2020 includes an estimate that “The probability of U.S. major hurricane landfall is estimated to be about 130 percent of the long-period average”. Early forecasts like this include significant uncertainty, although the forecast direction of a higher than average season is more stable. The occurrence of a natural catastrophe like a hurricane is unaffected by human afflictions like the ongoing COVID-19 pandemic. We must challenge ourselves to understand if the “new normal” of everyone sheltered-in-place will impact the operational normal of hurricane response.
The threats of extreme winds, coastal storm surge and inland and riverine flooding from hurricanes affect broad geographic areas. Hurricanes Dorian (2019), Irma (2017), Matthew (2016), Ike (2008) and Katrina (2005) all relied upon emergency evacuation orders affecting more than 1 million people. Evacuation orders from Irma affected nearly 7 million people. Even the U.S. Northeast is not immune: Hurricane Irene (2011) triggered evacuation orders for more than a quarter million people. In normal times, evacuees find accommodations with friends and relatives, at hotels or public evacuation centers. The shelter-in-place and cessation of non-essential business rules present a challenge to preparation. The absence of staff may inhibit the installation of hurricane shutters and other active protection devices and evacuations would make it impossible to maintaining social distancing rules in evacuation centers. After the immediate response, the absence of fully operating hotels and restaurants will challenge most claims and recovery activities.
While the initial forecast of the year does indicate a higher than average number of hurricanes, it’s important to remember that it’s not the occurrence of a hurricane, but the location of its landfall that is important. A higher than average number of events increases the probability that one may make landfall along a populated center, so preparation is key. We may not see a landfalling hurricane this year, but history has shown that it’s only a matter of time before one will cause significant damage and disruption. And it is not just hurricanes; Severe Convective weather produces hail, strong winds and tornadoes, and as we enter the peak of severe convection activity we are running at the 10-year average [2], NOAA [3] predicts another year of dangerous spring floods, and Northern California is in drought [4] conditions as we enter into the summer fire risk season. Just as the COVID-19 virus has caused disruption and is anticipated to persist with us for our near-term future, it is imperative to prepare for natural catastrophe events like hurricanes, tornadoes, floods, earthquakes and fires and factor in any additional challenges that may occur like those highlighted by the COVID-19 pandemic.
[1] https://tropical.colostate.edu/media/sites/111/2020/04/2020-04.pdf
[2] https://www.spc.noaa.gov/exper/archive/event.php?date=20200409
[3] https://www.noaa.gov/media-release/us-spring-outlook-forecasts-another-year-of-widespread-river-flooding
[4] https://droughtmonitor.unl.edu/CurrentMap/StateDroughtMonitor.aspx?CA
Home sales activity slows notably by the end of March
April 17, 2020 | 7:44 AM CT
Shu Chen, Sr. Professional, Economist and Selma Hepp, Executive, Research & Insights and Deputy Chief Economist
Although the housing market had come roaring into 2020, the onset of COVID-19 has led to a sharp turnaround in consumer sentiment and housing activity across the country. Similar to many other sectors of the economy, some prospective home buyers and sellers have found themselves unable to proceed with their transactions. Using the data from about 152 multiple-listing services (MLSs) across the country, the following analysis takes a look at the impact of COVID-19 on housing market activity through the end of March.
The two indicators outlined herein include the number of new home-purchase contracts signed and the number of closed home sales. As shown in Figure 1, in the first eight weeks of 2020 the number of signed home-purchase contracts had been running about 8 percent above the same period last year, while the number of closed home sales were running about 11 percent above last year.
Unfortunately, with the spread of COVID-19, contract signings and home-sale closings started rapidly declining. Figure 1 also notes two important dates for understanding the changing housing market activity – February 29th, the date of the first COVID-19 death reported in the U.S., and March 13th, the date President Trump announced a national emergency.
In the last two weeks of March, the number of new home purchase contracts signed declined 10 percent and 26 percent, respectively, compared to the same period last year. With the first two weeks of March still holding the early-year momentum, overall month of March shows a 7 percent year-over-year decline in the number of new contracts signed.
At the same time, while home buyers and sellers generally proceeded with closings in early March, settlements fell during the second half of March compared with last year. For the entire month of March 2020, total closed sales were 1.5 percent below the prior March.
As shown in Figure 1, for the week ending March 28, 2020 closings had declined 29 percent compared to the week of March 24-30, 2019. However, comparing the changes in the week ending April 4th, 2020 to week ending April 6, 2019 is not as straight forward because the former includes last business day of March – March 31st, 2020, while the latter does not. Keep in mind that a large number of closings occur on the last business day of the month – March 29, 2019 and March 31, 2020 – and those would be included in the data for the weeks ending March 30, 2019 and April 4, 2020, which maybe the reason why week-end April 4th, 2020, year-over-year decline is seemingly lesser than the week ending March 28th, 2020.
To account for the impact of the last business day on annual differences, we have instead compared the weeks of March 22-28 in both 2019 and 2020 which showed closings had declined 13 percent. For the weeks of March 29 to April 4, sales in 2020 were 20 percent lower [1].
Further, however, if the strong activity seen prior to onset of the pandemic is an indication of what housing sales would have been like, the real decline in home sales is actually larger for March. As the data shows, the number of home-purchase contracts signed in February was averaging over 10 percent higher compared to last year.
Going forward, the true impact of the pandemic on the housing markets will be clearer as more data comes in. With the number of signed home-purchase contracts declining in recent weeks, home sales are likely to follow with a similarly notable dip over the next 30 to 40 days. Also, there will likely be more cancellations of the contracts signed prior to the emergency declaration and had been scheduled to close in the month of April. Typically, the rate of contract cancellations has averaged about 4 percent[2], but the cancellation rate is likely to have risen in the latter half of March.
CoreLogic will continue to closely track the data in the coming weeks and provide an update to this analysis. Stay tuned!
[1] Data for the week ended April 4, 2020 are preliminary and subject to revision.
[2] Source: The REALTORS® Confidence Index
Frank Nothaft joins Dr. Albert Lee to discuss recent housing observations
Listen to the podcastCoreLogic Chief Economist Frank Nothaft joins Dr. Albert Lee as they discuss single family transaction volume and US regional house price trends.
March Home Purchase Applications Falling in Major Markets
April 15, 2020 | 8:52AM ET
Archana Pradhan, Principal, Economist
Home-purchase demand started strong in most urban markets in January and February of 2020, supported by a lower mortgage rate and unemployment rate than one year earlier. As the novel coronavirus spread in the U.S., we have begun to see its impact on home sales as well. To observe effects of COVID-19 on sales, we used CoreLogic Loan Application data for January through March 28, 2020 and compared the recent trend with 2019 data.
Figure 1 shows year-over-year percent change in the number of home-purchase loan applications for major markets, relative to the same month of the prior year.[1] Home-purchase demand in the Philadelphia area dropped by 31% in March compared to the same month of the prior year, followed by Los Angeles (29%), and New York (24%). In another hard-hit area, Seattle purchase applications dropped by 15%. The chart shows that purchase applications had been running higher in January and February, relative to the same month of the prior year.
Figure 2 shows week-over-week percent change in the number of home-purchase loan applications for the weeks ending March 21, 2020 and March 28, 2020, relative to the prior week.
Home-purchase applications in the Los Angeles metro area had the biggest drop (14%) in the week ending March 21, followed by Miami (12%) and New York (8%). For the week ending March 28, Miami had the biggest drop in purchase applications (31%), followed by Seattle (16%), Atlanta (15%), and Chicago (15%). Though, week-over-week purchase applications were falling in the last two weeks of March in Dallas area, overall purchase applications for this March was still higher than the last March.
We will continue to monitor the performance of the housing market in light of COVID-19 using CoreLogic high-frequency and current high-frequency and current data.
[1] Market areas were defined as Core-Based Statistical Areas (CBSA)
How Will COVID-19 Impact U.S. Home Sales Activity?
April 13, 2020 | 8:02AM ET
Shu Chen, Sr. Professional, Economist
Trends in new listings reported in Multiple Listing Services
To observe effects of COVID-19 on home sales activity, we used CoreLogic Multiple Listing Service data from 288 Core-based Statistical Areas through March 28, 2020 and compared the recent trend with 2019 data.[1] The chart shows year-over-year percent change of the number of new listings, relative to the same week of the prior year. Two dates are highlighted in the chart: February 29 recorded the first death in the U.S. from COVID-19 and announcement of travel restrictions to Italy and South Korea; on March 13 President Trump declared a national emergency.[2]
Increases in new listing picked up after 2020 began and reached a peak of 10.7% above year-ago levels in the first full week of March. The increase in new listings early in 2020 was supported by a mortgage rate and an unemployment rate that were much lower than one year earlier. Activity slowed starting at the end of February showing large decreases compared with the same period in 2019. As of the week ending March 28, new listings for 2020 were 30.1% less than the same week one year ago (week ending March 30, 2019).
We will continue to monitor the performance of the housing market in light of COVID-19 using multiple listing service and other data.
[1] Core-Based Statistical Areas are metropolitan and micropolitan areas defined by the Office of Management and Budget.
[2] https://www.nytimes.com/article/coronavirus-timeline.html
Q&A: What to Expect from the Mortgage Loan Application Process in COVID-19
April 10, 2020 | 7:18AM CT
Maiclaire Bolton Smith, Senior Leader of Research and Content Strategy at CoreLogic, sits down with CoreLogic Executive of Public Policy and Industry Relations Pete Carroll to discuss the mortgage loan application process during COVID-19.
Maiclaire: My name is Maiclaire Bolton Smith and I am the Senior Leader of Research and Content Strategy with CoreLogic. Today, I’m joined by Pete Carroll, Executive of Public Policy and Industry Relations at CoreLogic and formerly a senior executive at the Consumer Financial Protection Bureau. Today we’ll discuss potential impacts posed by the COVID-19 global pandemic on the housing and mortgage markets. Pete, thank you for joining me today.
Pete: I’m happy to be here.
Maiclaire: We’ve heard from our economists over the past two weeks about some impacts on the housing market, but today, we’ll dive a little deeper into someone looking to purchase or refinance their home. So, to start -- have home buyers ever experienced a housing market like this one before?
Pete: Never. More than 30 states have issued “Shelter in Place” orders during this state of emergency, allowing people to leave their homes only for important needs like groceries and medicine. The remaining states are essentially recommending the same. While for the most part there are exceptions for businesses engaged in “essential activities,” the default setting is still, and very wisely, to work from home and maintain prudent social distancing protocols to the maximum extent possible.
Meanwhile, COVID-19 is wreaking havoc on the broader economy. On the one hand, mortgage interest rates are at record low, and are fueling a refinance boom, which helps. On the other hand, the unemployment picture is looking increasingly grim and is expected to dampen new home sales during this spring’s peak home buying season. Finally, the recent COVID-19 stimulus bill (known as the CARES Act) has provided consumers facing financial hardship due to the COVID-19 virus with critical relief – for example, six months or more of forbearance (i.e. temporary suspension) in the homeowner’s monthly mortgage principal and interest payments, without any penalties, fees or additional interest.
All of this adds up to unprecedented disruption for mortgage lenders who wish to continue serving their customers, while navigating these very challenging circumstances.
Maiclaire: If we look specifically at consumers seeking to finance the purchase of a home or refinance their mortgage -- what does this mean for them?
Pete: In general, it means consumers will experience, by necessity, a more digital, standardized, and automated mortgage experience than would otherwise have been the case. The consumer will also need to be patient with their lenders who are working through extraordinary backlogs of loan applications and other requests with limited staff available.
Maiclaire: What will this mortgage process look like? Will it differ from the normal process?
Pete: Well first, consumers can expect more of a “do-it-yourself” experience. Lenders have recently invested in digital mortgage lending platforms that permit the consumer to electronically complete their loan application, submit their financial information from third-parties, such as their checking account and direct deposit information from their bank, and sign and submit documents. This is not new. But with fewer and fewer call center staff available to answer calls and mortgage bank branches temporarily closed, these digital platforms will be the primary channel for consumers applying for a mortgage loan.
Maiclaire: But what about the rest of the process? Will consumers still need to physically attend their loan closing to sign those large stacks of paper?
Pete: That is possible, yes. However, it’s also possible that both consumers and lender staff will, broadly across the industry, be able to complete the end-to-end mortgage process online and at scale for really the first time in our industry’s history. This is the result of temporary, but important changes made by the largest mortgage investors: Fannie Mae, Freddie, Mac, and HUD (including the FHA and Ginnie Mae loan programs). These changes are designed to keep the mortgage supply chain flowing smoothly, while at the same time employing crucial social distancing protocols. They include modifications to underwriting guidance, making it easier to verify borrower employment, income, and assets electronically. They have also modified their appraisal policy so that appraisers need not enter the home. Remember, appraisals are the process through which a lender determines the condition and value of a borrower’s home via an independent third-party appraiser. Finally, they have clarified their policies, which further permit consumers, lenders, and settlement agents to close the mortgage electronically, where permitted by state law.
These changes should have the effect of streamlining the mortgage process, allowing lenders to serve more homeowners seeking to take advantage of historically low rates, while serving distressed homeowners during this very difficult period.
Maiclaire: Thank you, Pete. And thank you for listening. Please check back to this site – corelogic.com/covid19 for ongoing insights from CoreLogic on the COVID-19 pandemic and its impact on the U.S. housing economy.
Q&A: COVID-19 Economic Analysis on the Housing Market
April 8, 2020 | 7:37AM CT
Maiclaire Bolton Smith, Senior Leader of Research and Content Strategy at CoreLogic, sits down with CoreLogic Deputy Chief Economist Selma Hepp to discuss initial economic analysis on the housing market due to COVID-19.
Maiclaire: My name is Maiclaire Bolton Smith and I am the Senior Leader of Research and Content Strategy with CoreLogic. Today, I’m joined by the CoreLogic Deputy Chief Economist, Selma Hepp, to discuss the housing market, looking at potential impacts posed by the COVID-19 global pandemic. Selma, thank you for joining me today. We heard some initial insights on the housing market from Dr. Nothaft last week, but can you comment further? How has COVID-19 impacted the housing market - are prices going up, down or staying the same?
Selma: Hi Maiclaire. Thank you so much for having me. While we will know with more data over the coming weeks how the housing market has been impacted, shelter-in-place calls across the country coupled with general consumer concern led to an abrupt slowdown in home buyer activity. And while the impact on home prices may be less evident at the moment, the traffic activity from home buyers has come to a full stop in some hot spots, such as Los Angeles and New York. Nevertheless, very limited for-sale inventory and a recent decline in available new listings will continue to prop up home prices. Further, demand resulting from exceptionally favorable mortgage rates coupled with the pent-up demand that was seen leading up to the pandemic suggests price growth will likely return to its steady path once buyers return and economic activity resumes.
Maiclaire: Do you anticipate that we might see fewer homes on the market?
Selma: As the data on CoreLogic COVID-19 response page suggests, there has been a pullback in new listings starting in late February. This trend will also likely continue until home sellers feel it is safe to open their homes to others. Note, too, that prior to the crisis, we saw an increase in new listings compared to last year, averaging about 7% in the first 45 days of 2020. This suggests that there may be more opportunities for home buyers in the future.
Maiclaire: Along with that, do you expect we will see fewer home buyers as a result of the economic slowdown?
Selma: Some potential home buyers will certainly be impacted by the economic fallout. And while the majority of workers who are being hit hard by the abrupt shutdown of economic activities are generally hourly workers who would not necessarily be in the market to buy a home, unfortunately the impact has been spreading to salaried workers as well. And, as with many economic activities, it will all depend on how soon the pandemic can be contained. It seems that the potential home buyers who were working in the industries that were most affected will most likely put off the home buying decision. Also, the sharp decline in stock market values will have a negative wealth effect on the higher-earning population. But then again, the strong demand from millennials who are reaching their prime home-buying age will remain, and they will likely stay in the market.
Maiclaire: During the last recession we saw significantly more home foreclosures. There are speculations that the COVID-19 pandemic may send us into a recession. So with this in mind, do we expect more foreclosures in the second quarter of 2020?
Selma: Well fortunately, and unlike following the 2008 market collapse, the HUD and GSEs have already rolled out forbearance programs for their mortgages and implemented foreclosure and eviction moratoriums. Together, they cover about 70% of the home mortgage market. In addition, some banks are following along the same lines. The programs do allow people who have suffered a loss of income to qualify for reduced payments or are granted a pause in payments. While these programs should help keep a lid on foreclosure rates, implementation of these programs and consumer awareness of the proper protocol will be crucial.
Maiclaire: And what about existing homeowners? How will the COVID-19 pandemic impact existing homeowners in the near-term?
Selma: Yes. Well, with the mortgage rates trending even lower, some existing homeowners will have an opportunity to refinance their mortgages and lower their monthly payments. According to CoreLogic data, 50% of outstanding debt has an interest rate of more than 4%, and 24% has an interest rate greater than 4.5%. And then, while refinancing is not free, there will be a potential for many homeowners to save on their mortgage payments.
Maiclaire: And finally, what about loss of equity? Is it expected that existing homeowners will lose equity on their properties?
Selma: Great question Maiclaire. Loss of equity will depend on what happens to home prices. As mentioned earlier, widespread home price declines are not anticipated given the tight supply of homes for sale across most major metropolitan areas. There are some areas more vulnerable to price declines depending on what is the primary driver of the local economy. Nevertheless, in most states, the share of homeowners with negative equity is less than 5% today. According to the latest CoreLogic Homeowner Equity Report, only 3.5% of all mortgaged residential properties had negative equity – that is about 20 percentage points lower than the peak negative equity share of 26% that was recorded in Q4 2009. And then lastly, an average family with a mortgage had a total of $177,000 in home equity as of the end of 2019.
Maiclaire: Thank you, Selma and thank you for listening. Please check back to this site – corelogic.com/covid19 for ongoing insights from CoreLogic on the COVID-19 pandemic and its impact on the U.S. housing economy.
What is the Impact of a Recession on the Housing Market?
Originally posted on April 1, 2020 | 4:52PM ET
Bin He, Sr. Leader, Science & Analytics
There is a widespread expectation that the U.S. as well as the whole world have entered or will be in recession amid the coronavirus pandemic. Goldman Sachs and JPMorgan forecast a more than 20% US GDP contraction for next quarter[1]. The International Monetary Fund declared a global recession[2] . In this blog, the impact of the past five recessions on regional housing markets is examined and sheds some light on what may occur during this coming recession.
Business Interruption Insurance: Does COVID-19 Qualify?
April 1, 2020 | 6:21AM PT
Tom Larsen, Principal, Industry Solutions
As our society addresses the effects of the COVID-19 pandemic with quarantines, shelter-in-place rules and business disruptions, a rational next step is to look for sources of funds to cover the expenses and revenue shortfalls that businesses may have.
Business interruption insurance is designed to cover a loss of income incurred by an organization due to a slowdown or suspension of operations at its premises. Business interruption insurance endorsements may also include extra expenses needed to operate and contingent business interruption where a location is impaired due to damage.
In general, commercial property insurance policies are not triggered unless there is physical damage at an insured location, and it is not clearly established that the COVID-19 pandemic represents physical damage to properties. A communication of the American Property Casualty Insurance Association (APCIA) notes, “Many standard event cancellation, business interruption, and travel insurance policies do not include coverage for communicable diseases such as COVID-19. Although, some businesses have purchased broader protections through specialized coverage.” If the interpretation of current policy wordings remains consistent, then most businesses do not have insurance coverage for the impacts of COVID-19.
MARCH
COVID-19 Trends in Refinancing
March 30, 2020 | 8:36AM ET
Molly Boesel, Principal, Economist
According to the Freddie Mac Primary Mortgage Market Survey, the four-week moving average on the 30-year mortgage was 3.45% through March 26, 2020. With the trend of declining interest rates that began in early 2020, CoreLogic is able to monitor the share of consumer held mortgage debt that may be able to refinance and potentially save on the mortgage payments. CoreLogic tracks the current interest rates on outstanding mortgages in TrueStandings Servicing, a servicer-contributed database.
The accompanying chart shows the cumulative share of outstanding debt by its interest rate for mortgages with 30-year terms. As the chart suggests, 50% of outstanding debt has an interest rate of more than 4%, while 24% has an interest rate greater than 4.5%. Those shares equate to about $2.5 trillion to $5.3 trillion in outstanding debt that would likely be “in the money” to refinance.
Because a refinance isn’t free, borrowers that want to save money on their payments would need to have mortgage loans with rates above the currently offered mortgage rates. However, depending on other closing/refinance costs, there is still a significant portion of the outstanding debt well above the rate where borrowers would be “in the money” to refinance. Mortgage industry processing capacity has contracted and could extend the duration of a refinance wave if mortgage rates remain low.
How will COVID-19 impact U.S. mortgage demand?
March 27, 2020 | 7:24AM ET
Frank Nothaft, Chief Economist
To observe effects of COVID-19 on mortgage demand, we used CoreLogic Loan Application data through March 13, 2020 and compared the recent trend with the 2019 and 2018 trends. The charts show a two-week moving average of the number of home-loan applications, relative to the first two weeks of January for each year (that is, we create an index of application volume, with the first two weeks of January set equal to 100). Data for 2019 and 2018 were similar and were averaged together.
Figure 1 shows home-purchase loan applications and Figure 2 shows refinance applications. Two dates are highlighted on each chart: February 29 recorded the first death in the U.S. from COVID-19 and announcement of travel restrictions to Italy and South Korea; on March 13 President Trump declared a national emergency.[1]
For home-purchase applications, the volume of activity picked up significantly after 2020 began, and during the first two months of the year was 3% above the same period in 2019. Activity slowed during the first two weeks of March and was running below the pace in 2019. Through March 13, purchase applications for 2020 year-to-date totaled about the same as during the same period in 2019.
Refinance applications rose this year as mortgage rates fell. Volume soared as interest rates on fixed-rate loans reached new lows in early March. During the first two weeks of March, applications were about double the level at the beginning of January and were more than four times the volume during the first two weeks of March 2019.
We will continue to monitor the performance of the housing market in light of COVID-19 using high-frequency and current data.
Q&A: Housing Market Performance in Wake of Coronavirus Pandemic
Listen to the Full InterviewMarch 25, 2020 | 9:25AM ET
Maiclaire Bolton Smith, Senior Leader of Research and Content Strategy at CoreLogic sits down with CoreLogic Chief Economist Frank Nothaft to discuss some initial insights into the impact of this global pandemic on the U.S. housing economy.
Maiclaire: My name is Maiclaire Bolton Smith, and I am the senior leader of Research and Content Strategy with CoreLogic. Today I am joined by CoreLogic Chief Economist Dr. Frank Nothaft to discuss some initial insights into the impact of the COVID-19 global pandemic on the U.S. Housing Economy. Dr. Nothaft, things are changing so quickly. I know it’s difficult to say, but are there any early indicators that show a shift in the housing and mortgage market?
Frank: Yes there are. While March month-end data will be more telling, data for the week ending March 20th suggests that home-purchase mortgage applications, availability of homes for sale, and the number of home-purchase contracts signed are all showing weakness due to COVID-19, particularly given that this is typically the ramp up to the spring home-buying season. Rental applications among prospective tenants also appear to have dipped as many households are required to ‘shelter in place’.
Maiclaire: The Federal Reserve has announced aggressive steps to keep interest rates low and pump liquidity into financial markets, and the Congress has taken steps to implement a fiscal stimulus package that targets those workers and industries that have been economically impacted. Can you comment on how this could impact the residential housing market?
Frank: With shelter being one of the top basic needs for human life, the government has opened up its full arsenal of tools to ensure that people remain in their homes and the housing sector remains posed for a bounce back. Also, banks and landlords are increasingly willing to prioritize the welfare of their borrowers and renters to help them weather this storm by providing short-term relief from debt payments.
And while in the short term the housing market will see slowdown in activity, ensuring that people remain in their homes will enable our economy to recover faster once this pandemic is under control. What is critical in this moment is that the response is speedy, robust and well-crafted.
Maiclaire: As a result of COVID-19, how do you see the home sales and rental industries changing?
Frank: Early signs suggest that the pandemic may be a catalyst for widespread shift towards digital interaction, such as virtual open houses and tours, digital appraisals, use of geospatial and artificial intelligence data and technology in ensuring people are able to find, buy and protect their homes.
In the rental space, we may see tenants more likely to renew leases rather than search for a new rental during the next several weeks. Once the U.S. has made it through the pandemic, we may see renters more often opt for larger rental space and single-family over multifamily apartments. For some tenants, this could meet a desire for a home-based office and for greater distance between housing units.
Maiclaire: In the past year we have seen interest rates drop significantly, and this has helped increase mortgage and refinance rates across the country. Do you expect this to continue in this pandemic climate, or is there anything to suggest either interest rates could increase or mortgage and refis could drop?
Frank: The impacts of the pandemic on the economy are evolving very quickly and in ways previously unforeseen. Interest rates will likely follow this unpredictable pattern in the short term. The Federal Reserve’s announcement that it will purchase more than $200 billion in mortgage-backed securities should help stabilize the mortgage market and nudge mortgage rates lower. Our TrueStandings data shows that the median interest rate on home mortgages outstanding is 4%; thus there should be ample opportunities for homeowners to refinance their mortgages if the interest rates remain low.
Maiclaire: And one final question: are there any regional impacts that we could see from the Shelter in Place ordinances showing up in local housing data?
Frank: We do expect to see more notable slowing in housing activity in areas that have been ordered to ‘Shelter in Place’ and where local economies depend on tourism and business conferences. Many agents in these areas have cancelled open houses, and some current owners have delayed listing their homes for sale. Our Housing Analysis tab will provide more insights into the impacts on local housing activity in coming days and weeks.
Maiclaire: Thank you Dr. Nothaft. And thank you for listening—please check back to this site, corelogic.com/covid19 for ongoing insights from CoreLogic on the COVID-19 pandemic and the impact on the U.S. housing economy.
HousingWire:
Look for housing to rescue the economy, Nothaft says
The housing industry got a bad reputation the last time the American economy tanked. Not the houses themselves – most of them are still in place, perhaps painted a time or two since 2008, now being used to home-school children and provide families with shelter from the worst pandemic in more than a century. It was, specifically, a risky sub-sector of home financing – subprime loans – that got packaged into bonds, stamped with Triple-A ratings and sold at huge profits to investors including pension funds and Wall Street banks. When banks started failing, it pushed the nation’s financial system to the brink.
CoreLogic Analysis in the News
The Wall Street Journal: Pending Home Sales Plunge, but Housing Market Shows Signs of Recovery
Read ArticleReal-estate brokers, economists and some home buyers are looking beyond the pandemic-driven slump in home sales and seizing on signs that the housing market is strengthening.
Most of the numbers for April looked dire. Pending home sales for the month fell nearly 34% from a year earlier, the biggest annual decline on record, the National Association of Realtors said on Thursday.
Rising unemployment and widespread shelter-in-place rules that hindered in-person showings and contract signings caused activity to plummet, economist and real-estate agents said. The number of homes for sale remains low in many markets, and sellers remain cautious about strangers touring their homes.
Business Insider: Rent growth slumps to the lowest since 2010 as the coronavirus pandemic slams demand
Read ArticleThe uncertainty of the coronavirus pandemic is weighing on rent prices, pushing growth to a decade low.
Single-family rents grew only 1.7% annually in May according to a Tuesday report from CoreLogic. The growth rate is a stong deceleration from the 2.4% that rents grew in April, according to the report, and is the lowest growth rate since July 2010, measured by CoreLogic's Single-Family Rent Index.
"Despite local economies beginning to open back up in May, rental demand continued to be impacted by unprecedented unemployment rates and stay-at-home directives, which contributed to the slowing in rent prices," Molly Boesel, principal economist for CoreLogic, wrote in the report.
Yahoo Finance: Borrowers added over $6T in home equity since 2010: CoreLogic
Watch VideoCoreLogic Principal Economist Molly Boesel joins Yahoo Finance’s Akiko Fujita to discuss how the coronavirus is impacting the housing market.
CNBC: Home prices in April saw biggest gain in 2 years, but they’re expected to drop by next year
Read ArticleHome sales may have slowed to a trickle, as much of the national economy shut down in the face of the coronavirus pandemic, but home prices did just the opposite.
Nationally, values rose 5.4% annually in April, a sharp increase from the 4.5% annual increase in March, according to CoreLogic. The gain in prices was driven by a record drop in the supply of homes for sale. Not only did some sellers pull their listings in April, but most of those who planned to list decided to wait.
Fortune: Where are housing prices heading? Gain, then pain
Read ArticleIn his 17 years as a Seattle real estate broker, Sam Mansour had never witnessed a marvel to match the shopping frenzy that took flight in the first days of reopening. “We were shut down by shelter-in-place orders in early March,” recalls Mansour. “When we returned to work, we saw a surge in buyers that continues, with no end in sight. Many customers have condos in the city, but now both husband and wife are working at home, so to get more space and enjoy a backyard, they’re buying second homes. On top of that, we have young renters who are rushing to buy because rates are so low.

Frank Nothaft
Executive, Chief Economist, Office of the Chief Economist
Frank Nothaft holds the title executive, chief economist for CoreLogic. He leads the Office of the Chief Economist and is responsible for analysis, commentary and forecasting trends in global real estate, insurance and mortgage markets.
Before joining CoreLogic Frank served in a variety of leadership positions with increasing responsibility at Freddie Mac. Most recently, he was vice president and chief economist responsible for forecasts, research and analysis of the macro economy, housing and mortgage markets. Prior to Freddie Mac, Frank was an economist with the Board of Governors of the Federal Reserve System, where he served in the mortgage and consumer finance section and as assistant to Governor Henry C. Wallich.

Molly Boesel
Principal, Economist, Office of the Chief Economist
Molly Boesel holds the title principal, economist for CoreLogic in the Office of the Chief Economist and is responsible for analyzing and forecasting housing and mortgage market trends.
She has more than 20 years of experience of expertise in mortgage market analysis, model development and risk analysis in the housing finance industry. Molly previously worked at both Fannie Mae and Freddie Mac. While at Fannie Mae she provided Fannie Mae’s official monthly forecast for the economy, housing market, and mortgage market stocks and flows, and provided analyses on trends in the mortgage market, including characteristics of borrowers, homeowners, and mortgage products.

Tom Larsen
Principal, Content Strategy, Insurance Solutions
Tom Larsen is a content strategy principal for CoreLogic Insurance and Spatial Solutions. In this role, Tom is responsible for subject matter expertise and thought leadership focused around driving revenue growth and profitability goals via the identification of new solution areas and continuous white space capture.
Tom joined the CoreLogic team in 2013 with the acquisition of EQECAT, Inc., a catastrophe risk management organization where he held the title of Senior Vice President and Chief Product Architect. Tom has experience in natural catastrophe modeling for the insurance and reinsurance industries, and government dating back to 1989. He has written articles for numerous trade publications, participated on various industry panels; as well undertaken speaking engagements on the topic of the financial impacts of natural catastrophes.
Tom earned a Masters of Engineering in Structural Mechanics from the University of California, Berkeley, and a B.S. in Civil Engineering from Stanford University.

Selma Hepp
Executive, Research & Insights and Deputy Chief Economist, Office of the Chief Economist
Selma Hepp holds the title executive, research & insights and deputy chief economist for CoreLogic. She is responsible for analyzing, interpreting and forecasting economic trends in real estate, mortgage and insurance.
Prior to joining CoreLogic, Hepp was chief economist and vice president of Business Intelligence for Pacific Union International, Inc. Hepp joined Pacific Union in 2016 to oversee the vital economic and technology intelligence to drive the expanding brokerage’s success. Additionally, she authored Pacific Union’s Economic Straight Talk columns, a series of reports that analyze current economic trends to clarify real estate investing. Hepp was previously chief economist for Trulia, senior economist for the California Association of Realtors, and economist for the National Association of Realtors.
She earned her Master of Arts in Economics from the State University of New York, Buffalo and a Ph.D. from the University of Maryland.

Stuart Pratt
Executive, Global Head of Public Policy & Industry Relations
Stuart Pratt leads the company’s public policy and business unit engagements with US and foreign governments. He also oversees the company’s liaison and research programs with think tanks, consumer groups, and trade associations. Reporting to the CEO, Pratt advises him on enterprise-wide reputational, policy and risk issues. As a member of the company’s Executive Committee he contributes to the company’s design and execution of its strategic and annual business plans. Previously Pratt served as president and CEO of the Consumer Data Industry Association (CDIA). He currently serves on the Board of Directors of the Housing Policy Council and the CDIA.

Pete Carroll
Executive, Public Policy & Industry Relations
Pete Carroll is executive, Public Policy& Industry Relations with CoreLogic. In this role, Pete directly oversees industry and public-sector engagement programs, drives enterprise strategic initiatives for CoreLogic, and expands opportunities for the company’s thought leadership, insights, brand awareness, and solutions expertise within Washington, DC and across the Federal Housing Agencies and other stakeholders.
Prior to joining CoreLogic, Carroll was executive vice president of Quicken Loans where he led the development and discussion of Quicken’s positions on a broad spectrum of policy issues. Earlier, he was senior vice president, Capital Markets, at Wells Fargo and was the assistant director, Office of Mortgage Markets, at the Consumer Financial Protection Bureau (CFPB).
He holds a bachelor’s degree in international relations from Connecticut College. Currently, he serves on the Mortgage Bankers Association’s (MBA) Mortgage Industry Standards Maintenance Organization (MISMO).

Maiclaire Bolton Smith
Senior Leader, Research & Content Strategy
Maiclaire Bolton Smith is a seismologist and holds the title of Senior Leader, Research & Content Strategy for CoreLogic.
Prior to her time at CoreLogic, Maiclaire held previous positions at RMS, Emergency Management British Columbia, the International Seismological Centre and the Geological Survey of Canada. Maiclaire joined CoreLogic in March of 2013 and leads Thought Leadership for the Insurance and Spatial Solutions division of CoreLogic. She also leads the team specializing in catastrophic event response, providing timely and key insights to the market about the impact of natural disasters on the housing economy.
Maiclaire earned a M.S. in Geophysics, specializing in earthquake seismology from the University of Victoria, and a B.S. in Geophysics from Western University. Maiclaire is based in Oakland, Calif.

Shu Chen
Sr. Professional, Economist, Office of the Chief Economist
Shu Chen holds the title senior professional, economist for the CoreLogic information solutions group. In this role, she is part of the Office of the Chief Economist working with senior economists to provide insights for the Home Price Index, Single-Family Rent Index and she regularly performs analysis of the home value equity report.
About CoreLogic
CoreLogic (NYSE: CLGX), the leading provider of property insights and solutions, promotes a healthy housing market and thriving communities. Through its enhanced property data solutions, services and technologies, CoreLogic enables real estate professionals, financial institutions, insurance carriers, government agencies and other housing market participants to help millions of people find, acquire and protect their homes.
Practical Solutions for Real Estate Services
The past several weeks have been a period of unprecedented uncertainty for you, your families, our industry, our nation and the entire world. The COVID-19 outbreak has left no corner of our immediate and wider world untouched. Day by day, we are facing and adjusting to new facts and circumstances.
Uncertainty and change will be with us for some time. While some economic impacts are clear, more are coming to light each day as new data is revealed. As a result of this pandemic, the ways we work and collaborate force us to be creative in how we service our clients, accelerating virtual and automated processes across the business landscape. Whether you are a bank, lender, insurer, agent or anything in between, our goal is to enable you to continue to support you so that in turn you can continue to support your clients.

Digital Homebuying
Solutions
With open houses cancelled and buyers staying home, social distancing has created unique challenges for the real estate industry. Real estate agents need a way to show homes and maintain business while keeping buyers, sellers and themselves safe.
How do real estate professionals enable people to find and buy their homes during this time?

Automated Loan
Modifications
Consumers are struggling to manage their finances in the current economic uncertainty. As a result, many lenders are overwhelmed with requests for forbearances and loan modifications.
How do you improve the speed and consistency of your mod decisioning and fulfillment while staying compliant?

Appraisal Management and Collateral Underwriting
To help consumers and appraisers maintain effective social distancing, Fannie, Freddie, FHA and VA have temporarily relaxed their requirements – in most cases, allowing an appraisal without an interior inspection of the home.
Does your Appraisal Management platform have automated underwriting tools that can meet these changes today? Ours does.
Insurance, Real Estate and Rental Solutions

Virtual Adjusting
Solutions
As orders for shelter-in-place increase, more than ever families need the support of insurers to protect and restore their homes. Social distancing measures, however, are creating challenges in handling claims.
How do you virtually adjust claims efficiently while decreasing overall adjusting costs?

Virtual and DIY
Property Surveys
Social distancing is creating problems for homeowners to get comprehensive property risk assessments and physical inspections have become more challenging for carriers to execute.
How do you efficiently improve risk selection and optimize budget while limiting in-person interaction?
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Digital Leasing
Solutions
As more and more leasing offices have closed their doors temporarily to follow social distancing guidelines, prospective applicants need a workflow to submit their rental applications while limiting in-person exposure.
How do property managers seamlessly transition from paper applications to digital leasing?

Crime Risk
Reports
As businesses remain closed and unemployment grows, the COVID-19 crisis has led to an uptick in commercial property-related crimes--and it will only get worse.
How do you unlock which U.S. properties, assets and service employees are at crime risk? Try your first report for free.
Mortgage Solutions

Flexible Employment Verifications
As more consumers are working from home, verifying an applicant’s employment has become difficult. The GSEs now allow you to reverify employment via email, YTD paystub, or bank statement.
Is your verification workflow flexible enough to do this? Ours is – and we can help you today.

Market Risk
Indicators
Homeowners face significant economic uncertainty. If large numbers are unable to pay their mortgages, regional home prices will suffer. In order to accurately evaluate your risk, you need to know which metro areas are at risk, and which ones are not.
Are you able to predict local housing market risk levels? We can help.

Mortgage Performance
Solutions
Unemployment and pressing financial hardships are impacting homeowners across the globe. As a result, the mortgage market is bracing for an avalanche of payment delinquencies, forbearance activities and servicer advancing.
How are you becoming informed about your risk exposure?

Portfolio Insights &
Monitoring
Uncertainty has caused heightened consumer concern about the state of the economy. Many indicators are pointing to a forthcoming recession, and gaining visibility into risks, emerging opportunities, current valuations, and actionable insights is critical.
Are you looking at your portfolio from every angle?

Homeowner Assisted
Valuations
Between shelter-in-place and social distancing orders – lenders, appraisers and homeowners scramble for ways to complete inspections. This jeopardizes appraiser livelihood and the entire real estate transaction process.
How can appraisers conditionally decline onsite inspections under COVID-19 guidelines?