The CARES Act signed into law on March 27 in response to the economic fallout from our nation's efforts to curb the spread of COVID-19 has several provisions to help consumers suffering financial strain. Consumer relief measures include the ability to request mortgage payment forbearance and temporary freezes for student loan payments, certain evictions and foreclosures. Consumers can begin the assistance process by contacting their loan servicers and landlords.
Mortgage interest rates trended downward for the first time in three weeks according to Freddie Mac's Primary Mortgage Market Survey (PMMS) for the week ending March 26. The PMMS attributed the drop to "the Federal Reserve's swift and significant efforts to stabilize the market." Freddie's analysts noted, "the combination of the Fed's actions and pending economic stimulus will provide substantial support to the mortgage markets."
Pending home sales were up 2.4% from January to February, and 9.4% year-over-year according to the National Association of Realtors® (NAR). As for what's next, NAR Chief Economist Lawrence Yun said, "Numbers in the coming weeks will show just how hard the housing market was hit, but I am optimistic that the upcoming stimulus package will lessen the economic damage and we may get a V-shaped robust recovery later in the year."
Economist Elliot Eisenberg, PhD spotted a spike in homeowners seeking cash amid economic uncertainty. Eisenberg says that outstanding home equity loans rose $2.3 billion to $317.2 billion for the week ending 3/18/20. Outside of an increase during the last government closure, this was the first increase in home equity loans since the week ending 2/1/12, when they rose $4.7 billion to $553 billion.
Sources: Coronavirus Aid, Relief and Economic Security Act, Freddie Mac, National Association of Realtors®, Elliot Eisenberg, PhDShare:
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