This was the first week in several months where it was more difficult to find negative impacts on the economy and housing market than it was to find signs optimism. And yet, even as the economy begins to heal, it is important to temper that hope with the difficult truth: even if the economy continues to gradually reopen and the leading indicators continue to improve, the toll of the COVID-19 pandemic have been unprecedented and it will take time for us t
o recover. This is particularly true in a world where the new normal will likely look significantly different that our previous definition. On top of that, we will face both ongoing restrictions and a big learning curve on how to operate in a pre-vaccine world.
Consumer confidence finds bottom: After suffering from its worst decline in April in nearly 50 years, the Conference Board’s Consumer Confidence Index ticked up slightly in May. The index remains below 100 indicating that consumers are still pessimistic, but it is a slightly lower level of pessimism than in April. This supports the conclusion from a variety of other indicators that the economy and market found a bottom in mid-April and has begun to stabilize after roughly 2.5 months of sheltering in place.
Mortgage applications regain lost ground: Homebuyer demand is beginning to show signs of life as well as the U.S. recorded its 6th consecutive increase in new purchase-money applications. That brings the number of mortgage applications back above the pre-crisis levels of late February. .... California saw its 7th consecutive weekly gain in mortgage applications as well, though it also saw a bigger contraction in the immediate aftermath of the downturn, so it remains roughly 2% below 2019 levels.
Buyer demand coming back with more showings: Buyer demand is also expressing itself in the form of increased showings. Last week, the 7-day moving average of showings posted a 38% increase, which brought the index back to pre-outbreak levels. And although last week’s levels were still roughly 4% below 2019 levels, home showings have improved dramatically from mid-April when showings were falling by nearly 75% on a weekly basis and were well below 2019 levels.
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