First signs of disruption appear in housing; markets ‘calm’
The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed as it continues to spread across the world. Here is a look at some of the latest developments Wednesday related to the global economy, particular economic sectors, and the workplace:
Economists have been waiting for the first signs of virus-related disruptions in housing with the expectation that they will be seismic. Federal housing data looks further back for trends, meaning there is a lag in real world activity. But details have begun to emerge in private surveys.
On Wednesday, the Mortgage Bankers Association reported that mortgage applications plunged 29.4 percent last week. People trying to sell homes have cancelled showings during the outbreak and because closings are done in person, economists expect sales will decline sharply. But the virus has affected the market in other, unforeseen ways as well.
Despite additional cuts to benchmark interest rates by the U.S. Federal Reserve, mortgage rates have actually been rising.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said that’s partially because lenders amid the outbreak are wrestling with capacity issues, backlogs in the pipeline, and the challenge of working remotely in real estate.