Fannie: Consumer confidence in housing fell to lowest since 2011

In April, Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased 17.8 points month-over-month, falling to 63.0, its lowest level since November 2011. Year over year, the HPSI is down 25.3 points.

After falling 11.7 points in March, the decline was steeper and across five of the six HPSI components, reflecting consumers “pessimistic view of homebuying and home selling conditions.”

High unemployment rates and household incomeconcerns are contributing to that sentiment, as 21% of the survey participants said their household income is significantly lower, up from 11% in March. The net share of those who said their household income is significantly higher than 12 months ago fell 17 percentage points.

The decrease shows “consumers’ deepening concerns about both their incomes and the housing market,” said Doug Duncan, Fannie Mae’s Senior Vice President and Chief Economist. “Individuals’ heightened uncertainty about job security, as registered in the survey over the last two months, is likely weighing on prospective homebuyers, who may be more wary of the substantial, long-term financial commitment of a mortgage.”

Attitudes about whether it is a good time to sell dropped an additional 23 points in April. The percentage of Americans who think it is a good time to buy a home decreased from 56% to 48%. Similarly, only 29% saidit is a good time to sell a home, down from 52% in March.

“While consumers did grow more pessimistic in April about whether it’s a good time to buy a home, low mortgage rates remain a driver of purchase optimism,” added Duncan. “We expect that the much steeper decline in selling sentiment relative to buying sentiment will soften downward pressure on home prices.”

Expectations to see home prices go up in the next 12 months fell from 39% in March to 23% in April. The net share of Americans who say home prices will go up decreased 28 percentage points, marking “the lowest expected growth rate in survey history,” according to Duncan.

CPC Mortgage deploys Unqork, KPMG Mortgage Forbearance Application

The Community Preservation Corporation (CPC), and its subsidiary CPC Mortgage Company LLC, connected with KPMG LLP and no-code enterprise technology provider Unqork, to launch a mortgage forbearance and loss mitigation platform that supports the unique needs of its more than 3,000 borrowers.

“COVID-19 has created new challenges for the housing industry on a national scale. As millions of people have lost their jobs and the ability to pay rent, many owners are struggling to maintain their buildings and pay their taxes, mortgages and other obligations,” said Rafael E. Cestero, President and Chief Executive Officer of CPC, a nonprofit and Community Development Financial Institution specialized in multifamily housing.

As servicer of a large portfolio of multifamily property loans on behalf of nearly two dozen public and private investor institutions, CPC anticipated that some of their borrowers would experience a significant loss of rental income. The mortgage forbearance and loss mitigation platform development and execution was quick, and should make the transition into forbearance easier for everyone, Cestero said.

Since borrowers need to have a hub to guide them through the forbearance application process, the new platform is designed to manage borrowers’ submissions and allow users to review, track and approve requests filed by CPC’s asset managers and loan servicers.

“The need for institutions to react quickly has never been more important,” said Gary Hoberman, CEO and Founder of Unqork. “CPC, KPMG, and Unqork came together to deliver an intuitive application” that helps people transition to forbearance.

No-Code technology is more important than ever today to help strengthen communities and promote collaboration, and respond to business challenges with new and practical solutions, said Harvinder Bhatia, Managing Director at KPMG. Working together “we were able to address an immediate need.”

COVID-19 affects financial security for half of Americans

The pandemic may have given many Americans their first major financial crisis experience. Up to 49% of Americans say their level of financial security is worse since the COVID-19 pandemic began, 33% admit they were not prepared for a financial crisis, according to a survey conducted by financial services provider COUNTRY Financial.

The survey found 45% of participants currently are focusing on paying day-to-day expenses, 27% are saving for an emergency fund, 16% for retirement and 5% for investing in the stock market. As to how they plan to spend their stimulus check, 38% say it will help cover everyday expenses, 15% would pay a mortgage or rent, 22% plan to save or invest it.

On the upside, the pandemic presents an opportunity to regroup, assess and develop a financial plan, said Troy Frerichs, Vice President of Investment Services at COUNTRY Financial, and take advantage of the opportunity to lower interest rates to pay off debt, or refinance the mortgage.

While the full scope of COVID impact is not clear, said Christian Mitchell, executive vice president & chief customer officer at Northwestern Mutual, people will start “to rely more heavily on credit in order try and adapt to their new normal.”

The Northwestern Mutual 2020 Planning & Progress Study of Americans who carry debt found the average debt balance is $26,621, and 13% expect to be in debt the rest of their lives. One third of indebted Americans, or 33%, said their monthly income goes toward paying it off, exclusive of mortgages.

Northwestern found, 58% of U.S. adults carrying debt, say “it has a substantial or moderate impact on their ability to achieve long term financial security, and 18% of these responders said they delayed buying a home. Only 26% of Americans report having no debt.

Data suggest “just prior to the steepest impacts of the COVID-19 outbreak,” Americans have been making progress in their ability to manage and reduce debt during the past few years, said Mitchell. In the current environment, “many people are taking the time to reevaluate their financial situation.” Of those with some debt, 67% have a specific pay off plan.  

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