Daily Archives: March 4, 2020

Fed Issues Emergency Rate Cut Amid Coronavirus Crisis

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Source: Statista

In an attempt to contain the economic fallout of the coronavirus outbreak before things get worse, the Federal Reserve cut the federal funds rate by 0.5 percent to a target range of 1.00 to 1.25 percent on Wednesday. The unanimous decision by the Federal Open Market Committee marks the first emergency rate cut and the biggest one-time cut since 2008, when the financial crisis was in full force.

While pointing out that the fundamentals of the U.S. economy remain strong, the Federal reserve Chair Jerome H. Powell stated that “the coronavirus poses evolving risks to economic activity,” adding that the FOMC’s decision was made “in light of these risks and in support of achieving its maximum employment and price stability goals.”

While President Trump, a long-time critic of the Fed’s cautious approach to monetary policy, was quick to call for even deeper cuts, others argued against the emergency decision, saying that it only added to the panic that had sparked the worst stock market selloff in years last week. Markets didn’t exactly rally after Tuesday’s announcement, as the S&P 500, the Dow and the Nasdaq fell between 2.81 and 2.99 percent, undoing some of Monday’s market recovery.

Infographic: Fed Issues Emergency Rate Cut Amid Coronavirus Crisis | Statista

Remote Work Is Enabling Americans to Move to More Affordable Cities

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For 25% of Americans, telecommuting increases after a move

SEATTLE, March 2, 2020 (PRNewswire) (NASDAQ: RDFN) — One in four U.S. residents work remotely more frequently after moving to a new metro area, according to a new survey conducted by Redfin (www.redfin.com), the technology-powered real estate brokerage. With unemployment at the lowest level in decades and wages stagnant, the chance to telecommute is allowing U.S. workers to move to more affordable areas, while maintaining their salaries.

“The job market is very tight and employers want to hold on to people, so companies are much more willing now to allow workers to move,” said Redfin chief economist Daryl Fairweather. “Plus, technology has enabled employers to let staff work remotely in a cost-efficient and productive manner.”

Of all eligible survey respondents, more than half (51.1%) work remotely sometimes or always after their move, compared with just 44% who worked remotely before the move.

One way employers may be battling salary increases and supporting retention is by offering employees the ability to work remotely instead of higher wages, Fairweather said. For employees, the chance to work remotely allows them to move to a more affordable place while maintaining their salary.

Survey respondents listed varying reasons for packing up their lives. The most common primary justification was more affordable housing (25.7%). In second place came proximity to family/partners (21.2%), followed by retirement (17.9%).

While only a quarter of participants move for affordability, almost 60% said their ability to afford non-housing expenses and leisure activities improved after their relocation.

About 1 in 7 respondents said they wouldn’t have been able to move without the ability to work remotely. Of people who moved specifically for affordability reasons, a slightly higher share said they couldn’t have relocated without remote work, indicating that remote work has enabled workers to move to areas with more affordable homes.

The most common metros respondents migrated away from for affordability reasons were the Bay Area, Los Angeles, and Seattle, while the most popular metros people moved to for affordability were Phoenix, Sacramento, CA and Portland, OR.

In the fourth quarter of 2019, 26% of Redfin.com home searchers looked to move to another metro area, up from 25% during the same period of the prior year, according to a Redfin report from February. That tied the all-time high for the national share of home-searchers looking to relocate that was set in the third quarter. Phoenix, Sacramento and Las Vegas saw the highest net inflows.

Among the survey respondents, younger people saw a greater increase in remote work after relocating than older people. Of respondents 38 and younger, 55.5% worked remotely sometimes or always after moving, up from 46.9% before moving. Of participants 39 and older, 49.2% worked remotely sometimes or always after moving, compared with 42.7% before moving.

To read the full report, including research methodology, please visit: https://www.redfin.com/blog/work-remotely-after-moving.

About Redfin
Redfin (www.redfin.com) is a technology-powered real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including theRedfin Estimate, the automated home-value estimate with the industry’s lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 90 major metro areas across the U.S. and Canada. The company has helped customers buy or sell homes worth more than $115 billion.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release distribution list, email press@redfin.com. To view Redfin’s press center, click here.

Once-in-a-Generation Refinance Market Has Arrived

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US mortgage market is currently valued at $11T with consumers having the highest credit quality and lowest loan to values in history

The current market, as foreseen by loanDepot CEO Anthony Hsieh years ago, may create consumer demand that outpaces industry-wide production capacity by double or more in the very near future

Foothill Ranch, CA – March 4, 2020 (PRNewswire) As the 10-Year Treasury yield broke below 1% for the first time ever, loanDepot CEO Anthony Hsieh, cautions that while this may be the best of times for US homeowners, the market could prove to be problematic for the home lending industry as a whole.

“This is the biggest refinance rally in the history of our country,” said Hsieh. “It’s unprecedented. There could be $4-5T of demand this year, and, obviously, this cycle is not one that we have seen before. The market size, coupled with the credit quality of consumers, will likely create industry whiplash, in so much as industry lending capacity will not be able to equal consumer refinance demand.”

“The current market conditions can create exceptional opportunities for consumers,” continued Hsieh,”but I think it’s going to be critical for consumers to be very knowledgeable and, importantly, very patient. The analogy I would use is this: when you are using shared Wi-Fi at an airport, sometimes speed can be slowed because everyone around you is trying to use the same services. This market is unpredictable, but upcoming capacity demand for refinance may create a similar, slowed experience.”

Despite foreseen overall industry capacity constraints, Hsieh encourages consumers to take advantage of all that this market may offer by working with reputable lenders of scale who have the elasticity and resources to effectively address spikes in volume, while continuing to give customers exceptional service and reasonable closing times.

“This market is going to create a unique moment,” said Hsieh. “The market and these interest rates will create dinner conversation in homes all across America. These conversations will drive refinance volume to all lenders, even without large advertising spend and campaigns. Given this, lenders who cannot scale, and those that do not have the wisdom to responsibly approach this market, will be over capacity within the next 60-90 days.”

Roughly 80% of US homeowners are currently ‘in the money’ so to speak, and able to take advantage of what the current market offers. To help make the upcoming refinance spike as personally optimized as possible, consumers should make sure they have clear goals in mind, have documents gathered and speak with a knowledgeable, licensed lending officer who can provide honest and transparent information about the timeframes within which transactions can be completed and benefits realized.

“And, above all,” Hsieh opines, “consumers should be prepared to be patient as they take advantage of this fantastic, wild ride.”

About loanDepot
An innovator since its inception in 2010, loanDepot continues to disrupt the lending industry with its focus on creating the technologies needed to deliver seamless borrowing experiences to its customers. loanDepot debuted the industry’s first end-to-end fully digital loan, the mello smartloan™, in 2019. The Company has funded over $202 billion since its founding, and currently ranks as the second largest nonbank lender and one of the leading retail mortgage lenders in the U.S. NMLS #174457

Media Contact:
Lori Wildrick
Vice President, Communications
(949) 330-8791 (office)
lwildrick@loandepot.com