If it sounds too good to be true, watch out. The coronavirus has caused many homeowners to lose jobs or take substantial cuts in income as the economy of the country shrinks. Government programs have helped, but not without consequences for homeowners and banking institutions.
The federal government has mandated that lenders give a break to consumers on some of their outstanding loans including mortgage loans, auto loans, credit cards and private student loans. Federal student loan payments are automatically suspended under the laws passed in late March.
Part of the problem with these pauses in required payments is that it can still negatively impact your credit score even though the law was written with the intention that this doesn’t happen. But as we know, there is no simple black and white when it comes to laws written in Congress, especially during such a complicated time.
For instance, if your mortgage was current when you received payment relief, chances are your credit rating will not be dinged, however, if you were experiencing late payments or skipped payments prior to the pause you will probably see your credit rating go down. Same with other types of loans since credit reports reflect anything that is not consistent in your credit history no matter what was indicated in the law. Also, you can assume there will be plenty of errors made to credit reporting companies during this time so when the dust settles, review your credit report and advise the appropriate credit reporting company of discrepancies.
A recent piece of good news extended the moratorium on evictions and foreclosures to Aug. 31 from June 30 for single-family and condo mortgages backed by Fannie Mae or Freddie Mac. However, like everything else financially-related during this time, some of these homeowners may unfortunately be putting off the inevitable as well as creating a problem for financial institutions down the road.
Manatee County’s May sales transactions as reported by the Realtor Association of Sarasota and Manatee are another mixed bag compared to last May, but here they are:
Single-family homes closed 38.7% fewer properties from last year. The median sale price was $325,000, up 1.6%, average selling price was $409,038, up 5.2%. The median time to sell was down 22% to 84 days, new pending sales were up 10.9% and new listings were down 11.7%. Month’s supply of available properties was down to 3 months, up 21.1%.
Condos closed 49.2% fewer properties compared to last May. The median sale price was $229,950, up 9.5%, average sale price was $261,466, up 6.1%. The median time to sell was down 10.3% to 96 days. New pending sales were down 8%, new listings were up 7.8% and month’s supply of available properties was up 4.8% to 4.4 months.
Overall better than I expected, but we’re still in an adjustment period with sales numbers lagging from before the shutdown. A lack of inventory continues to be the biggest problem for our market.
It’s hard to say what June is going to bring us, but Florida, in spite of higher infection rates, is starting to dig out of their financial hole at a good pace. The unemployment rate is down to 12.9%, slightly better than the national rate of 13.3%, and better than many other states.
However, the Federal Reserve reported that household net worth fell by 5.6% in the first quarter from the previous three months. Net worth includes home equity and investments, both of which have a direct impact on a buyer’s ability to purchase homes.
Have a happy July 4th, good luck in your search for fireworks, and as always, stay safe.
