RICHMOND, Va., June 25, 2020 /PRNewswire/ -- Genworth
Mortgage Insurance, an operating segment of Genworth Financial,
Inc. (NYSE: GNW), today released takeaways from the first quarter
of 2020 by its Chief Economist, Tian
Liu. Additional details and charts can be accessed here.
COVID-19 Impact:
- The first-time homebuyer market faced significant
dislocation in April as a result of COVID-19. The number of
rate locks by potential first-time homebuyers decreased by 27% in
April from March as the spread of COVID-19 reduced traffic by
potential homebuyers and listings.
- States heavily impacted by COVID-19, including New York, Pennsylvania, and Michigan saw decreases of over 50% in
April.
- The dislocation was even greater for the repeat buyers' market.
The repeat buyers' market fell by 34%, in part because repeat
buyers faced greater hurdles in selling their existing homes.
- The COVID-19 pandemic has resulted in tighter credit
availability in the housing market, that led to a sharp
contraction in first-time homebuyers with riskier credit profiles
or relying on mortgages not backed by Fannie Mae and Freddie
Mac.
-
- The number of first-time homebuyers taking out FHA loans
decreased by 36% in April, and the market for jumbo loans decreased
by 50%.
- The number of first-time homebuyers using other products have
seen smaller declines in April. For example, the number of
first-time homebuyers using mortgage insurance decreased only by
18% in April, and those using VA loans decreased by 23%.
- As the economy re-opened in May, the first-time homebuyer
market rebounded by 27%. The repeat buyers' market rebounded by
37% in May as existing homeowners came back to the market.
-
- The number of first-time homebuyers rebounded across all
mortgage products, with jumbo loan borrowers up 41%, FHA loan
borrowers up 29% and low down payment conventional loan borrowers
up 24%.
"The COVID-19 pandemic pushed the U.S. economy into the sharpest
recession on record in March," said Tian
Liu, chief economist at Genworth Mortgage Insurance. "The
housing market corrected in April, with first-time homebuyer
activities down almost 30% in just one month. However, what
followed was a quick rebound in May of almost the same magnitude.
This is not what we typically see in a normal recession."
The summary of the data and Tian
Liu's analysis can be accessed, here.
About Genworth Mortgage Insurance
Genworth Mortgage
Insurance, an operating segment of Genworth Financial, Inc. (NYSE:
GNW), is headquartered in Raleigh, North
Carolina, and operates in all 50 states and the District of Columbia. Genworth Mortgage
Insurance works with lenders and other partners to help people
responsibly achieve and maintain the dream of homeownership by
ensuring the broad availability of affordable low down payment
mortgage loans. Genworth has been providing mortgage insurance
products and services in the U.S. since 1981.
Disclaimer
Opinions, analyses, estimates, forecasts,
and other views included in these materials are those of
Tian Liu, are based on current
market conditions and are subject to change without notice, do not
necessarily represent the views of Genworth or its management, and
should not be construed as indicating Genworth's business prospects
or expected results. Neither Tian
Liu nor Genworth guarantees that the information provided in
these materials is accurate, current, or suitable for any
particular purpose. Forward looking statements should not be
considered as guarantees or predictions of future events.
View original
content:http://www.prnewswire.com/news-releases/genworth-mortgage-insurances-economist-takeaways-first-quarter-2020--how-covid-19-impacted-first-time-homebuyers-301083352.html
SOURCE Genworth Mortgage Insurance