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18 | M R EP O RT COVER STORY ster the mortgage market and keep rates low for the foreseeable future. "This echoes 2008 when the Fed's mortgage-backed securities buying spree increased demand for mortgage-backed securities at a time when investor demand was faltering. This, in turn, helped push mortgage rates down, enabling homeowners to lower monthly payments and encouraging invest- ment in housing," she said. She added that actions by the Fed could cause mortgage rates to "flirt with 3%". "Buying a home is the largest financial decision a person will make, and that is predicated on strong consumer confidence," Kushi said. "The Fed's actions may lower mortgage rates and help existing homeowners save money through refinancing. Potential homeowners benefit from boosted purchasing power, which should drive increased competition and escalate house prices. But, you need to have both—buying power and confi- dence—to make the decision to buy a home." Tendayi Kapfidze, Chief Economist at Lending Tree, however, said recent actions by the Fed "will have little effect" on the economy but will assist the recovery once COVID-19 subsides and activity returns to normal. "The Fed's goal appears to be to limit the damage to their financial markets during the period that social distancing will lead to widespread disruption to economic activity," Kapfidze said. "So far they are having little success as the markets focus their concerns on government response and the delay in a meaningful fiscal response." Danielle Hale, Chief Economist, realtor.com, told MReport that lower rates brought on by COVID-19 have created a "mini- refinancing boom." "Lower mortgage rates mean savings for buyers over what they might otherwise have paid. For an 80% loan on the typical home financed over 30-years, a buyer is looking at roughly $160 less as a result of mortgage rates now compared to where they were one year ago," she said. The Mortgage Bankers Association (MBA) reported mortgage applications rose 55.4% for the week ending March 6 and the expected volume of forecast origination is a 20.3% increase for 2019's $2.17 trillion to $2.61 trillion in 2020. Refinancing originations are expected to double from prior objections—rising to $1.23 trillion. The refinance index rose 79% from the prior week to its highest level since April 2009. It is also 479% higher than the same week in 2019. The purchases index increased just 6% from the previous week. Julio Gonzalez, CEO of ETS, said, as shown in the MBA report, that low rates will drive refinance and stimulate purchases. However, the rise of COVID-19 could also drive homebuyers to technology. "Although physical visits to look at properties are down ... virtual visits are skyrocketing as brokers are driving purchases through technology. No doubt the virus will drive the new norm which will be more acquisitions through tech," Gonzalez said. Eddie Shapiro, CEO, President, and founder of Nest Seekers International, a residential and commercial brokerage firm, said while the travel, entertainment, and hotel industries are taking a hit due to the coronavirus, the real estate industry is "more and more attractive." "It is and always will be the right alternative if you are looking for stability, safety, and long term wealth presentation," he said. "The cost of borrowing is incred- ibly low and seems to continue to go down even further. In addition, real estate holdings, in general, is not a volatile sector. It will continue to attract more participants who are looking for a safe haven in this environment and uncertain times." Stock Market Sell-Off T o say Wall Street has been volatile since COVID-19 made its way out of China has been understatement. The Dow Jones recorded its worst day since 2018 on February 27, as it fell 1,190.95 points (4.4%). The S&P 500 fell 4.4% to 2,978.76 while the Nasdaq dropped 4.6% to 8,566.48. Both the Nasdaq and S&P 500 had their biggest one-day loss since August 2011 on February 27. The S&P 500 closed below 3,000 for the first since October 2019 in February. Wall Street has continued to yo-yo ever since. On March 16, the S&P 500 fell more than 8% and the Dow Jones was down nearly 10% to just under 21,000. The CEOs of the nation's largest banks met with President Donald Trump following the mar- kets' collapse in March to discuss a plan of action. CitiGroup CEO Michael Corbat issued a strong statement to CNBC: "This is not a financial crisis." Bank of America CEO Brian Moynihan said banks are in a "great position" with plenty of capital and liquidity. He added the banks are looking to help all Americans and offer relief to consumers, especially to those who have been forced to be out of work due to the disease. Corbat added banks want to provide liquidity and there is a great deal of fear with recent talks of recession. He also said that the markets are currently in its "discovery phase" as it works to understand how the market is reacting to COVID-19. "We're here to help," Corbat said. Hale said the long-term impacts of the disease depends on how it evolves. She added that coronavi- rus seems "highly contagious" and while mild in 80% of cases, the 20% of cases that are not mild is what is concerning. "In the long-term it seems very likely that scientists will develop treatments and possibly even a vaccine that will mitigate the con- cerns, but in the medium-term, we could see a slowdown in eco- nomic activity as sick and quar- antined workers stay home which SPECIAL REPORT: COVID-19 "It's important during crises like this that our industry work together to help our customers in unison." —Wes Iseley, Senior Managing Director, Carrington Mortgage Holdings, Chairman, NMSA