MReport July 2020

TheMReport — News and strategies for the evolving mortgage marketplace.

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M R EP O RT | 23 EXPERT INSIGHTS Housing 'More Affordable' Due to Falling Mortgage Rates Odeta Kushi, Deputy Chief Economist, First American Financial, discusses how those with stable incomes can take advantage of "historically low mortgage rates." O deta Kushi is the Deputy Chief Economist for First American Financial. Kushi prepares analysis, com- mentary, and forecasts on trends in the real estate and mortgage markets. Kushi conducts research around demographic trends, millennials, and homeownership. She also monitors and analyzes quar- terly surveys and economic data related to the housing industry. Her research has been published in leading business and industry trade publications. In a recent interview with MReport Kushi delved into the challenges facing millennials in the current market and what the lingering effects on COVID-19 could be for housing. M // How have millennial and Gen-Z home buyers been impacted by COVID-19? KUSHI // Historically low mort- gage rates have made it more affordable for those with stable incomes to buy that first home. But, tightening credit stan- dards and the limited inventory of homes available for sale are making it harder for some to qualify for financing and find that ideal first home. For millennials specifically, they tend to have lower credit scores and put down less of a down payment than repeat buyers and so tightening credit standards disproportionally hurts millennials as first-time buyers. M // How long could the housing market be impacted by the effects of the pandemic? KUSHI // The housing market is beginning to show some early signs of a rebound, but the path to recovery will really be dependent on the duration of this pandemic. The longer it continues, the more likely the economic fallout will result in a prolonged recession and high unemployment. That means fewer numbers of sellers willing to put their home on the market and reduced buyer demand, as well. But buying a home is actually a lifestyle decision as well as a financial decision, so those that feel financially confident will continue to purse that dream of homeownership. "The longer it continues the more likely the economic fallout will result in a prolonged recession and high unemployment." — Odeta Kushi

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