Rates Stay Near Zero Due to Fragile Recovery

 The Fed has determined that rates will stay close to zero for several years to come due to the long recovery ahead from the pandemic. The key short-term rate was close to zero after the latest Federal Reserve policy meeting last Wednesday.

American consumers and businesses are struggling because of COVID-19 and will continue to struggle if Congress, the White House and the Fed do not do more to help stimulate the country’s economy.

The Federal Reserve has already slashed the interest rates and started many lending programs as well as other stimulus efforts to support the national economy. It will continue to buy Treasury bonds and mortgage-backed securities.

“Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year,” the Fed said in its statement.

The Fed believes that the course of the virus can determine the path the economy will take. There is hope from the American people with the COVID-19 vaccines becoming available. People will begin to go back to normal spending habits and activities.

The country’s gross domestic product is anticipated to a 4.2% rebound next year. The Federal Reserve also predicts the unemployment rate will go back down to 5% in the year 2021.

“With vaccines on the horizon, the Fed’s economic projections for the next few years all got an upgrade, but don’t gloss over the immediate challenges still confronting the economy,” said Bankrate chief financial analyst Greg McBride in a report after the Fed announcement.

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A New and Unique Playground For Covington’s Bogue Falaya Park

 Bogue Falaya Park in Covington will get an ADA-compliant playground this winter. Last week David LeBreton of Digital Engineering, city councilman Mark Verret, mayor Mark Johnson, city engineer Callie Baker and Hunt Ragusa of Brunt Construction let a groundbreaking ceremony for the new playground.

Bogue Fayala Park is located on the south end of New Hampshire Street and Park Drive. The park holds many community events and has a pavilion available for rent. Residents can enjoy the playground and the

new boat launch where they can canoe, kayak and stand-up paddle along the Bogue Falaya River which winds through the park.

Plans for the ADA-compliant playground will include ramps that will lead up to the structure along with rubber surfacing around the structure which will make the playground wheelchair-accessible. There will be shade provided by shade canopies and play structures that incorporate core strength. The walking path that circles the interior perimeter of the park will also be paved.

The new handicapped-accessible playground and paved walking path are slated to be done in early February. Covington is funding half of the project while the other half will come from a Land Water Conservation Fund grant. The total project will cost $443,026 and will be constructed by Brunt Construction.

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September Sees Gains in Single-Family Permits

 September 2020 brought a 10.2% increase over September 2019 in single-family permits issued year-to-date (YTD) according to the U.S. Census Building Permits. In fact, the report shows that over the first nine months of this year, the total nationwide climbed to 713,286.

As for each region of the country, the year-to-date ending in September varied. For single-family permits the Southeast saw the highest increase at 12.4%, the Midwest came in at the second-highest

with a 10% increase, the West had a 6.3% increase and the Northeast saw the smallest increase at 6.2%. Multifamily permits did not fair so great. Every region saw a decline with the biggest decline in the West at -9.4%, the Northeast had a decline of -7.5%, the South at -5.6% and Midwest had a decline of -2.7%.

Among the states, only 42 states had a growth in single-family permits while the remaining 8 states and the District of Columbia resulted in a decline. The record highest growth was seen in South Dakota from 2,186 to 2,885 making this a 32% increase. The District of Columbia saw the steepest decline with a 22.2% drop from 126 to 98.

The multi-family sector was not so lucky. YTD only 18 states showed growth while the remaining 32 states and the District of Columbia showed a decline. Mississippi had the biggest increase from 246 to 588 while New Hampshire had the largest decline from 1,148 to 386.

The top 10 metro areas with the highest number of single-family permits were:

Metropolitan Statistical Area	Single-family Permits: Sep (Units #YTD, NSA)
Houston-The Woodlands-Sugar Land, TX	35,309
Dallas-Fort Worth-Arlington, TX	31,631
Phoenix-Mesa-Scottsdale, AZ	22,566
Atlanta-Sandy Springs-Roswell, GA	20,013
Austin-Round Rock, TX	15,327
Charlotte-Concord-Gastonia, NC-SC	13,258
Tampa-St. Petersburg-Clearwater, FL	11,683
Orlando-Kissimmee-Sanford, FL	11,367
Nashville-Davidson-Murfreesboro-Franklin, TN	10,429
Washington-Arlington-Alexandria, DC-VA-MD-WV	9,933

The top 10 metro areas with the highest number of multifamily permits were:

Metropolitan Statistical Area	Multifamily Permits: Sep (Units #YTD, NSA)
New York-Newark-Jersey City, NY-NJ-PA	31,160
Houston-The Woodlands-Sugar Land, TX	15,967
Austin-Round Rock, TX	15,294
Los Angeles-Long Beach-Anaheim, CA	12,095
Miami-Fort Lauderdale-West Palm Beach, FL	11,994
Dallas-Fort Worth-Arlington, TX	11,862
Phoenix-Mesa-Scottsdale, AZ	10,717
Seattle-Tacoma-Bellevue, WA	10,580
Nashville-Davidson–Murfreesboro–Franklin, TN	8,256
Minneapolis-St. Paul-Bloomington, MN-WI	7,881

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Mortgage Demands Still on the Rise

 Mortgage rates have been dropping now for twelve weeks in a row. The last week of November was no exception. Mortgage applications increased 3.9% in volume the last week of November according to the Mortgage Bankers Association’s seasonally adjusted index.

“Weekly mortgage rate volatility has emerged again, as markets respond to fiscal policy uncertainty and

a resurgence in Covid-19 cases around the country,” said Joel Kan, MBA’s associate vice president of industry and economic forecasting.

Refinance applications rose 5% which was the highest since last April. The volume of refinancing was 79% higher than this time last year. In fact, refinance was 71.1% of the total mortgage activity. According to Black Knight, a mortgage technology and data provider, today’s average mortgage rate is about a full percentage point lower than it was a year ago.

The average contract interest rate for 30-year-fixed-rate dropped to 2.92% with the points falling to 0.35 for loans with a 20% down payment. Even with the higher home prices, buyers are still on the winning side with such low rates. Mortgage applications to purchase a home were 19% higher than this time last year.

“Amidst strong competition for a limited supply of homes for sale, as well as rapidly increasing home prices, purchase applications increased for both conventional and government borrowers. Furthermore, purchase activity has surpassed year-ago levels for over six months,” Kan said.

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