December 21st, 2020 12:56 PM by Richard Sardella MLO.100007700/NMLS 233568
Will the pandemic cause a great urban reset? History says it will
Whenever an event affects the course of history, it leaves great changes in its wake. The 1918 pandemic improved conditions for the poor, transformed patient care in hospitals, and even inspired the U.S. to take an entirely new approach to public health.
According to Realtor’s Dr. Richard Florida, a professor at the University of Toronto, the Covid-19 crisis is bringing a Great Reset to our cities, suburbs, and communities. “Not just the health crisis—the economic and fiscal crises emerging in its wake, and the wave of protests for racial and economic justice that has swept up alongside it, are altering the way we live and work in powerful ways. This Great Urban Reset gives us a once-in-a-century opportunity to create more equitable and inclusive communities of all sizes and shapes.”
Dr. Florida identifies the Great Resets that remake and recharge economic systems in the wake of crises, saying they gave rise to new ways of living and working that enabled the economy to expand and grow. In great industrial cities, the wave of suburbanization that spurred economic growth after the Great Depression and World War II was palpable. “We are going through a third today, which began during the 2008 economic crisis and is being ushered into place by the Covid crisis,” he now says, saying global cities will not only survive but revive—as they did after even deadlier epidemics, economic crises, wars and natural disasters in the past. Commercial spaces are transformed into mixed-use areas where people live and work because of the combined forces of talent and innovation, both of which can stand alone as core characteristics of another reset.
He also adds that urban areas are not alone this time around, however, as smaller cities and suburbs, as well as rural areas, also have the ability to thrive as people flock to them because of their ability to do far-flung jobs remotely. Florida notes how remote technology “promises to reverse the great separation of the places we live and work that occurred during the Industrial Revolution,” adding that it opens the possibility to remake cities, suburbs, and rural areas alike into more complete communities where people work, shop, take their kids to school and carry out all the rest of life’s daily activities in much closer proximity to where they live.
Many of these underlying shifts are already underway. While Covid-19 is a once-in-a-century catastrophe, it also hands us a once-in-a-century opportunity to rebuild communities.
Source: Realtor | TBWS
How Rates Move:
Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I’m among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are trending sideways this morning. Last week the MBS market improved by +19 bps. This may've been enough to move rates or fees very slightly lower last week. We saw low rate volatility through most of the week.
This Week's Rate Forecast: Neutral
Three Things: These are the three areas with the greatest ability to move rates this week: 1) Stimulus, 2) Central Bank, and 3) Geopolitical.
1) Stimulus: While the vaccine is rolling out, the markets continue to "hope" for another round of stimulus in the $908B to $916B range as well as a spending Bill to fund the government.
2) Central Bank: We will hear from four major central banks this week: Swiss National Bank, Bank of England, Bank of Japan, and our own Federal Reserve Bank. The latter will get the most attention. While a rate change is not expected, we will be getting their economic projections and the famous "dot plot chart," which maps out future rate changes, among other things. The bond market will be very reactive to any policy change in their asset purchase plans, including changing the maturity times of what they are purchasing.
3): Geopolitical: Brexit continues to drag on and add to the economic uncertainty of Europe and Great Britain. Domestically, the Electoral Votes will be officially cast today but will not officially be approved by Congress until January 6th. The Georgia Senate runoff is by far the most critical factor in policy outlook for 2021.
This Week's Potential Volatility: High
Rate markets will be paying very close attention to the stimulus talks. If something gets done, look for rate volatility to spike. Brexit discussions are another major factor in the direction of rates and volatility.
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.