Monthly Economic Commentary and Indicators

for Mortgage Industry Third Party Origination Professionals

May 2020

The Mortgage Economic Review summarizes recent Key Economic Indicators, Data, and Events that are important to Mortgage and Real Estate Professionals.

The news in April was a relentless bombardment of scary health statistics and ugly Economic Data. I won’t dwell on what you have already heard. Instead, let’s consider the different recovery scenarios and challenges we will face as we return to a New Normal.

Re-starting the Economy is slowly beginning, but what shape will the recovery take: V, U, W, or L shaped. No one really knows. A V-shaped recovery will see the Economy quickly bounce back in a few months. That would be great, but it’s unlikely. An L-shaped recovery will have the Economy linger at the bottom for many months or years. That’s very bad, but also unlikely – the American spirit is too resilient to let that happen.

A U or W is the probable shape of the recovery. During uncertainty, hope for the best but prepare for the worst. Hope for a V-shaped recovery, but prepare for an L. It’s too soon to predict the recovery shape or New Normal. One topic that hasn’t been discussed – and we need to prepare for – is Economic PTSD.

The country and world will be suffering from a collective PTSD for some time. Nothing survives a trauma like this without lasting scars. The Economic Scars will linger in society and broadly affect all aspects of Economic life – the Financial Market, Housing Market, Mortgage Market, Labor Market, Politics, Geopolitics, and especially Consumer Behavior – for a long time. It’s not fun to talk about, but as Mortgage Professionals, we need to be prepared for the effects of Economic PTSD on Home Buyers and Mortgage Borrowers.

One of those lingering issues will be the loans in Forbearance. The numbers are still growing, but so far, about 7.0% or 3,500,000 loans are in Forbearance. Forbearance is not Forgiveness. Borrowers that skip payments will eventually have to make them up. Depending on the loan type, several options are available. Some can be onerous, and I suspect more options will become available as this crisis drags on.

Read the full versions of this month’s “Economic Commentary and Indicators” and “Economic Calendar” using the links below.

Economic Data and Events

Interest Rates and Fed Watch

Housing Market Indicators

Labor Market Economic Indicators

Inflation Economic Data/Information

GDP Economic Data

Consumer Economic Indicators

Energy, International, and Misc

This Economic Commentary intro and full version PDF are provided by GMFS and written by Mortgage Elements to be a succinct summary of the key Economic Indicators and Economic Data that influence the Mortgage and Real Estate Industries. It is written for Mortgage, Realtor and Real Estate Professionals that need to stay current on Economic Information but don’t have hours to research and analyze Economic Data. © Copyright 2018 Mortgage Elements Inc, All Rights reserved.

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