Pandemic Fuels a Major Shift for Consumer Spending in Favor of Housing
GREENSBORO, N.C.–(BUSINESS WIRE)–
Strong demand for housing should outlast the end of 2020, according to the Fall edition of The Housing and Mortgage Market Review (HaMMR), released today by Arch Mortgage Insurance Company (Arch MI), a leading provider of mortgage insurance.
“Ironically, the difficult economic situation has benefited housing,” said Ralph G. DeFranco, Ph.D., HaMMR author and Global Chief Economist for Arch Capital Services, Inc. “The pandemic has resulted in interest rates at all-time lows and the general realization that housing has never been more important. Demand is so strong that we’ve had two straight months of a record-low number of homes for sale. That has set the stage for continued positive home-price growth in 2021.”
The latest HaMMR explains why the factors driving today’s housing market are likely to continue.
“The pandemic is limiting people’s expenditures on other large-scale items, such as weddings and international travel,” DeFranco said. “Instead, people are seeking additional space for home offices and leisure needs, such as exercise equipment and room for a backyard barbecue. Second homes are also being snapped up in record time.”
Home prices are up in all 50 states over the past year, with the fastest growth occurring in Idaho, Arizona, Montana, New Mexico and Wyoming. The slowest growth rate in home prices occurred in Hawaii, Illinois, North Dakota, Alaska and Iowa.
- The Housing and Mortgage Market Review is posted at archmi.com/hammr. The Fall 2020 issue focuses on the pandemic’s impact and what is driving the shortage of homes for sale. It also describes trends to watch in 2021, including more rental single-family housing, a shift in construction to larger homes and what the future of remote work will look like.
- DeFranco will host a Housing Update webinar discussing market conditions and the details of HaMMR on Thursday, Nov. 12 (1 p.m. ET/10 a.m. PT). Registration is free at archmi.com/hammr.
About Arch Mortgage Insurance Company
Arch Capital Group Ltd.’s U.S. mortgage insurance operation, Arch MI, is a leading provider of private insurance covering mortgage credit risk. Headquartered in Greensboro, North Carolina, Arch MI’s mission is to protect lenders against credit risk, while extending the possibility of responsible homeownership to qualified borrowers. Arch MI’s flagship mortgage insurer, Arch Mortgage Insurance Company, is licensed to write mortgage insurance in all 50 states, the District of Columbia and Puerto Rico. For more information, visit archmi.com.
Cautionary Note Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This release or any other written or oral statements made by or on behalf of Arch Capital Group Ltd. and its subsidiaries may include forward-looking statements, which reflect our current views with respect to future events and financial performance. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements.
Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or their negative or variations or similar terminology. Forward-looking statements involve our current assessment of risks and uncertainties. Actual events and results may differ materially from those expressed or implied in these statements. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements includes the following: adverse general economic and market conditions; increased competition; pricing and policy term trends; fluctuations in the actions of rating agencies and the Company’s ability to maintain and improve its ratings; investment performance; the loss of key personnel; the adequacy of the Company’s loss reserves, severity and/or frequency of losses, greater than expected loss ratios and adverse development on claim and/or claim expense liabilities; greater frequency or severity of unpredictable natural and man-made catastrophic events, including pandemics such as COVID-19; the impact of acts of terrorism and acts of war; changes in regulations and/or tax laws in the United States or elsewhere; the Company’s ability to successfully integrate, establish and maintain operating procedures as well as consummate acquisitions and integrate the businesses the Company has acquired or may acquire into the existing operations; changes in accounting principles or policies; material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements; availability and cost to the Company of reinsurance to manage the Company’s gross and net exposures; the failure of others to meet their obligations to the Company; changes in the method for determining the London Inter-bank Offered Rate (“LIBOR”) and the potential replacement of LIBOR and other factors identified in the Company’s filings with the U.S. Securities and Exchange Commission (“SEC”).
The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein or elsewhere. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Arch Capital Services Inc.
Greg Hare, 336-333-0416
Margaret Bonaparte, 415-891-4914
Source: Arch Capital Group Ltd.