Mortgage rates grow more than 8% after 9 years, as the coronavirus pandemic hits a corner of the housing market

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  • Crime for mortgages increased a seasonally adjusted 8.22% in the second quarter to a high of nine, according to a Monday report by the Association of Mortgage Bankers.
  • The nearly 4% jump from the previous quarter was the largest in the survey’s history, according to the report.
  • In addition, the delinquency for FHA mortgages, reserved for first-time homebuyers, jumped to a record high.
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Some homeowners are struggling to pay off their mortgages amid the coronavirus pandemic as the next recession continues to hit the job market, according to a Monday report by the Association of Mortgage Bankers.

Overall mortgage increases took a seasonally adjusted 8.22% in the second quarter, according to the MBA. This marked a nine-year high, and an increase of almost 4% from the previous quarter, the largest quarter jump in the history of the survey.

“The effects of the COVID-19 pandemic on the ability of some homeowners to make their mortgage payments could not be clearer,” Marina Walsh, vice president of MBA of industry analysis, said in a statement.

Some homeowners were hit harder than others, according to the report. The delinquency rate for FHA mortgages — reserved for first-time home farms and used by many low-income minorities and Americans — rose nearly 2% in the second quarter, a full time period.

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At present, most homeowners who have difficulty repaying their mortgages are protected against foreclosure by the federal compensation program, which allows them to defer payments for one year without penalty due to the coronavirus pandemic. In early August, President Donald Trump signed an executive order aimed at extending federal eviction and moratoriums on foresight amid the pandemic.

Mortgage withdrawals generally follow closely with job availability, according to Monday’s report. Although the labor market has improved since record jobs were lost in April, the pace of recovery is slower. As of July, unemployment is still up 10.2%, and the US will have to cut roughly 13 million jobs to reach pre-pandemic levels.

The states with the highest increases in mortgage rates were New Jersey, Nevada, New York, Florida, and Hawaii, all states that have a large number of jobs for freedom and hospitality, the industry being hit hardest by the pandemic, according to the MBA.

“Certain homeowners, especially those with FHA loans, will continue with this crisis, and abuses will likely remain at high levels for the foreseeable future,” Walsh said.