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Friday, October 23, 2020
People walk into a house for sale in Floral Park, Nassau County, New York, the United States, on Sept. 6, 2020. Wang Ying | Xinhua News Agency | Getty Images Borrowers are clearly used to hearing that mortgage rates set another record low because last week's dip did nothing to spur mortgage demand. The volume of applications for mortgages decreased 0.7% for the week, according to the Mortgage Bankers Association's seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510,400 decreased to 3% from 3.01%, with points decreasing to 0.32 from 0.37 (including the origination fee) for loans with a 20% down payment. Applications to refinance a home, which are most sensitive to weekly interest rate movements, fell 0.3% for the week but were 44% higher than a year ago. While that annual comparison may seem like a lot, it had been around 100% higher earlier this year. The new record low was also such a tiny move that it clearly had little impact. Applications for a mortgage to purchase a home fell 2% for the week but were 24% higher annually. That
China's Evergrande Real Estate Group. Brent Lewin | Bloomberg | Getty Images SINGAPORE — Shares of China Evergrande plunged on Wednesday, after the indebted Chinese property developer said it had placed new shares at a discount. On Wednesday morning, its Hong Kong-listed shares dived more than 16%. The cash-strapped developer, China's second-largest by sales, announced it raised 4.3 billion Hong Kong dollars ($555 million) in estimated gross proceeds from a share placement — a figure that fell far short of its targeted $1.1 billion. It sold 260.65 million shares at 16.50 Hong Kong dollars per piece. China Evergrande said that it would use the cash raised to refinance its debt. The cash-strapped company was downgraded by S&P Global Rating from "stable" to "negative" recently. The ratings giant explained that Evergrande's liquidity was weakening, and its short-term debt has continued to surge partly due to its acquisition of property projects. As of June 30, China Evergrande had short-term debt of 396 billion yuan ($58 billion), according to S&P. A leaked document last month also suggested that China Evergrande had sought help from the Chinese government due to a supposed cash crunch. The company
SINGAPORE — Global real estate prices have largely held their own in the face of an unprecedented economic hit from the coronavirus pandemic, says Sean Darby, global head of equity strategy at Jefferies. "It's been perhaps one of the most fortunate events for policymakers in that we've not really seen any significant declines in global property prices," Darby told CNBC's "Street Signs Asia" on Monday. Underlying demand in places such as the U.S., U.K. and China have been "very strong," Darby pointed out. This has served as a "huge backstop" for policymakers as they grapple with the economic meltdown of the pandemic, he said. "Importantly, it has really allowed the domestic banking system to be relatively unimpaired by asset deflation." He said Australia has been an exception and property prices there have seen a "modest decline." China's 'robust' property sales As China continues to see a strong recovery from the pandemic, some analysts have voiced concerns the Chinese property sector may be overheating. Shares of the country's second-largest developer by sales, Evergrande, were hit by a wave of volatility in September following the release of a leaked document that raised questions over the firm's liquidity position.