Virus Outbreak-Airlines

FILE - In this March 20, 2020 file photo, an empty baggage carousel spins in Denver International Airport as travelers deal with the spread of the coronavirus in Denver. Airline service in the United States is teetering on the brink of collapse, with near-empty planes and coronavirus-caused outbreaks that have left some air traffic control towers empty. Even with sharply reduced schedules, airlines are consolidating some of the remaining flights because passengers aren’t showing up. (AP Photo/David Zalubowski, File)

The outbreak of the Coronavirus has dealt a shock to the global economy with unprecedented speed as it continues to spread across the world. Here is a look at some of the latest developments Wednesday related to the global economy, particular economic sectors:

Economists have been waiting for the first signs of virus-related disruptions in housing with the expectation that they will be seismic. Federal housing data looks further back for trends, meaning there is a lag in real world activity. But details have begun to emerge in private surveys.

On Wednesday, the Mortgage Bankers Association reported that mortgage applications plunged 29.4% last week. People trying to sell homes have cancelled showings during the outbreak and because closings are done in person, economists expect sales will decline sharply. But the virus has affected the market in other, unforeseen ways as well.

Despite additional cuts to benchmark interest rates by the U.S. Federal Reserve, mortgage rates have actually been rising.

Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said that’s partially because lenders amid the outbreak are wrestling with capacity issues, backlogs in the pipeline, and the challenge of working remotely in real estate.

“Home purchase applications were notably impacted by rising rates and the widespread economic disruption and uncertainty over household employment and incomes,” Kan wrote. “Last week’s purchase index fell 15% to its lowest level since August 2019.”

While mortgage applications fall, refinancing, which can be done from home, is soaring. Lending Tree says the economic effects of the virus outbreak have led to unprecedented volatility in mortgage interest rates and an overwhelming surge of borrower demand. The company’s data shows that refinance mortgage applications through its marketplace tripled from a year ago in each of the 50 largest cities and in all but five states. In San Francisco, refinance loan requests skyrocketed 417%.

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