BARBARA CORCORAN: I'm doing fine, Zack. You're looking good to me.
ZACK GUZMAN: Aha, thank you very much. I appreciate that. Let's dig into the housing-- the housing data that we got today, because we always love getting your take on it. And today, I know there's a lot of different ways we can look at it. But we'll start with the update we got, which was mortgage applications here.
The interesting number was a rise in applications-- 6% last week versus the previous week according to Mortgage Bankers Association seasonally-adjusted index. Purchase volumes also out. And we look at those, about 1.5% lower than a year ago. But a big jump up versus what we saw before, down 35% annually. So there's a lot to dig through here. But what's your general take on where we're headed based off of that?
BARBARA CORCORAN: Well, we're headed in different directions, depending upon where you're speaking about in the country. It's kind of a choppy market. When you actually look at those mortgage applications, you find they're erratic. Some states have tremendous upticks. Some are actually going down. But, at least, we average on a high note a little bit so that we can all feel optimistic.
But you have some areas where prices are really up, like Dallas or Orlando, 9%, 12%. Nobody expected that to be going on. You have Seattle, Washington DC, Boston, unbelievably, having bidding wars. Nowhere to-- hey, how's that happening in this market, OK? But then you have the black holes, the areas that are really hardest hit, like the urban areas.
And when you look at those numbers, those are mind boggling even worse than I thought in terms of quantity of sales. Sales are down by 40%. And even in my hometown of New York City where leases were just renewed on April 1, four out of 10 tenants opted not to renew. That doesn't happen in New York. People are always eager to renew those leases. So you've got a really whacked out kind of erratic up, down in between market all over the states.
But bottom line, it's improving. And maybe I should have said that upfront rather than yak, yak, yak, at you.
But bottom line, it's improving it ever so little. And it's improving in this month. And remember, this is a beginning of the spring season. My eyes are glued on what the numbers are next month. I think you're going to be in for a happy surprise.
ZACK GUZMAN: No, I mean, so that's the interesting thing too, because we did get that optimism on Monday when we looked at homebuilder sentiment that the reading did show a bit of a rebound, granted we were in that complete basement below the basement, really, if you think about historical averages on that sentiment front. But we are seeing an uptrend on that.
And you put all these things together, you can get low-record mortgage rates, pent up demand as states reopen here. Buyers start to go out, look at open houses. A flight to suburbs, as maybe people are afraid of being in a city during all this. So, I mean, you put all those things together, and the data we're getting now-- is it more than just a little bit of a recovery here? Is it kind of shaping up in your mind for kind of the next housing rally?
BARBARA CORCORAN: Well, you're almost setting me up for this one. But I would say what you're really seeing right now is a giant reshuffle in the housing market. Everybody who's sitting at home has the time to think about, is this what I want? What would we change? Where do we want to live? Everybody-- even those folks that weren't even thinking of that change have it on their mind, because there's a new realization of how important the home actually is.
You know, years ago, it was, what's the school district? And how many bedrooms or baths I need? And what can I build in? That was it. How big is the back yard? Vastly different now. Now, the home is a safe haven, literally, a safe haven. It's a school house. It's a remote office. And it's got to also be perfect enough to keep you as one big happy family for 24/7. That's a lot to expect out of a house.
And so today, everybody's had the time to resize this situation, exactly think of what they really want. And I think you're going to see an explosion in the housing market just by the virtue of the quantity of change. And so I think we're going to-- as soon as depending on which states open up, how quickly in the housing arena-- how you could show homes, make it more available. You're going to be surprised at how the numbers are going to go through the roof. I'm going to-- if I have, that's not the case.
ZACK GUZMAN: Yeah, I know. I mean, you talk about, I guess, you know, it's always an issue of supply and demand. We've talked about the issue on demand front, as homebuyers maybe staying home. But supply has always kind of been an issue on that front. Now, you brought up the issue of badly in terms of competition and bidding wars that do seem to be playing out now across the country.
The Redfin update was pretty interesting there seeing that about 40% of homebuyers that Redfin works with did report seeing bidding wars on purchasing a home. The rate was even higher in some cities that we've talked about before San Francisco, Boston, even Fort Worth, Texas getting in with some big bidding wars there too. I mean, does that just signal to you that that we are seeing a complete return here as homebuyers-- potential homebuyers get out there to really start looking at what's on the market?
BARBARA CORCORAN: Now, those are actually the states where it's easy to see a home where the brokers are still working and can open the doors and say, hey, here's the kitchen. Here's a bath. But if you look at the states where it's very difficult to show, difficult to do inspections, title searches, there's still so much obstruction between the buyer and the house that you don't see those same numbers.
But so in those states where you can access homes and show them, yes, those Redfin numbers are just the tip of the iceberg. But in those homes that are still locked away from the buyers, you're going to see actually a quicker rise in prices when you have that explosion of those frantic buyers coming through the gate-- oh, I want it. I want it. [LAUGHS]
ZACK GUZMAN: Well, I mean, let's get-- this will be the last question on housing before we take a break and talk more about businesses here. But when we look at housing just on a personal front, because I was thinking about maybe being a first-time home purchaser a couple months ago before all this happened and just looked at. I mean, mortgage rates continue to come down compared to about a year ago.
So, I mean, when you look at maybe first-time homebuyers looking at all this play out, what was your take on maybe all of these things that, as you're describing, a potentially very hot housing market, getting in now and maybe having it to sell later on down the line?
BARBARA CORCORAN: Well, before the pandemic hit, the first-time buyer market anywhere in the country was the hottest sector of the market. There were just enough houses to go around. And that was before half the house were removed from the market. So now you're working on half the inventory in just about every market, frankly-- some a little better than others.
But if you go back into that market, and you wait for the crowd-- if you like a crowd, like, I like to bid when everybody wants this and bid over them-- then just wait and sit still. But if you really want to get in there, I would say start putting your bids in right now. You're crazy not to be out there, Zack.
You know, I'm going to not laugh at you. But I'm going to say I told you so-- get out of the now put a bid in [LAUGHS] before the crowd is also doing the same thing. Home buying for the first-time buyer is the hottest sector of the market because of low interest rates. It was before the pandemic. And it's going to come back better than any other end of the market.
ZACK GUZMAN: All right, interesting stuff. Potential-- a lot of factors now coming together there to say that the housing market could be on the rebound. But always interesting to get your thoughts on that.