Current Events in August 2020

TikTok has gone on the offensive to set the record straight about what it is, who owns it, and more.

With rumors running rampant both on Capitol Hill and in the press, the social media app is taking accusations about things like data tracking and its ties to China head on by launching a new information center to call out anything that the company considers off-base or altogether wrong.

“Let us set the record straight. TikTok is not available in China,” the company vowed. “[TikTok’s] US user data is stored in Virginia with a back-up in Singapore and strict controls on employee access. TikTok has never provided any US user data to the Chinese government, nor would it do so if asked. Any insinuation to the contrary is unfounded and blatantly false.” 

“TikTok has become the latest target, but we are not the enemy. The bigger move is to use this moment to drive deeper conversations around algorithms, transparency, and content moderation, and to develop stricter rules of the road. We are taking the first step of many to address these concerns, and call on the industry to follow our lead for the benefit of users and creators everywhere,” added CEO Kevin Mayer.

Fighting Trump’s Executive Order

Taking China out of the discussion would be a nice start, but the app developer is also having to wrestle with President Trump’s executive order threatening that the company would be banned in the U.S. if it isn’t sold by the Chinese companies that own it.

In response, the company is challenging the White House’s threat by saying that the Trump administration is overstepping the “rule of law.” More importantly, it wants its 2+ billion users to know that this matter will be a fight to the finish.

“This Executive Order ... sets a dangerous precedent for the concept of free expression and open markets. We will pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly – if not by the Administration, then by the US courts.”

Misinformation and election interference

Having seen Facebook fall in an election interference mud puddle in 2016, TikTok seems determined to steer clear of that gaffe. To bolster its effort, the company is installing three new measures to combat misinformation and any other content that may be rigged to disrupt the 2020 election. These include:

1. An update on policies regarding misleading content to provide better clarity on what is and isn't allowed on TikTok. 

2. Broadening its fact-checking partnerships to help verify election-related misinformation, and adding an in-app reporting option for election misinformation.

3. Partnering with experts from the U.S. Department of Homeland Security to protect against foreign influence on its platform.

As cases of depression continue to grow nationwide, researchers are always looking for ways to treat the condition. A new study conducted by researchers from Massachusetts General Hospital found that having a strong social network could help protect against depression. 

“Depression is the leading cause of disability worldwide, but until now researchers have focused on only a handful of risk and protective factors, often in just one or two domains,” said researcher Karmel Choi, PhD. “Our study provides the most comprehensive picture to date of modifiable factors that could impact depression risk.” 

Staying socially engaged

To understand potential risk factors associated with depression, the researchers evaluated data from the U.K. Biobank. This study included responses from over 100,000 participants and assessed depression-related risks like screen time, physical activity, and sleeping habits, among several others. 

Of all of the risk factors they looked at, the researchers learned that having strong social connections was the most effective in terms of protecting against depression. Participants reported better mental health outcomes when they had cherished relationships in their lives, regardless of whether it was with friends or family. Having that network of people around for support and social engagement was crucial to reducing depression-related symptoms. 

“Far and away the most prominent of these factors was frequency of confiding in others, but also visits with friends and family, all of which highlighted the important protective effect of social connection and social cohesion,” said researcher Dr. Jordan Smoller. “These factors are more relevant now than ever at a time of social distancing and separation from friends and family.” 

While depression affects everyone differently, and there’s no single approach to improving such symptoms, these findings are an important piece of the puzzle when thinking about mental health. The researchers hope that more work can be done in this area to better understand the risks and protective factors associated with depression. 

“Depression takes an enormous toll on individuals, families, and society, yet we still know very little about how to prevent it,” said Dr. Smoller. “We’ve shown that it’s now possible to address these questions of broad public health significance through a large-scale, data-based approach that wasn’t available even a few years ago. We hope this work will motivate further efforts to develop actionable strategies for preventing depression.” 

A group of state attorneys general are seeking $26.4 billion from three major drug firms and Johnson & Johnson, The Wall Street Journal reported on Tuesday. 

Citing sources familiar with the matter, the Journal said about a dozen states are seeking to help pay for damages created by addiction to opioid drugs manufactured and sold by the companies. 

The drug companies -- which include McKesson, Amerisourcebergen, and Cardinal Health -- are accused of marketing the pain pills in a way that “overstated” their benefits and minimized their risks. Distributors are also accused of failing to stop an influx of suspicious orders. 

“We believe this latest settlement proposal would be viewed as a favorable outcome and would expect the stocks to react positively to the news as a global settlement would put the uncertainty behind,” JP Morgan analyst Lisa Gill said.

More than 3,000 lawsuits have been filed by states, local governments, and Native American tribes contending that drug companies helped fuel the opioid addiction epidemic through misleading marketing of the drugs. 

Litigation on the issue ultimately prompted OxyContin-maker Purdue Pharma to file for bankruptcy in September 2019.  

As restaurants continue to reopen for dine-in service, some consumers seem to be comfortable with an on-premise, sit-down meal. But a new study suggests that more than two-thirds would rather be at home, doing their own cooking, serving themselves, and -- most importantly -- staying safe from COVID-19.

A new study by consulting firm AlixPartners suggests that diners are raising their expectations as consumer confidence in restaurant safety grows. Adam Werner, AlixPartners managing partner, said during a Restaurants Rise webinar that the study’s results are indicative of a new relationship between restaurants and customers that is emerging during the pandemic.

He points out that while restaurant spending is far from rebounding back to normal, it remains the number one choice when consumers are asked how they’d like to spend their dining dollars.

“Consumers are looking to dine out. It’s not all doom and gloom. They want to go,” Werner said. “They need to leave the house, but they want to feel safe.”

The safety of eating at home

On the question of feeling safe, the AlixPartners study mirrors what similar studies have shown -- that health and safety is still the top priority for consumers. 

However, foodies appear to be lowering their guard when it comes to contact with other people. In April, 49 percent of the AlixPartners respondents said they ate at home so they could limit contact with other people. In July, that preference softened to 44 percent. 

While the percentage of consumers who said they prefer cooking at home held steady at 61 percent from April to July, their reasons for staying home also changed a bit. As an example, 45 percent of consumers said takeout/delivery was too expensive for their tastes in July, a metric that rose from 39 percent in April.

Digging a little deeper, AlixPartners researchers found that nearly 57 percent of consumers are now ordering delivery or takeout at least once a week. 

However, that metric comes with a warning from Werner. Even though the delivery business is starting to bounce back, he said that consumers would still prefer to pick up the food themselves. It’s not only because they can save a few bucks on delivery, but also because they’re concerned about health and safety.

Restaurants need to be patient

Werner laid down the law to restaurant operators by saying that they need to remain fluid in how they respond to customers while trying not to second guess them. “The consumer experience is suffering, and those that get it right will win,” he said.

“While contemplating how consumers will behave in the post-pandemic world is an interesting exercise, dealing in hypotheticals can be distracting and, worse, paralyzing at a time when decisive action is crucial. In recovery, they may have to make some decisions they don’t like. But operators need to embrace the unique opportunity to reset consumers’ relationship with the business,” AlixPartners told restaurateurs in a separate advisory.

Pizza hut is closing 300 of its U.S. restaurant locations after one of its largest franchisees declared bankruptcy in July. NPC International is closing about 25 percent of its restaurants and has agreed to sell the rest. A timeframe for the closings has not yet been announced.

It may seem odd that pizza restaurants would be shutting down at a time when pizza sales are booming -- sales are so strong that there’s now a pepperoni shortage -- but it turns out some kinds of pizza restaurants are doing better than others.

A spokesperson for NPC International said “a substantial majority” of the locations targeted for closing have dining rooms. Until recently, restaurant dining rooms have been closed due to the coronavirus (COVID-19), and these Pizza Hut locations have been relying on take-out business. Pizza chains like Domino’s, built around home delivery, have thrived during the pandemic.

Significant blow

The NPC International bankruptcy is a significant blow for the brand. The company is Pizza Hut’s largest franchisee in the U.S., operating 1,227 locations. That represents 20 percent of Pizza Hut’s U.S. restaurant base.

“We have continued to work with NPC and its lenders to optimize NPC’s Pizza Hut restaurant footprint and strengthen the portfolio for the future, and today’s joint agreement to close up to 300 NPC Pizza Hut restaurants is an important step toward a healthier business,” Pizza Hut, owned by Yum! Brands, said in a statement.

NPC International employs approximately 23,000 people, producing more than 68 million pizzas to consumers in 27 states. NPC has been a pizza restaurant franchisee for nearly 60 years. It joins 43 other retailers, mostly department stores and apparel retailers, that have declared bankruptcy since the beginning of 2020. 

CNBC reported in July that the franchisees operating fast-food restaurants are struggling. CEC Entertainment, the parent company of Chuck E. Cheese restaurants, filed for Chapter 11 bankruptcy protection in June.

Victims of a robocall operation are finally getting relief from the Federal Trade Commission (FTC). The agency announced on Tuesday that it will be sending thousands of checks worth a total of over $700,000 to small business owners who were taken in by telemarketers who claimed to work for Google. 

FTC officials claim that telemarketers working for Pointbreak Media, Modern Spotlight, National Business Listings, and Modern Source Media called business owners and said that their companies would be labeled as “permanently closed” unless they consulted with a “Google specialist.” 

Once on the line, the “specialist” claimed that the business owners could verify and claim their Google listing by paying a one-time fee ranging between $300 and $700. Victims were told that paying the fee would also ensure that their company would appear prominently on internet search results.

Business owners taken in by the scam who receive checks will be given an average refund of $158.32, which should be deposited or cashed within 60 days. Those who haven’t filed for a refund but were charged by the defendants are being encouraged to contact JND Legal Administration -- the refund administrator for the case -- at 1-833-928-2553. 

In its announcement, the FTC notes that business owners do not need to pay money or provide additional information to cash their refund checks. Anyone claiming otherwise is likely trying to scam the recipient out of their refund money. 

Wegmans Food Markets is recalling Valencia Oranges, lemons, bulk lemons, and various-store produced seafood and restaurant foods items containing fresh lemon.

The products may be contaminated with Listeria monocytogenes.

No illnesses have been reported to Wegmans or its supplier.

The following items, sold between July 31 and August 7, 2020, in Wegmans stores in New Jersey, Pennsylvania, Virginia, North Carolina, Maryland, and Brooklyn and Harrison, N.Y., are being recalled:

• Wegmans 4-lb Bag Valencia Oranges – UPC: 7789052363
• Wegmans 2-lb Bag Lemons – UPC: 7789015917
• Wegmans bulk lemons – UPC: 4033

What to do

Customers who purchased the recalled products may return them to the service desk for a full refund.

Consumers with questions may contact Wegmans at (855) 934-3663 Monday through Friday from 8:00 a.m. - 7:00 p.m. or Saturday and Sunday from 8:00 a.m. - 5:00 p.m.

Coronavirus (COVID-19) tally as compiled by Johns Hopkins University. (Previous numbers in parentheses.)

Total U.S. confirmed cases: 5,408,268 (5,379,914)

Total U.S. deaths: 170,131 (169,745)

Total global cases: 21,720,713 (21,527,747)

Total global deaths: 776,127 (772,370)

Immunologists: lasting immunity even after a mild infection

If you’ve had the coronavirus (COVID-19), even a mild case, here’s some good news. A series of studies conclude that you might not have to worry about the virus in the future.

The studies found that antibodies and immune cells that can fight the virus were found in former patients’ blood months after they had recovered. The findings give hope to doctors who have counted on “herd immunity” to eventually defeat the virus.

“This is exactly what you would hope for,” Marion Pepper, an immunologist at the University of Washington who authored one of the new studies told the New York Times. “All the pieces are there to have a totally protective immune response.”

The studies have not yet been peer-reviewed.

Conflicting data on the effectiveness of bandanas and neck gaiters

The five months of the COVID-19 pandemic have been marked by a lot of conflicting information as scientists try to learn more about a new virus. Lately, some of the conflicting information has extended to face coverings.

Researchers at Duke University have published a study contending that bandanas and neck gaiters are among the worst choices you can make when selecting a face covering. They say the two items are actually worse than wearing no face covering at all.

But medical researchers at West Virginia University have an opposing view, saying a gaiter, assuming it’s properly fitted, will provide a respiratory containment of exhaled droplets comparable to a common over-the-ear cloth mask. They admit that the cloth provides no filtration but say tests show they do limit the spread of exhaled droplets.

The risk to obese patients isn’t always the same

Doctors noticed from the start that people who are obese are at increased risk of death from the coronavirus. But now they have discovered that not all obese people are affected in the same way.

Researchers at Kaiser Permanente found that the risk of death from COVID-19 associated with obesity disproportionately affects men and people under 60 years of age.

"Although this study examines a variety of factors that may be associated with risk of death from COVID-19, our main objective in this paper was to understand risk related to obesity, and obesity-associated chronic conditions in our health care system," said lead researcher, Sara Tartof, PhD, MPH, of Kaiser Permanente Southern California Department of Research & Evaluation.

Pre-existing heart conditions may increase death risk, study finds

While the coronavirus appears to affect the lungs and respiratory systems of people who get the illness, it also can cause heart problems, especially in patients with a history of cardiovascular illness.

An Italian study published in PLOS ONE found that patients with pre-existing heart conditions are more likely to develop cardiovascular complications while hospitalized, and they’re more likely to die from COVID-19 infection.

Cardiovascular complications were observed during the hospital stay of 14 percent of the COVID-19 patients with a history of heart ailments. When the researchers analyzed the data, they found that pre-existing cardiovascular risk factors were significant predictors of cardiovascular complications but age and gender were not.

The great pepperoni shortage

Pizza restaurants across the nation that have seen their business boom since late March, when Americans were told to shelter in place, are reportedly having trouble finding their customers’ favorite topping. 

Bloomberg reports that pizza restaurants across the nation are now facing a growing shortage of pepperoni, and the cost of that popular topping has nearly doubled. The report attributes the shortage to two factors -- production problems at some meat plants that have reduced output and growing demand from consumers over the last five months.

Smaller “mom and pop” shops have been hit hardest. According to Bloomberg, Charlie’s Pizza House in Yankton, South Dakota was paying $2.87 a pound for its supplies of pepperoni in January. Now, the price is $4.12 a pound. One independent New York eatery has seen its pepperoni cost go from $4 a pound to $6.

Around the nation

• Michigan: A dispute over wearing a mask turned deadly after a state employee reportedly stabbed a man during the heated argument. The suspect was later fatally shot by a sheriff’s deputy. Authorities say the suspect had been reprimanded three times over workplace issues.

• Maine: Tiny Homes of Maine, a specialty builder, says business is booming during the pandemic. The owners say demand has increased for “tiny homes” for a number of reasons, but the main reason is the financial insecurity many residents are feeling. 

• New York: A mass exodus from New York City and stringent pandemic-related requirements have some giving up on America’s largest city. One of the latest is best-selling author and hedge fund trader James Altucher, who says the city is “dead forever.” He added that his temporary relocation may become permanent.

The FDA has granted emergency use approval to a “groundbreaking” COVID-19 saliva test used on NBA players and staff. 

The test, dubbed “SalivaDirect,” was developed by researchers at the Yale School of Public Health. It doesn’t rely on additional components, meaning it’s less likely to see the same testing shortages that have been seen with the standard coronavirus nasal swab test. 

The results of a June study on NBA players (chosen because they are tested regularly, are in close contact with one another, and don't wear face coverings) showed that the test was “simpler, less expensive, and less invasive than the traditional method for such testing.” 

SalivaDirect “is being further validated as a test for asymptomatic individuals through a program that tests players and staff from the National Basketball Association (NBA),” Yale said in a news release. “Results so far have found that SalivaDirect is highly sensitive and yields similar outcomes as NP swabbing.” 

Now that the FDA has issued emergency use authorization, the testing method has been made “immediately available to other diagnostic laboratories that want to start using the new test,” Yale said. 

Making testing more accessible 

Because saliva is quickly and easily collected, the new test can help decrease testing times and costs, the researchers said. 

“Wide-spread testing is critical for our control efforts. We simplified the test so that it only costs a couple of dollars for reagents, and we expect that labs will only charge about $10 per sample. If cheap alternatives like SalivaDirect can be implemented across the country, we may finally get a handle on this pandemic, even before a vaccine,” said Nathan Grubaugh, associate research scientist at Yale. 

Grubaugh said he expects labs to charge about $10 per sample.

"If cheap alternatives like SalivaDirect can be implemented across the country, we may finally get a handle on this pandemic, even before a vaccine," Grubaugh said, according to the Yale news release.

Since the start of the COVID-19 pandemic, many consumers have grown accustomed to wearing face masks and socially distancing when out in public. 

Now, researchers from Massachusetts General Hospital have found that following social distancing guidelines is an effective way to reduce the spread of coronavirus. Findings from their new study revealed that just a few weeks of staying physically distant can lower both the number of COVID cases and the number of related deaths. 

“Many have strongly suspected that physical distancing policies helped interrupt COVID-19 transmission during the early days of the U.S. epidemic,” said researcher Dr. Mark J. Siedner. “This study adds clear evidence to support those suspicions. The results show the timing of government-issued orders correlated strongly with reductions in both cases and deaths. In short, these measures work, and policymakers should use them as an arrow in their quivers to get on top of local epidemics where they are not responding to containment measures.” 

The benefits of staying physically distant

To gauge the efficacy of social distancing measures, the researchers analyzed nationwide data from the first five months of COVID-19. This included detailed state-by-state information on closures of everything from schools to local businesses. With this information, the researchers then tracked how the virus spread in each state, as well as the number of deaths occurred in each region. 

Overall, the study revealed that social distancing measures were effective in containing the spread of COVID-19. It didn’t take very long for such measures to prove their effectiveness: in less than one month, over 620,000 cases had been prevented. As daily case counts dropped, the number of coronavirus-related deaths also dropped while social distancing rules were implemented. 

The researchers explained that it’s impossible to know which -- if any -- of these closures were the most effective, as many states began closing public facilities around the same time. However, the numbers show that efforts to reduce the number of people in public spaces are effective when it comes to slowing the spread of coronavirus. 

Moving forward, the researchers hope that lawmakers can understand the significance of these findings and continue to put them into practice, especially as trends around the virus continue to change. 

“This is a case where past success does not predict future control,” said Dr. Siedner. “Until a vaccine is made available and widely deployed in an equitable fashion, we have few other options. Fortunately, our data shows that these measures work -- if we have the wherewithal to use them.” 

While other airlines are canceling routes and pulling back on sanitization efforts, Delta Air Lines continues to trudge forward with anti-coronavirus moves to keep both employees and customers healthy and safe onboard. 

Adding to its enforcement of facial coverings for all passengers, requiring travelers to certify that their health is in tip-top shape, and mandating that if a passenger can’t wear mask that they take a COVID-19 test, the airline is now testing nearly 100 percent of the airline’s workforce for the coronavirus by the end of the August. About half of Delta’s active employees have been tested so far.

“Our customers want to know that the people caring for them while traveling are healthy,” said Joanne Smith, Executive Vice President and Chief People Officer. “Providing COVID-19 testing for all of our people is an important action we can take to keep employees, their families and our customers safe, increasing confidence in travel while doing our part to slow and stop the spread of the virus.”

If a Delta employee tests positive

Delta argues that testing its entire 75,000-strong employee roster will reduce exposure to others and ensure that asymptomatic individuals have time to recover at home. To pull this off, Delta has brought in the Mayo Clinic to help develop a strategy based on tailored risk assessments. 

To help create a healthier workplace long-term and curb the rate of infection, the Mayo Clinic will also review and evaluate Delta’s health and safety practices on everything from infection prevention measures to workforce risk assessments. If one of Delta’s employees tests positive for COVID-19, they will be required to isolate at home for a minimum of 10 days while receiving full pay. 

For employees who have been exposed to others with COVID-19 but have not tested positive, they are required to remain out of the workplace for 14 days from the date of exposure. They will also receive full pay protection. 

Delta is also offering employees the option of being tested for COVID-19 antibodies at all of its major U.S. hubs and at more than 2,000 Quest Diagnostic locations nationwide – free of charge.

Delta’s efforts are paying off

While the rest of the world has been waiting for a vaccine or the launch of the newly approved quick-to-administer saliva test, Delta has been working hard to make sure anything a customer touches that’s related to the airline is as safe as possible. That effort seems to be paying off.

“The infection rate among our customer-facing employees is below the national average and shows that our Delta CareStandard measures are working,” Smith said. “While we're encouraged by our results, we know we can’t afford to let up now. Health experts agree that a multi-layered approach – one that includes testing, symptom-checking, mask-wearing, environmental cleaning and physical distancing – are the greatest inhibitors to spreading COVID-19 and will play a critical role in keeping our people safe in the weeks and months ahead.”

The U.S. Commerce Department has announced that it’s placing stricter trade restrictions on Huawei, Reuters reports. 

The government will be expanding restrictions imposed in May that prevents the Chinese telecom giant from obtaining semiconductors without a special license. The original rules left open a loophole that allowed Huawei to go through third parties or use other “evasive measures,” such as using commercially available products, Commerce Secretary Wilbur Ross told Fox Business 

“The new rule makes it clear that any use of American software or American fabrication equipment is banned and requires a license,” Ross said. 

Limiting Huawei access to chips

In a statement Monday, Secretary of State Mike Pompeo said “Huawei has continuously tried to evade” U.S. restrictions imposed in May. The Department has now added 38 Huawei affiliates to the nation’s banned entity list. 

“The Trump Administration sees Huawei for what it is – an arm of the Chinese Communist Party’s (CCP’s) surveillance state – and we have taken action accordingly,” Pompeo said in the statement. “We will not tolerate efforts by the CCP to undermine the privacy of our citizens, our businesses’ intellectual property, or the integrity of next-generation networks worldwide.”

“We are backing up our words with actions across the U.S. Government. The Department of Justice has indicted Huawei for stealing U.S. technology, conspiracy, wire fraud, bank fraud, racketeering, and helping Iran to evade sanctions, amongst other charges,” Pompeo added.

Apple is expanding a major portion of its repair program. On Monday, the company announced that its existing repair arrangement that allows independent repair shops to work on iPhones is now going to include Mac computers, as well.

While the company didn’t come right out and say it, COVID-19 had to have a play in the decision. When a consumer goes to Apple’s repair site, they’re confronted with a heads-up that “Apple support options are currently limited. Thank you for your patience and understanding.” 

Only last month, Apple announced plans to convert retail staff to online assistance in the face of the pandemic.

No more playing favorites

In Reuter’s reporting of the shift, Apple’s recasting of how repairs are handled comes after many years of complaints from right-to-repair groups that had criticized the company for playing favorites with companies like Best Buy. 

The biggest beef from those groups whas that Apple provided genuine parts and training manuals to them and completely cut others out of the picture. Another major complaint -- especially from smaller shops -- was that Apple’s repair authorization program demanded a commitment to a certain volume of repairs that they’d have a hard time honoring.

Apple’s strict standards didn’t stop others from pretending to be Apple-authorized, though. If a consumer is looking to replace a battery in their MacBook Pro and searches for “repair my Mac near me,” they’d be hit with a number of repair shops that say they can offer that service. 

However, when ConsumerAffairs checked out some of those shops, many didn’t show up in Apple’s database of Authorized Service Providers and Independent Repair Providers.

Hopefully, all that will change soon. With the enhancement of its independent repair program, Apple will begin distributing parts and providing free training courses to independent repair shops, giving them all the tools they need to perform out-of-warranty work.

Increases in home prices are accelerating because there still aren’t enough homes on the market, industry sources report.

Real estate broker Redfin tracked July sales and reports that the median home price rose 8.2 percent to $323,800. It’s the third record high in four months and has been driven in part by record-low mortgage rates. But the lack of inventory is also a major factor.

"The housing market is intense right now," said Jimmy Martinez, a Redfin agent in Albuquerque. "We've got about half as many homes for sale as there were at this time last year, met by a big surge in people moving here from across the country in addition to lots of local homebuyers, all of which has pushed prices up dramatically from last year."

By Redfin’s count, home prices are increasing at the fastest rate in more than two years. Prices are rising in all but one of the largest 85 housing markets that Redfin tracks. Honolulu, already one of the nation’s priciest markets, is the only metro where prices didn’t go up.

Meanwhile, the median sale price surged 16.8 percent in Birmingham, Ala., The price increased 16.5 percent in Bridgeport, Conn., and 14.3 percent in Fort Lauderdale.

Zillow confirms the price acceleration

In a separate report, real estate marketplace Zillow confirmed the price acceleration and reported that newly pending sales are up nearly 17 percent, suggesting demand could push prices even higher.

While new listings increased in July, Zillow’s housing experts say it wasn’t enough to keep up with demand. Inventory levels have fallen below where they were at this time in 2019.

Zillow reports that demand for homes is at a record pace. Newly pending sales are rising more than 1 percent from week to week. Homes that sold during the first week of August typically went under contract after 13 days, which is 11 days faster than during the same period last year and a new record low in Zillow data that dates back to the start of 2019.

Zillow found the fastest-selling large markets to be Cincinnati, Columbus, Kansas City, and Raleigh. In those markets, the average seller got a contract offer after the property was on the market for only four days.

Home prices are rising to the point that housing experts at the University of Arizona recently warned that today’s buyers may not be able to sell their property in the future. Millennials, many of whom are still paying off student loans, may not be able to afford a home if prices continue to rise.

The coronavirus pandemic has had a severely negative impact on homeowners in recent months. While mortgage rates have been very low in recent weeks, delinquencies have been spiking since the spring.

Unfortunately, that trend appears to be showing no sign of slowing down. In a recent survey, the Mortgage Bankers Association (MBA) reported that the delinquency rate for one-to-four-unit residential properties spiked to 8.22 percent. That represents an increase of 386 basis points since the first quarter of the year.

“The COVID-19 pandemic’s effects on some homeowner’s ability to make their mortgage payments could not be more apparent,” said MBA vice president of Industry Analysis Marina Walsh. “The nearly 4 percentage point jump in the delinquency rate was the biggest quarterly rise in the history of the MBA’s survey. The second quarter results also mark the highest overall delinquency rate in nine years, and a survey-high rate for FHA loans.”

Delinquencies may remain at high levels

Walsh notes that the states that have experienced the highest rate increases for mortgage delinquencies -- New York, New Jersey, Nevada, Florida, and Hawaii -- are also areas that rely heavily on the hospitality and leisure industries. This makes sense since many workers would have lost their jobs and income as travel came to a standstill and quarantine restrictions were put in place.

While there has been some recovery in the job market over the summer, Walsh says too many financial and health uncertainties are keeping homeowners on the backfoot. They may also be forced into a corner due to uncertainty about the prospect of more financial relief coming from the government.

“There is no way to sugarcoat a 32.9 percent drop in GDP during the second quarter,” she said. “Certain homeowners, particularly those with FHA loans, will continue to be impacted by this crisis, and delinquencies are likely to stay at elevated levels for the foreseeable future.”

While things may seem particularly dire for homeowners, Walsh says it’s important to note that there are factors working in their favor. 

“Fortunately, there are several mitigating factors that make this current spike in mortgage delinquencies different from the Great Recession. These factors include home-price gains, several years of home equity accumulation, and the loan deferral and modification options that present alternatives to foreclosure for distressed homeowners,” Walsh said. 

Consumers can find more information about the MBA’s survey findings by visiting its website here.