Mortgage loan application volume surprised no one with another week of declines, accompanied by the 10th consecutive week of rising interest rates, according to the Mortgage Bankers Association’s weekly survey. Interest rates finally topped the dreaded 7% mark, reaching 7.16%. This is their highest point since 2001. The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped by 1.7%. Application activity is at its slowest pace since 1997. The adjusted purchase index fell 2%, while the unadjusted purchase index decreased by 3% and was 42% lower YOY. Purchase applications are now at their slowest pace since 2015, 40% slower than a year ago. “Despite higher rates and lower overall application activity, there was a slight increase in…
By CHUCK GREEN During the pandemic homebuyers fled to southern states for warmer weather but now would-be purchasers are bailing out of deals at a faster clip than anywhere in the country. According to analysts at Redfin, 60,000 deals were called off nationally in September. That’s 17% of the homes that went under contract that month. In Florida, Jacksonville had 745 home-purchase agreements fall through, equal to 30.3% of homes that went under contract. That was the highest percentage among the metros Redfin analyzed. They were followed by San Antonio, TX (25.3%), Atlanta, GA (25%), Orlando, FL (24.6%), and Tampa, FL (24.5%). In August, about 800 home purchase agreements were tabled in Jacksonville. That’s 26.1% of homes that went under contract…
Interest rates have dampened demand for mortgages, but some areas remain prime opportunities for lenders, according to a new study from TransUnion. The study, “Where Will Growth In Mortgage Originations Come From?,” analyzed the credit-active U.S. population between Q2 2017 and Q1 2022. It flagged consumers with a variety of traits, such as VA eligibility and income status, who withdrew their applications or may have been turned down for a mortgage. The results showed mortgage-qualified consumer segments that have “purchase origination potential.” Of the approximately 121 million low- and moderate-income (LMI) consumers studied, 95% were credit eligible for a mortgage. Buyers should have at least a 620 credit score when applying for a conventional loan. 86% of VA-eligible consumers were…
By KIMBERLEY HAAS The vice president of research at the National Multifamily Housing Council says 4.3 million new apartments will be needed by 2035 to meet demand. Caitlin Walter spoke at the National Association of Real Estate Editors conference on October 13. She is primarily responsible for conducting NMHC’s research on apartment industry trends, according to the council’s website. Walter said there were 737,000 apartments under construction in 2021. “The issue is that it takes a long time to build an apartment community, and we’re not actually seeing those under-construction numbers turn into completions. And that is largely due to the delays that started during the pandemic that have continued to persist,” Walter said. Walter referred to a study the…
Rocket Pro TPO’s executive vice president recently turned heads with an opinion piece claiming United Wholesale Mortgage represents a massive threat to America’s mortgage brokers and their future independence. In the piece called “America’s Mortgage Brokers Face an Unprecedented Threat to their Independence,” Austin Niemiec said leaders at UWM have reduced broker optionality by contractually forcing their brokers to choose between Rocket Mortgage and UWM, enforcing that same “ultimatum” contract to eliminate a UWM broker from brokering to Fairway Independent Mortgage, and engaging in a price war to eliminate the competition. “If Mat Ishbia and UWM were truly committed to the real kind of competition that benefits brokers and their clients, he wouldn’t use his lawyers to take away brokers’ options, and he wouldn’t celebrate the demise of other…
New home mortgage applications dropped sharply in September as buyers backed away from decades-high interest rates. The Mortgage Bankers Association’s Builder Application Survey for September 2022 found that applications for new home purchases fell 13.2% YOY and 7% from August. Based on that data, MBA predicts that new single-family home sales ran at a seasonally adjusted rate of 637,000 in September. “New home purchase activity declined in September as prospective homebuyers pulled back in response to higher mortgage rates, increased concern about an impending recession, and a broader slowdown in home-price growth,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The average 30-year fixed mortgage rate increased almost a full percentage point in the last month, greatly reducing…
Most Americans want their parents to age comfortably in their own homes, but it can be a challenge for both families and the housing market. Three out of four adults want their parents to be able to age in their own homes, but more than half of Gen Xers don’t feel financially prepared to assist their parents in old age, according to a new study from American Advisors Group. AAG surveyed 1,500 adults aged 40-55 who have senior parents. “The retirement savings crisis is real, and many Gen X adult children are telling us that caring for their parents will be extremely difficult and potentially unattainable,” said Eddie Herda, AAG VP of Brand Strategy. Herda said there is interest in…
After shrinking slightly the week prior, mortgage rates shot back up last week to a 20-year high, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 6.92%, up from 6.66%. A year ago at this time, the 30-year FRM averaged 3.05%. “Rates resumed their record-setting climb this week, with the 30-year fixed-rate mortgage reaching its highest level since April of 2002,” said Sam Khater, Freddie Mac’s Chief Economist. “We continue to see a tale of two economies in the data: strong job and wage growth are keeping consumers’ balance sheets positive, while lingering inflation, recession fears, and housing affordability are driving housing demand down precipitously. The next several months will undoubtedly be important…
Despite an upwardly revised Q3 GDP estimate, Fannie Mae’s Economic & Strategic Research Group has predicted a recession in 2023 and warned it could be worse than expected. The group estimates Q3 GDP will be 2.3% annualized, up from its earlier prediction of 1.3%. However, it says that the boost “is likely to prove temporary” and forecasts Q4 growth to be -0.7% annualized. The revision accounts for “partial normalization in global trade following a historically large trade deficit in the first half of 2022,” which will be overcome by Q4. Unemployment is expected to exceed 5% by the end of 2023 as a result of the recession. The group noted that labor market tightness– which typically contributes to inflationary pressure…
By KIMBERLEY HAAS The global chair of The Counselors of Real Estate says inflation and interest rates are this year’s leading concerns of his 1,000-member organization. At the National Association of Real Estate Editors conference at The Westin Buckhead in Atlanta, GA, William McCarthy said everyone they talk to wants to know about inflation and interest rates. The Counselors of Real Estate is an international consortium of commercial property advisors which has posted a top ten list of issues affecting real estate for 11 years. “Inflation dictates interest rates. Interest rates dictate inflation,” McCarthy said. McCarthy told the crowd they have some questions about the current interest rate narrative. “Interest rates are supposed to go up a little bit more, level,…
