The last two weeks of 2023 brought a slump in mortgage applications as buyers continue to grapple with affordability.
The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – fell 9.4% from the two weeks prior. The data includes adjustments for the holidays.
Adjusted purchase applications dropped by 5%, while the unadjusted index fell 34% and was 12% lower YOY.
Americans appear to be losing interest in falling rates, which initially sparked some activity in the market. The 30-year fixed ended the year at 6.76%, ticking up very slightly from the week prior but still down more than a full point from its October peak.
MBA Vice President and…
By ERIN FLYNN JAY
A bicameral bill that would force hedge funds out of the single-family home market is supported by some industry leaders.
Last month, U.S. Sen. Jeff Merkley (D-OR) and U.S. Rep. Adam Smith (D-WA) introduced the End Hedge Fund Control of American Homes Act of 2023. If passed, it would force hedge funds to sell at least 10% of the total number of single-family homes they currently own to homebuyers every year for a 10-year period.
After a 10-year full phase-out, all hedge funds will be completely banned from owning any single-family homes.
In a YouTube video, Merkley said rents are sky-high and families can’t afford to buy a home in their chosen community.
“Hedge funds and…
By ERIN FLYNN JAY
As 2023 comes to a close, industry leaders say there were some highs, but leaving this year behind won’t be a problem for many mortgage professionals.
ATTOM CEO Rob Barber said in the spring, as the peak homebuying season heated up, lenders nationwide enjoyed their first quarterly increase in mortgage activity after eight consecutive declines dating back to early 2021.
“The second-quarter rebound was huge as total loans shot up 22%. The spike was powered by across-the-board, double-digit gains in purchase, refinance, and home-equity credit line deals,” said Barber.
But the turnaround was quick lived, he said, as the numbers went back down in the third quarter, with overall activity decreasing by 3%. Only refinance lending…
By DESMOND LACHMAN
Rudi Dornbusch, the late MIT economist, famously observed that economic and financial crises take longer to arrive than you can possibly imagine, but when they do come, they happen faster than you can possibly imagine.
Next year, Mr. Dornbusch’s warning could again prove to be prophetic as far as the commercial real estate sector and the regional banks are concerned. To be sure, four years on since 2020’s Covid pandemic upended the commercial property market, we have yet to have a full-blown financial crisis. However, next year could be the year when the commercial real estate market and the regional banks unravel at a faster pace than we thought possible.
At the heart of the commercial property…
By ERIN FLYNN JAY
As artificial intelligence plays an increasingly important role in the mortgage business, industry leaders are figuring out ways to harness its power to revolutionize homebuying.
Dan Weisman, director of innovation strategy at the National Association of Realtors, said AI brings enhanced automation, efficiency, and transparency to the process. People who can effectively use it have the chance to dominate the landscape in 2024.
“With artificial intelligence rapidly entering our lives faster than most could imagine, the industry has opportunities to improve analyzing market trends, assessing credit risk, and ensuring regulatory compliance, which will lead to a more tailored lending experience,” Weisman said in a recent interview with The Mortgage Note.
For example, JPMorgan Chase is developing…
By CHUCK GREEN and KIMBERLEY HAAS
The full impacts of legal actions being taken against the National Association of Realtors are still not clear, but industry leaders are advocating for agents, saying they offer valuable expertise.
In October, a Missouri jury ordered the association and two of the nation’s biggest real estate brokerages to pay almost $1.8 billion in damages after they found that commissions were artificially inflated to pay agents. Fresh off winning the verdict, attorneys for the plaintiffs filed a new lawsuit seeking class-action status covering anyone in the country who sold a home in the last five years.
NAR’s President Tracy Kasper said in a statement at the time that they will appeal the liability finding, and…
By KIMBERLEY HAAS
As consumers turn to mortgage professionals they can trust in their communities, it is predicted that more industry leaders will depend on a retail model to make the most out of the market.
Joe Ludlow, vice president of sales at Advantage Systems, Accounting for Mortgage Bankers, and ApprovalSoft in California, made note of the potential trend during a recent interview with The Mortgage Note.
Ludlow said since it is getting harder for potential homebuyers to get approved for a loan, they are seeking out a local professional to help with the process. As a result, bank branches and loan officers with a desk there are popular again.
“Branches now are becoming more important. Loan officers are becoming…
By KIMBERLEY HAAS
With just weeks left before the Iowa caucus and the presidential primary in New Hampshire, home affordability is weighing on the minds of voters and at least one leading economist says the issue could take center stage as the race for the White House heats up.
Daryl Fairweather, chief economist for Redfin, has said that President Joe Biden will be forced to make home affordability a cornerstone of his reelection bid.
“Even though the overall economy is strong, high housing costs are making many Americans feel poor,” Fairweather said in her recent release on housing predictions for 2024.
“Home prices are up more than 20% since President Biden took office. That’s a problem for his re-election bid:…
By ERIN FLYNN JAY
In some urban centers like New York City, Los Angeles, and Miami, Opportunity Zones have led to substantial investments including the revitalization of neighborhoods. These zones attracted developers and investors due to the tax benefits, resulting in new housing developments, commercial spaces, and infrastructure improvements.
However, concerns have arisen about the displacement of existing residents and whether the benefits truly reach the communities that need them most. And while these zones have found success in urban settings, many rural regions have struggled to attract significant investment.
Limited infrastructure, a smaller workforce, and higher perceived risks have made it challenging to draw investors to rural areas. That hurts the low-income neighborhoods Opportunity Zones are meant to strengthen.…
By PATRICK LAVERY
Saying he and the Federal Open Market Committee were “proceeding carefully,” Federal Reserve Board Chairman Jerome Powell announced that they voted unanimously Wednesday to leave its policy interest rate unchanged for a third straight meeting.
This ensures that after more than a year of incremental hikes that eventually saw the key rate spike 5 1/4 percentage points dating back to the beginning of 2022, the target range will, for now, remain at 5.25% to 5.5%.
Most experts do not expect the FOMC to start bringing the rate back down again until the third quarter of 2024, owing that to Powell and the Fed’s continuing mandate to bring inflation down to 2%.
Total Personal Consumption Expenditures prices rose…
