Job Cuts Hit The Mortgage Industry

By CHUCK GREEN An apparently not so uncommon sight these days in the mortgage industry: empty desks. Not that their occupants are taking five for a foam latte. Instead, they might well have either been steeped in the pink slip blues or were compelled to submit their resignation. Over the past three months in the industry, there have been more than 3,500 job cuts, according to globalsg.com. In February, Bloomberg reported U.S. home mortgage lenders might have no other choice during the coming months that to initiate layoffs. Similarly, earlier this month, wolfstreet.com reported that not only are layoffs among mortgage lenders taking place, but they will also continue. “Layoffs and forced resignations are certainly imminent in the mortgage banking…

Eco-Friendly Homes Sell For More Money And Faster Than Similar Homes

Homes with eco-conscious features can sell faster and for more money than similar homes without them, a new analysis from Zillow found. Zillow looked at environment-related features mentioned in listing descriptions for 3.1 million home sales in 2020 and 2021. The analysis found that homes featuring electric vehicle chargers and drought-resistant landscaping can sell nine days faster than similar homes.  Features that protect against climate-related disasters such as hurricane shutters can sell for as much as 2.4% more than expected. Energy-efficient features can also help homes sell for more money and sometimes faster, with listings that mention solar panels selling for 1.4% more and listings including smart sprinkler systems and smart lights selling up to six days faster than expected.…

Fannie Mae HPI Rises To Fastest Pace On Record

The Fannie Mae Home Price Index (FNM-HPI) rose to its fastest annual pace ever on record in Q1 2022, measuring 20% YOY, the company reported. This is up from an annualized rate of 19.1% in Q4 2021, the fastest pace in the index’s 47-year history. Seasonally adjusted home prices rose 4.8% from last quarter. The FNM-HPI is a national, repeat-transaction home price index that measures average quarterly price change on all single-family properties in the U.S., excluding condos. The FNM-HPI will now be publicly available as a quarterly series with a start date of Q1 1975. “We’re pleased to begin sharing the Fannie Mae Home Price Index with external audiences. We have long used this index within the company, including…

March Home Sales Dropped 4% From Feb, Sign Of A Potential Slowdown

Home sales dropped by 4% last month and 8% YOY, closing out a fast-paced March with signs of a potential cooldown, Redfin reported. Homes sold at their fastest pace ever and for more above list price than any other March in history. The median home-sale price rose 6.2% to $412,700, a record high and the fastest month-over-month gain for this time of year since 2013. But seasonally adjusted home sales fell 4% thanks to severe inventory shortages, rising rates, and accelerating home prices. Seasonally adjusted active listings—the count of all homes that were for sale at any time during the month—fell 13% YOY to an all-time low. “Although pricey coastal markets began showing early signs of a slowdown in late…

Mortgage Rates Average 5%

Mortgage rates averaged 5% flat last week, up from 4.72%, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5%. A year ago at this time, the 30-year FRM averaged 3.04%. “This week, mortgage rates averaged five percent for the first time in over a decade,” said Sam Khater, Freddie Mac’s Chief Economist.  “As Americans contend with historically high inflation, the combination of rising mortgage rates, elevated home prices and tight inventory are making the pursuit of homeownership the most expensive in a generation.” Home prices continue growing despite hope for a cool down this year due to mortgage rate increases pricing many out of the market and reducing competition. For…

CRE Price Growth “Has Room To Run”, FirstAm Predicts

Commercial real estate (CRE) price growth may keep outpacing CRE income growth, suggesting property values may not have reached their cyclical peak, according to First American’s Potential Capitalization Rate (CPR) Model for Q4 2021. First American’s PCR estimates capitalization rates using historical data for interest rates, rental income, occupancy rates, debt, and recent property price trends. In Q4 2021, the actual cap rate hit a record low of 5.2% while the potential cap rate sank to 4.4%. When the actual cap rate is significantly above the potential cap rate, as was the case in the fourth quarter of 2021, the model suggests that the CRE market can support a lower cap rate. The National potential cap rate was 4.4%, down…

Loan Applications Fall Again As Rates Exceed 5%

Mortgage loan application volume fell another 1.3% last week, the Mortgage Bankers Association’s (MBA) weekly survey shows. The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped by 1.3%. The adjusted purchase index rose by 1%, while the unadjusted purchase index rose by 2% and was 6% lower YOY. The refinance index fell 5% and was down 62% YOY. Refinances made up 37.1% of total applications, down from 38.8%. The 30-year fixed-rate hit 5.13%, the highest since November 2018, resulting in refis falling to their slowest weekly pace since 2019. “Higher rates are increasing borrower interest in ARMs. Their share of applications last week was at 7.4%, which was the highest share since June 2019,”  said Joel…

Delinquencies Hit Lowest Rate Since January 1999

Delinquencies dropped again in January to their lowest rate since at least January 1999 thanks to home price appreciation and the strong jobs market, according to CoreLogic’s monthly Loan Performance Insights Report for January 2022. Only 3.3% of all U.S. mortgages were in some stage of delinquency, a 2.3% drop YOY. January marked the tenth straight month of annual declines. Early-stage delinquencies (30 to 59 days past due) accounted for 1.2% of mortgages, down from 1.3% the year prior. Adverse delinquencies (60 to 89 days) were down from 0.5% in January 2021 to 0.3%.  Serious delinquencies (90 days, including loans in foreclosure) were down from 3.8% to 1.8%. Serious delinquencies hit a record high of 4.3% in August 2020. CoreLogic…

Rate Lock Activity Rose In March

Rate lock activity rose in March as homeowners move before rates rise further, according to Black Knight’s latest Originations Market Monitor report. Mortgage rates exceeded 4.9% in March but dropped at the end of the month to 4.79%. The spread between mortgage rates and 10-year Treasuries climbed 20 basis points. “Mortgage interest rates spiked in March, with 30-year offerings climbing 70 basis points over the course of the month,” said Scott Happ, president, Optimal Blue, a division of Black Knight.  “And yet, despite seeing the fastest one-month rise in rates in nearly 13 years, we saw purchase lock volumes increase by 31% from February – likely as prospective buyers moved to lock in their loans before rates climbed any higher.”…

IMB Profits Fell In 2021, Layoffs Loom Heading Into 2022

After a record-breaking year for independent mortgage banks, profits declined by 75 basis points in 2021, according to the Mortgage Bankers Association’s (MBA) Annual Mortgage Bankers Performance Report. Independent mortgage banks and mortgage subsidiaries of chartered banks made an average profit of $2,339 on each loan they originated in 2021, down from the record $4,202 per loan in 2020. Average production volume totaled $4.9 billion per company, up from $4.5 billion in 2020. But production expenses took a toll on profits, reaching their highest level since 2008, the first year of MBA’s report. Personnel expenses for sales, fulfillment, and production support all rose while revenues fell. “2021 was another stellar year for independent mortgage bankers, with production profits well above…