Musk Predicts Home Value Declines Due To CRE Weakness

Elon Musk expects home values to tank in the coming year, spurned by weakness in the commercial real estate market. The tech billionaire tweeted “Commercial real estate is melting down fast. Home values next,” in response to a tweet about the market from Craft Ventures founder David Sacks. Commercial real estate is having a tough moment in a high-rate, high-price environment. The Federal Reserve has called CRE weakness a possible risk to the U.S. financial systems. “[T]he magnitude of a correction in property values could be sizable and therefore lead to credit losses,” officials wrote in a report. JPMorgan has estimated that around $450 billion in commercial real estate loans due to expire this year could default, while Morgan Stanley…

Pending Home Sales Saw No Change In April

April brought no change in pending home sales, according to the National Association of Realtors. NAR’s Pending Home Sales Index remained at 78.9 in April, the same reading as in March. An index of 100 is equal to the level of contract activity in 2001. Year-over-year, pending sales dropped by 20.3%. “Not all buying interests are being completed due to limited inventory,” said NAR Chief Economist Lawrence Yun. “Affordability challenges certainly remain and continue to hold back contract signings, but a sizeable increase in housing inventory will be critical to get more Americans moving.” Analysts differ on when inventory will be correct. ATTOM Data’s Rick Sharga told Bankrate not to expect a big inventory boost anytime soon. But Robert Johnson,…

Capitol Hill News Pushes Rates Up

Mortgage rates increased again last week due to a heap of political and financial news. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.57%, up from 6.39% the week prior. A year ago at this time, the 30-year FRM averaged 5.10%. The 15-year fixed-rate mortgage rose from 5.75% to 5.97%. A year ago, it averaged 4.31%. Daily average rates even exceeded 7% on May 25, hitting their highest level since November. “The U.S. economy is showing continued resilience which, combined with debt ceiling concerns, led to higher mortgage rates this week,” said Sam Khater, Freddie Mac’s Chief Economist.  At the current rate, 6.57%, Redfin reported that the typical buyer’s monthly mortgage payment amounts to $2,614, a…

Delinquencies Fall To Record Low

The overall mortgage delinquency rate fell to a record low in March, according to new data from CoreLogic. Just 2.6% of all mortgages in the U.S. were in some stage of delinquency, down 0.3% from March 2022 and 0.4% from the month prior. This is the lowest level ever recorded. CoreLogic chalks it up to the country’s unemployment rate, which is at a 50-year low.   Serious delinquencies in particular benefitted, down 1.5% YOY to 1.1% of all mortgages, a 23-year low. Early-stage delinquencies (1.1%) and adverse delinquencies (0.3%) were unchanged YOY. The share of mortgages in some stage of foreclosure (0.3%) and the share that transitioned from current to early-stage (0.5%) were also unchanged from the same time last…

Sellers Try To Bait Buyers With Concessions

As buyers shy away from a pricey market, more sellers are hoping concessions will help them move their house. A new report from Redfin found that home sellers gave concessions to buyers in 42.9% of U.S. home sales during the three months ending April 30. This is up from 25.5% at the same time last year but below February’s all-time high of 45.6%.  Concessions can include money toward repairs, closing costs, and mortgage-rate buydowns. About one in five homes sold for less than the asking price along with a concession. Redfin analysts say seasonality is the reason concessions dropped off, as more buyers typically enter the market in spring, giving sellers an edge. But the high-rate, high-home price environment kept…

May Slump: Mortgage Applications Down Again

Mortgage applications fell again last week as borrowers recoil in the face of rising rates. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – decreased by 4.6%, adding to last week’s drag. Adjusted purchase applications fell by 4%, while the unadjusted index was down 5% from the week before and 30% lower YOY. The average interest rate for 30-year fixed loans rose from 6.57% to 6.69%, the highest level since March. “Since rates have been so volatile and for-sale inventory still scarce, we have yet to see sustained growth in purchase applications. Refinance activity remains limited, with the refinance index falling to its lowest level in two months…

Home Sales Bested Expectations In April

After revising estimates back to January, April brought an increase in new residential sales, according to new data from the U.S. Census Bureau and the Department of Housing and Urban Development. Sales rose by 4.1% to a seasonally adjusted annual rate of 683,000, compared to March’s 656,000, revised down from 683,000. Sales were up 11.8% from the same time last year, which saw an annualized rate of just 611,000. The seasonally‐adjusted estimate of new houses for sale was 433,000, representing a supply of 7.6 months at the current sales rate. The numbers are surprising, as analysts had expected a decline. The likeliest culprit is continuing stock shortages. New home sales have soared as existing inventory dwindles but buying a newly…

Learn More About The Construction Lending Market With CEO Brian Mingham

The CEO of a national end-to-end risk mitigation company says their platform opens doors to lenders that want to enter the construction market. Leaders at CFSI Loan Management in Colorado say that at most lending institutions, construction loans make up less than 10% of originations due to the challenges and complexities of managing these transactions. The company has completed more than 150,000 project inspections, 50,000 funding draws, and 25,000 project feasibility reviews. More than $15 billion in construction projects are being managed through CFSI’s construction lending platform, according to a press release. Brian Mingham, founder and CEO of the company, was working in the mortgage business when the idea for CFSI was conceived. He says he saw the value in…

Rates Reverse Course

After falling slightly the week before, mortgage rates shot right back up last week, continuing to fluctuate within the 6% range. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.39%, up from 6.35% the week prior. A year ago at this time, the 30-year FRM averaged 5.25%. The 15-year fixed-rate mortgage remained unchanged at 5.75%. A year ago, it averaged 4.43%. “The 30-year fixed-rate mortgage averaged 6.39% this week, as economic crosscurrents have kept rates within a ten-basis point range over the last several weeks,” said Sam Khater, Freddie Mac’s Chief Economist.  “After the substantial slowdown in growth last fall, home prices stabilized during the winter and began to modestly rise over the last few months.…

Atlanta Named Top Spot For College Grads

By KIMBERLEY HAAS Professional opportunities, affordability, and fun in the country’s cities are being measured as commencement ceremonies wrap up nationally and Atlanta is coming out on top as the best place for college graduates to move to. Earlier this week, WalletHub named Atlanta, Georgia, the best city to start a career after comparing the relative market strength and overall livability of 182 cities using 26 key metrics ranging from the monthly average starting salary to housing affordability. Atlanta did well in the WalletHub ranking because of the availability of entry-level jobs and its low unemployment rate. On May 2, CoworkingCafe named Atlanta the best city to start a career with a bachelor’s degree. The underlying analysis took into account…