Mortgage Lending Plummeted In Q4 2023

Mortgage brokers felt the burn in the last three months of 2023, with residential lending across the board stalling. A new report from ATTOM found that 1.35 million residential mortgages were originated in Q4 2023. That’s a 13.8% drop from Q3, and the tenth decline in the last eleven quarters. Residential lending activity overall was down 16.5% YOY, with purchases, refinances, and home equity loans all taking a hit.  Compared to the boom of Q1 2021, activity is down more than 67%. “Multiple powerful forces continued to conspire against the mortgage industry during the fourth quarter, slicing back huge portions of their business,” said Rob Barber, CEO at ATTOM. “There were signs during the peak buying season of 2022 that…

Rates Up For A Fourth Week, Skirting 7%

Mortgage rates inched up to a two-month high last week, putting pressure on hopeful spring homebuyers. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.94%, up from the week prior’s 6.90%. A year ago at this time, the 30-year FRM averaged 6.65%. This is the fourth consecutive week of increases. The 15-year fixed fell, however, to 6.26% from 6.29%. A year ago, it averaged 5.89%. “The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying,” said Sam Khater, Freddie Mac’s Chief Economist. “While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges…

Pending Home Sales Fell Off In January

Pending home sales contracted in January as rate-sensitive buyers skipped out despite increasing inventory. NAR’s Pending Home Sales Index fell by 4.9% month-over-month to a reading of 74.3 in January. An index of 100 is equal to the level of contract activity in 2001. Year-over-year, they were down 8.8%. “The job market is solid, and the country’s total wealth reached a record high due to stock market and home price gains,” said NAR Chief Economist Lawrence Yun. “This combination of economic conditions is favorable for home buying. However, consumers are showing extra sensitivity to changes in mortgage rates in the current cycle, and that’s impacting home sales.” All four U.S. regions saw declines in year-over-year sales, while month-over-month sales actually…

Applications Down For Another Week

Mortgage applications fell for another week as rates remained above 7% and high home prices kept buyers on the bench. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – decreased by 5.6%, piling onto the week prior’s 10.6% dip. Adjusted purchase applications slipped by 5%, while the unadjusted index was down by 1% and was 12% lower YOY. Rates shot moved down slightly but not by much, coming in at 7.04%. MBA’s SVP and Chief Economist Mike Fratantoni noted that this is about a quarter percentage point above the beginning of the year. “Higher rates in recent weeks have stalled activity, and last week it dropped more for…

Home Prices Hit Seventh Straight All-Time High In December

Home prices rose month-over-month and YOY after seasonal adjustment in December, sending the cost of homebuying soaring. Prices were up 5.5% YOY, an increase from November’s 5% gain, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index.  San Diego reported the highest annual gains at 8.8%, followed by Los Angeles and Detroit, each seeing an 8.3% increase. Portland showed a 0.3% increase this month, the smallest YOY growth. This data places U.S. home prices at a new all-time high, the seventh straight record high of 2023. “2023 U.S. housing gains haven’t followed such a synchronous pattern since the COVID housing boom. The term ‘a rising tide lifts all boats’ seems appropriate given broad-based performance in the U.S. housing…

New Home Sales Improved YOY But Fell Short Of Expectations

New home sales improved YOY in January despite elevated rates and higher prices, though didn’t hit the mark on analysts’ expectations. That’s according to data from the U.S. Census Bureau and the Department of Housing and Urban Development, which reported sales up by 1.5% from December to a seasonally adjusted annual rate of 661,000, a jump from the month priors’ revised rate of 651,000. New home sales were up 1.8% from the same time last year. While the report is good news, the numbers fell short of experts’ predictions. A survey of economists by Bloomberg predicted a rate of 684,000. There were 456,000 new homes for sale at the end of the month. This represents an 8.3-month supply at the…

Cheap Southern States Netted Migrants Post-Pandemic

Location influenced interstate migration after the pandemic, but price moved people the most. According to a new report from LendingTree, the states that netted the most new residents from 2021 to 2022 were cheaper Southern states. Florida and Texas led the pack, netting 249,000 and 174,000 new residents, respectively.  “Florida is an often affordable state where there’s typically a lot to do, plenty of places to eat, and year-round warm weather,” LendingTree senior economist Jacob Channel noted. He also noted that popular Southern states aren’t migration hotspots because they’re perfect. “Florida isn’t some sort of perfect utopia where everyone should live. The state has plenty of problems, and if it doesn’t start putting more effort toward supporting lower-wage workers and…

Rates Averaging Close To 7%

Mortgage rates aren’t going down as the spring homebuying season rapidly approaches. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.90%, up from the week prior’s 6.77%. A year ago at this time, the 30-year FRM averaged 6.50%. The 15-year fixed jumped to 6.29% from 6.12%. A year ago, it averaged 5.76%. “Strong incoming economic and inflation data has caused the market to re-evaluate the path of monetary policy, leading to higher mortgage rates,” said Sam Khater, Freddie Mac’s Chief Economist.  “Historically, the combination of a vibrant economy and modestly higher rates did not meaningfully impact the housing market. The current cycle is different than historical norms, as housing affordability is so low that good economic…

Existing Home Sales Rebounded In January

Existing-home sales rebounded from a December plummet in January, increasing month-over-month, but not annually. Sales increased by 3.1% to a seasonally adjusted annual rate of 4.00 million, according to the latest data from the National Association of Realtors. They were down 1.7% from the same time last year, however. The Midwest, West, and South all saw sales increase, while the Northeast held steady but didn’t decline. This is a turnaround from December, which saw existing sales shrink to their lowest point since 1995. “While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” said NAR Chief Economist Lawrence Yun. “Listings were modestly higher, and home buyers are…

Flippers And Rental Owners Have Different Attitudes About Investment Potential

By ERIN FLYNN JAY When it comes to investment properties, both fix-and-flip investors and rental property owners stand to make money this year, but their outlooks are vastly different. According to the Winter 2023 Investor Sentiment Survey from RCN Capital, conducted by market intelligence firm CJ Patrick Company, 50% of flippers felt things were better today than last year, and 51% expected things to improve over the next six months. In comparison, only 20% of rental property owners felt conditions were better today, and 22% expected things to improve over the next six months. Overall, after jumping from 30% to 39% in the Fall Survey, investor optimism was basically flat with 40% of the respondents saying the environment for investing…