By SCOTT KIMBLER Three leaders in the mortgage industry recently got together to discuss the challenges for lenders in 2023. A webinar was hosted by Augie Del Rio, founder and CEO of Gallus Insights. It included Rob Chrisman, capital markets consultant and founder of the Chrisman Commentary, as well as Tammy Richards, CEO of LendArch. All three lending veterans had various thoughts on what mortgage lenders need to do to not only survive in the current volatile mortgage market but also thrive in the down economy. “We are experiencing one of the most significant downturns in decades,” Del Rio said. “We are kind of all at the crossroads of the perfect storm. We are experiencing the fastest rising rate environment…
Existing-home sales dropped for the eleventh straight month in December, down 1.5% from November and 34% YOY, according to the latest data from the National Association of Realtors. Sales fell to a seasonally adjusted annual rate of 4.02 million from 4.09 million the month prior. Three of the four major regions saw declines month-over-month, though the West’s sales were unchanged from November. All four regions saw annual declines. “December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates,” said NAR Chief Economist Lawrence Yun. “However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.” The 30-year fixed rate fell to 6.15% last week. Limited…
The 30-year fixed rate continued to slip last week, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 6.15%, down from 6.33% the week prior. A year ago at this time, the 30-year FRM averaged 3.56 percent. The 15-year fixed-rate mortgage fell from 5.52% to 5.28%. A year ago, it averaged 2.79%. “As inflation continues to moderate, mortgage rates declined again this week,” said Sam Khater, Freddie Mac’s Chief Economist. “Declining rates are providing a much-needed boost to the housing market, but the supply of homes remains a persistent concern.” Housing construction slid in December to a five-month low. Residential starts fell 1.4% from November to an annualized rate of 1.38 million, while…
Housing construction slid again in December to its lowest point since July, but an increase in single-family starts may signal improvement to come. Residential starts fell 1.4% from November to an annualized rate of 1.38 million, down 21.8% from the same time last year, according to data from the U.S. Census Bureau. This is the fourth consecutive decline for these data. It was driven largely by a dip in multifamily construction, which is volatile month to month. The picture for all of 2022 was fairly bleak. In the entire year, only 1 million homes were started, down 10.6% from 2021 and the largest drop since 2009. Permits for new homes fell 1.6% to a rate of 1.33 million. Single-family permits…
Mortgage loan application volume saw a double-digit increase last week as sinking rates led to a purchase demand rebound. The Mortgage Bankers Association’s weekly survey showed the adjusted Market Composite Index, a measure of mortgage loan application volume, jumped by 27.9%. Purchase demand increased at a seasonally adjusted rate of 25% and an unadjusted rate of 32%. Though it remains 35% below last year’s levels, the increase is good news for brokers whose businesses have been impacted by affordability issues and high rates. Mortgage rates fell to 6.23% last week. “Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall,” said Mike Fratantoni, MBA’s SVP and Chief…
By CHUCK GREEN Next time you run into someone in the local Starbucks who happens to have their home on the market, be a sport and plop an extra scone into their bag, huh? A little butter and jam, too? After all, sellers probably aren’t riding the wave of a sugar high induced by whatever they will pocket in their real estate transactions as experts say the price of an average home in the United States is decreasing. The cities expected to be the most heavily hit include: San Francisco: -10.36% Seattle: -9.55% San Diego: -7.24% Los Angeles: -5.61% Denver: -5.60% Dallas: -4.34% Portland: -4.25% Las Vegas: -3.69% What is contributing to the drop in housing prices? B. George Ratiu,…
Annual single-family home price growth dipped from Q3 2022 to Q4 2022, according to Fannie Mae’s Home Price Index. Prices rose by 9.2% YOY in Q4, down from 13.1% in Q3. They increased just 0.2% quarter-over-over when seasonally adjusted, and fell 1% unadjusted. The index measures the average quarterly price change for all single-family properties in the United States, excluding condos. “The rise in mortgage rates over the past year and record inflation have constrained the purchasing power of prospective homebuyers. The resulting affordability pressures are evident in the home price declines of the past two quarters, along with the downturn in home sales,” said Mark Palim, Fannie Mae Vice President and Deputy Chief Economist. Demand has dwindled as many…
The pace of home sales has declined to its slowest pace since the beginning of the pandemic, but buyers are slowly starting to search for homes again. According to a new report from Redfin, the typical home sold during the four weeks ending January 8 was on the market for 44 days, the longest period since April 2020. The slowdown resulted in the largest YOY inventory increase in Redfin’s data history. Pending home sales fell by 32% YOY to their lowest recorded level, while mortgage purchase applications dipped to their lowest point since 2014. But early signs of demand like online home searches and tour requests are increasing. Redfin’s Homebuyer Demand Index rose by 6% as buyers watch interest rates…
Wells Fargo’s net earnings dropped in Q4 2022, pushed down by a settlement and the pressures of a shrinking economy. The bank announced that its net income fell to $2.86 billion, or 67 cents a share. This is half of its profits from the same time last year, which came in at $5.75 billion, $1.38 per share. Leaders at Wells Fargo noted that the decline was driven by the fall-off in mortgage demand. Its home lending was down 57% from Q4 2021. The bank announced this week that it is narrowing its home lending business, exiting the correspondent lending channel and shrinking its servicing portfolio. This move will force a round of layoffs, but it is unclear how many jobs…
The 30-year fixed rate dipped last week after inching up in the first weeks of the new year, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 6.33%, down from 6.48% the week prior. A year ago at this time, the 30-year FRM averaged 3.45 percent. The 15-year fixed-rate mortgage fell from 5.73% to 5.52%. A year ago, it averaged 2.62%. “While mortgage rates have resumed their decline, the market remains hypersensitive to rate movements, with purchase demand experiencing large swings relative to small changes in rates,” said Sam Khater, Freddie Mac’s Chief Economist. “Over the last few weeks latent demand has been on display with buyers jumping in and out of the…
