Purchase, Home Equity Lending Weakness Hurt Q3 Originations

Mortgage originations fell by 3% in Q3 2023, reversing a spike in Q2 and marking the ninth decline in ten quarters, according to new data from ATTOM. Purchase and home equity lending (both -7%) induced the drop as interest rates stuck above 7% over the summer.  These declines wiped out gains in refinances, which were up 5%, the second straight quarterly increase. ATTOM attributes the refi boost to homeowners taking advantage of cash from their sky-high equity. Though some homeowners lost equity in Q3, it remained strong overall as home prices soared earlier this year, leaving Americans with plenty to borrow against. The downturn pushed residential lending activity down 26% YOY and 63% from a high point in 2021 during…

Delinquencies Rise But Loss Mitigation Efforts Prevent Foreclosure

By KIMBERLEY HAAS Distressed homeowners who get behind on their mortgage bills are avoiding foreclosure. The Mortgage Bankers Association’s National Delinquency Survey was released last week and it showed that delinquencies increased in the third quarter to a rate of 3.62%, up 25 basis points from the second quarter and 17 basis points from a year ago. Marina Walsh, MBA’s vice president of industry analysis, said that despite the increase, later-stage delinquencies – those 90 days or more past due – declined to the lowest level since the first quarter of 2020. “The decline in later-stage delinquencies, along with a foreclosure starts rate of 0.14% – which is well below the historical quarterly average of 0.40% – suggest that distressed…

Five Million Homes Sit Empty Across Largest U.S. Metros

Nearly 5.5 million homes are sitting vacant in the U.S.’s largest metros, but they’re not going to save the housing market. LendingTree analyzed the latest U.S. Census Bureau American Community Survey data to find out what cities have the highest shares of unoccupied homes and why. Their survey found that 5,475,687 housing units are vacant in the country’s 50 biggest metros, with a vacancy rate of 8.02% across them all. New Orleans (16.11%), Miami (14.48%), and Tampa, FL (13.83%), have the highest vacancy rates, with 600,000 empty housing units vacant collectively. Minneapolis, Austin, and Washington, D.C., have the fewest vacancies. While it’s important to know the number of houses sitting empty, the reasons behind them are far more significant. LendingTree…

Did Student Loan Debt Calculations Fuel A Housing Bubble That’s Ready To Burst?

By ERIN FLYNN JAY Mortgage loans have some risks, as do student loans. But the two don’t add up to a toxic combination that threatens to cause a price crash in the housing market, and trillions of dollars of damages for taxpayers to clean up. A recent WSJ opinion piece by Allysia Finley claims taxpayers are standing behind trillions of dollars in risky mortgages due to the way that student loan debt is calculated during the mortgage process. In “The Student-Debt Bubble Fueled a Housing Bubble,” Finley blamed student loan repayment plans, saying monthly payments are capped at 10% of discretionary income. “Many student borrowers consequently aren’t paying down their debt, but it isn’t counted against them when they attempt…

Flipping Rate Falls, But Profits Soar

Home flipping rates are falling as profit margins soar, according to new data from ATTOM. Flipped homes accounted for 8.9% of all U.S. home sales in Q2 2023, down 1% from the prior quarter and nearly the lowest rate since 2021. In total, 84,350 single-family homes and condominiums were flipped in the second quarter. At the same time, raw flipping profits increased 18% from Q1, the largest spike in the past decade. Typical profits also increased at the fastest quarterly pace in three years. The profit upswing comes on the heels of an “extended slump” that cut profits in half in the last two years. Though they remain far below 2021’s peaks, last quarter’s profits represent a rebound for home…

Originations Up In Q2, Sending Lenders Back To Black

Mortgage lenders were back in business last quarter. Lenders issued $494 billion worth of residential mortgages in the second quarter of 2023, up by 23% from Q1 though still down 41% YOY, according to new data from ATTOM. Residential loans drove the increases, up 21% and breaking a streak of eight consecutive quarterly declines. Purchase loans in particular jumped 29%. Refinance and home equity activity also spiked, up 13.8% and 12.9% QoQ, respectively. “Home buyers and owners alike lined back up again at the doors of mortgage lenders this Spring seeking loans of all kinds. It looks like owners took advantage of the small rate drop to refinance existing loans, while a jump in mortgages for purchasers was likely fueled…

How The Housing Market Is Affected By Inflation

By ERIN FLYNN JAY Inflation has affected the housing market as higher costs of living puts more stress on the average person’s finances. The average American household spent $709 more in July than they did two years ago to buy the same goods and services, according to Moody’s Analytics. “High inflation of the past 2+ years has done lots of economic damage,” Mark Zandi, chief economist at Moody’s Analytics, wrote in a post on X, the platform formerly known as Twitter. Rick Sharga, President & CEO of CJ Patrick Company, said among other things, inflation makes it harder for renters to save money for a down payment, and as home prices tend to go up over time, the amount of…

Zombie Foreclosures Creep Up

Zombie foreclosures are inching up as people who can no longer afford their homes abandon them. The number of vacant homes in foreclosure, or zombie foreclosures, has risen for the sixth consecutive quarter, according to new data from ATTOM. Year-over-year, zombie foreclosures are up 13.9%. Currently, 8,800 foreclosures are sitting empty across the country. “Zombie foreclosures again are ticking up a tiny bit this quarter, tracking along with a small rise in overall foreclosure activity around the country. That’s to be expected, as a handful of homeowners who can’t catch up on overdue mortgage payments just walk away from their properties,” said Rob Barber, ATTOM CEO. But these foreclosures remain just one in 11,600 of all homes nationwide, abating fears…

Price Appreciation Returns To Opportunity Zones

Low-income redevelopment zones continue to benefit from home price appreciation around the country, and some are faring better than their neighbors. ATTOM’s Q2 2023 review of low-income Opportunity Zones targeted by Congress for economic redevelopment found that 61% of the 3,909 data zones saw price increases. In half of those, prices were up 5% or more. Opportunity zones exist in and around low-income neighborhoods where the federal government offers tax breaks to advance economic development. Overall, these areas follow home price trends in other parts of the country. Values declined in the last half of 2022 before recovering in 2023, a pattern that has impacted most U.S. neighborhoods. But prices in many zones rose faster than the nationwide trend both…

Experts Weigh In: When Mortgage Rates Drop, Will Home Prices Surge?

By ERIN FLYNN JAY It is being speculated that once interest rates drop, a number of buyers will jump into the housing market, causing another surge in prices. We spoke to some industry leaders to get their take. Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors, said this is true. “Buyers who were priced out of the housing market with rates at nearly 7% will be able to purchase. Due to limited housing inventory, the housing market may see a rebound in multiple offers, which will put upward demand on housing prices,” said Lautz. She said a significant portion of homes are already selling at above the asking price. “Currently, there are…