Builder Confidence Falls, Signaling A Market Slowdown

Builder confidence fell eight points in May, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The HMI registered a reading of 69 in May, a significant drop from April. This is the fifth consecutive month of decline and the lowest reading since June 2020. The low reading suggests that the housing market is slowing thanks to affordability challenges. “The housing market is facing growing challenges. Building material costs are up 19% from a year ago, in less than three months mortgage rates have surged to a 12-year high and, based on current affordability conditions, less than 50% of new and existing home sales are affordable for a typical family,”  said NAHB Chief Economist Robert…

Opinion: Black Mortgage Denials Are Increasing. We Need Tech-Based Solutions To Reverse The Trend

By KEVIN B. KIMBLE Editor’s Note: This article was written by a contributor and contains the individual’s views, opinions, or personal experiences. The Biden administration recently unveiled an action plan to address racial bias in home appraisals and other areas of the American housing system.  As new research from Zillow shows, this couldn’t come at a better time. Zillow found that there is a widening mortgage approval gap along racial lines.  Specifically, Black applicants are denied a mortgage at a rate 84 percent higher than white applicants.  This figure has been worsening, representing an increase of 10 percentage points since 2019.  The approval disparity has contributed to declining Black homeownership, a crucial aspect of wealth building.  The negative trend in Black mortgage denials is…

Builder Confidence Dips As Costs Rise

Builder confidence dropped slightly in January, disrupting a four-month trend of rising builder sentiment despite high consumer demand, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). Builder confidence in the markets for newly-built, single-family homes dropped one point to 83. Any number over 50 indicates that more builders view conditions as good than poor. Notably, the HMI has remained at 83 or 84 for the past three months, the same level as the spring of 2021. The drop was attributed to inflation concerns and ongoing supply chain disruptions. “Higher material costs and lack of availability are adding weeks to typical single-family construction times,” said NAHB Chairman Chuck Fowke, a custom home builder from Tampa,…

Pending Home Sales Rebounded In October

Pending home sales rebounded in October after a September drop, though the year-over-year (YOY) numbers were mild, according to the National Association of Realtor’s (NAR) Pending Home Sales Index. The Index, which is based on contract signings, rose 7.5% to 125.2 in October. An index of 100 is equivalent to the level of contract activity in 2001.  However, signings fell 1.4% YOY.  “Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” said Lawrence Yun, NAR’s chief economist.  “This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still…

Morning Roundup (11/29/2021)– BBB Housing Plan Explained, Forbearance Starts Up

Good Morning! Today is Monday, November 29. The new Covid-19 variant, Omicron, may be more contagious among vaccinated people but less deadly overall. Japan, Israel, and Morocco have closed their borders to foreign travelers. Mark Esper is suing the DOD for not clearing his book manuscript for publication due to sections detailing his time working under Donald Trump. And in mortgage and housing news… Build Back Better’s Implications On Housing Prices: The House version of President Biden’s “Build Back Better” plan includes about $170 billion for affordable housing and people are asking what that means. CRA Changes: As the Fed weighs making the Community Reinvestment Act race-specific, what do the data say about CRA loans? Not much. Forbearance Starts Jump: …

Economist: Build Back Better Will Put Downward Pressure on Housing Prices

By SCOTT KIMBLER The House version of President Biden’s “Build Back Better” plan includes about $170 billion for affordable housing and people are asking what that means. Biden’s spending plan includes $65 billion to preserve and rebuild public housing and another $15 billion to help build or preserve more than 150,000 rental properties for lower-income families. It’s part of the administration’s goal to build or preserve 1 million affordable homes. The bill is almost certain to change drastically in the U.S. Senate. But if the housing policies remain unchanged, what would this spending splurge mean for the overall housing market, at a time when prices are high and supply is low? The Mortgage Note spoke with Tom Smith, Ph.D. of…

Morning Roundup (11/23/2021)– Powell Renominated, Delinquencies Improve

Good Morning! Today is Tuesday, November 23. The Justice Department will pay $130 million to the survivors and families of victims of the Parkland, FL shooting, settling a lawsuit that alleged the FBI failed to investigate tips in advance of the tragedy. A defense attorney in the Ahmaud Arbery case is under scrutiny after making comments in court about the toes of the deceased. An Airbus A340 plane has landed on Antarctica for the first time. And in mortgage and housing news… Powell Renominated: President Biden renominated Jerome Powell to chair the Fed. Here’s what industry analysts think about the move. Black Knight First Look: The national delinquency rate continued to improve at a slow but steady pace last month, with especially impactful declines for loans…

Mortgage Industry Reacts To Powell Renomination

After weeks of waiting, President Biden announced Monday he is renominating Federal Reserve Chairman Jerome H. Powell to another four-year term. Now analysts are asking what impact another Powell term will mean to mortgage rates and the housing market. The move has been characterized as a return to the status quo in which the Fed chairman is reappointed regardless of their political identity, a tradition former President Trump bucked when he appointed Powell. The Fed chairman question has been on many industry watchers’ minds in the last two weeks. Much was made of Biden’s sit down with Fed Governor Lael Brainard, seen as the most likely candidate if Biden chose to make a change. Brainard has instead been nominated as…

Mortgage Applications Up From September, Down YOY

Mortgage applications for new home purchases fell 15.2% year-over-year (YOY) in October but increased 6% month-over-month (MOM), according to the Mortgage Bankers Association’s (MBA) latest Builder Application Survey. The increase from September puts MBA’s estimate of new home sales at its strongest pace since January 2021. “Purchase activity continues to be dominated by higher loan balance transactions, which pushed the average new home loan size up to over $412,000, another new record in the survey,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.  “Recent U.S. Census data show an increasing share of new sales are for homes yet to be built or still under construction, and a shrinking share of completed homes. Housing demand remains strong,…

Morning Roundup (9/21/2021)– August New Home Purchases Down, Real-Estate Commissions Under Investigation

Good Morning! Today is Tuesday, September 21. The U.S. is easing travel bans, but will require foreign nationals to show proof of vaccination before entering the country. The Biden administration is raising the cap on refugee admissions to 125,000. A doctor who publicly admitted to performing an abortion after six weeks is being sued, the first case filed under Texas’ controversial abortion law. And in mortgage and housing news… New Home Purchases Down: MBA’s Builder Application Survey data for August 2021 shows mortgage applications for new home purchases increased from July but fell year-over-year. Commissions Under Investigation: Home sale commissions are under investigation by the Biden administration, which has asked the Federal Trade Commission to adopt rules to address any…