By CHUCK GREEN
The housing market has been slowing down due to interest rate hikes, but that likely won’t stop officials from pushing further in their fight against inflation. And average American homebuyers and sellers will be affected by their decisions as affordability continues to be a concern nationwide.
Last week, the Federal Reserve Board voted to hold interest rates steady at their monthly policy meeting, keeping the federal funds rate target range between 5.25% and 5.5%.
Chairman Jerome Powell said in his remarks that despite the pause, “We are prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we are confident that inflation is moving down sustainably toward our objective.”…
By CHUCK GREEN
Back in 2008, Fannie Mae and Freddie Mac were in trouble. In fact, without government intervention, they faced imminent collapse, and on Sept. 6 of that year, both were placed in conservatorship by the director of the Federal Housing Finance Agency.
With those conservatorships hitting their 15th anniversary, William Emmons, an adjunct lecturer at Washington University in St. Louis, said the takeover was historically significant because they were the first large-scale government interventions in what came to be known as the Global Financial Crisis.
“In other words, their collapse was a bellwether of things to come. Lehman Brothers failed one week later, which triggered the chain reaction of collapsing banks, AIG, and market confidence,” Emmons told The…
By CHUCK GREEN
Mortgage rates are hovering around 7% as the summer winds down and with potential homebuyers facing high monthly payments for the few properties for sale, people are wondering when the Federal Reserve will loosen its grip on monetary policy so the housing market can free up again.
Last month, Chairman Jerome Powell announced the key interest rate would be lifted to 5.25% to 5.5% — the upper figure representing a level not seen since 2001, according to the Associated Press. Powell said that they don’t expect to reach their goal of 2% inflation until 2025, and they do not intend to cut rates until next year.
“The Fed’s rate hikes attempt to combat inflation, increasing mortgage interest…
By CHUCK GREEN
Mirror, mirror, on the wall, show us a reflection of who we are.
American homebuyers are getting older. The typical first-time homebuyer is now 36, while the repeat buyer’s age climbed to 59 last year.
So what about the mortgage professionals that cater to these consumers? Are they older, industry veterans, or are they young and eager businessmen and women inspired to get into their career paths by the pandemic housing boom?
Based on information from Zippia, a career planning site, the average mortgage broker is 44 years old, and 67.5% of brokers are male.
The average mortgage originator is also 44 years old. Zippia estimates that 56.2% are men.
Beth Rosenbaum, principal of WOSG, a mortgage…
By CHUCK GREEN
Okay, you’ve undoubtedly heard of those who play with house money. Yeah, that rocks.
By the same token, you’re probably similarly familiar with those who don’t owe money on their house. No mortgage. Zippo.
That not only rocks – and thunderously, at that — it brings the house down. C’mon, who doesn’t dream of having a mortgage-burning party and being free of that debt?
But home mortgage burnings are nearly unheard of in present-day America as the country is now more of a mortgage-ownership society than a home-ownership society.
Mortgage balances were at $12.04 trillion at the end of March, according to officials at the Federal Reserve Bank of New York’s Center for Microeconomic Data.
The free…
By CHUCK GREEN
Does anyone need some elbow room?
When COVID appeared to seize control over, well, nearly everything, there seemed to be ample space in offices – including those related to the mortgage industry – across the country. Desks? It was almost as though some hadn’t been occupied in decades.
That scenario is gradually changing. According to the Spring 2023 U.S. Office Occupier Sentiment Survey by CBRE, 65% of respondents say their companies are requiring that employees return to the office.
71% of financial and professional services company respondents said they are required to be back in the office, and most of the companies they work for expect attendance for more than half of the week.
So should mortgage…
By CHUCK GREEN
To home sellers who agonizingly watched the prices of their abodes recede recently, leaving a nasty gash in profits, there’s little to say but “ouch.”
Want a touch of solace? Apparently, the waters are rippling with plenty of others in the same predicament.
A first quarter 2023 U.S. Home Sales Report released by ATTOM showed that on median-priced single-family home and condo sales across the country, profit margins dipped to 44.2%, sagging from 48.7% in the fourth quarter of last year.
A silver lining is that the typical investment return stayed relatively high. In fact, it was nearly double where it was four years ago. From the peak of 56.1% in the second quarter last year, the…
By CHUCK GREEN
Industry leaders and economists are sharing their opinions about changes to fees for loans backed by Fannie Mae and Freddie Mac after reports that homebuyers with good credit scores and substantial down payments will pay more so fees for borrowers limited by income or wealth can be reduced.
The changes to the loan-level price adjustment matrix by officials at the Federal Housing Finance Agency went into effect on May 1 and are the target of two bills in Congress.
Rep. Stephanie Bice of Oklahoma, vice chairwoman of the Republican Main Street Caucus, introduced the Free Market Mortgage Act. She said the changes will force homebuyers with good credit to pay more for their mortgages to subsidize loans…
By CHUCK GREEN
Tradition dictates that April and May are the hottest months for the housing market but there are unique opportunities in parts of the country where that isn’t necessarily the case.
Rick Sharga, president & CEO of CJ Patrick Company in Trabuco Canyon, California, says that although there is truth to the idea that home sales increase as the weather improves, there are exceptions to the rule.
“Markets with a late spring – cold weather states in particular like Alaska or North Dakota – might have a later start to the traditional home selling season, while markets with more temperate clients like California and Hawaii may not be quite as dependent on changing seasons to encourage home buyers…
By CHUCK GREEN
As the traditional spring homebuying season begins, a lack of inventory, high interest rates, and economic uncertainty due to banking troubles have dominated the news. So what can people expect?
Rick Sharga, president and CEO of CJ Patrick Company in California, told The Mortgage Note that it’s “unlikely to be a banner period for home sales. Extremely low inventory of homes for sale coupled with poor affordability are likely to keep sales activity fairly weak, even though seasonal trends usually see sales and prices increase during the spring and summer months.”
Although the second quarter is typically the peak season for home sales, that has been disrupted in recent years, noted Sharga.
“This seasonal trend didn’t happen…
