American Homes Gained $9.1T In Value In November

Homeowners gained $9.1 trillion in housing value between November 2020 and November 2021, a new report from Redfin found. U.S. home prices rose 31.4% year-over-year (YOY) to $38.3 trillion in November, with a $2.6 trillion annual increase a year earlier. The surge in value was propelled by continuing home price appreciation. November was the 16th consecutive month of double-digit price increases. The number of homes for sales reached a record low, adding fuel to the fire. “The surge in housing values during the pandemic has widened the gap between homeowners and renters in America. Homeowners have seen their wealth increase significantly over the past year, while renters have missed out on those gains and are now grappling with rent inflation,”…

Millennials At Risk Of Becoming House-Rich, Cash-Poor

Millennials spend more of their monthly income on homeownership costs than other generations and are at the greatest risk of becoming house-rich and cash-poor, according to a new study from Hometap. The study, a survey of 1,000 US homeowners, found that 83% of millennials carry at least some debt, compared to 72% of baby boomers.  Of everyone surveyed, 47% were negatively impacted by the pandemic, and 77% carried some debt. More than a quarter of all homeowners say they plan to tighten their budgets until their debts are paid. But as homeownership costs rise, paying down the debts may become increasingly difficult. Hometap found that 52% of homeowners spend at least 16% of their monthly income on mortgages, and 46%…

Black Knight: Equity Hit All-Time High In Q3

Tappable equity soared to a new all-time high in October 2021, increasing almost a quarter-trillion dollars in Q3, according to Black Knight’s October 2021 Mortgage Monitor Report. Black Knight reports that Q3 home price growth added more than $250 billion to Q2’s “history-making rate.” The average homeowner’s equity has risen by $53,000, working out to $178,000 available in tappable equity before reaching an 80% combined loan-to-value ratio. Homeowners tapped their equity in Q3 at the highest rate in 14 years, with cash-outs accounting for 54% of all refinances. The aggregate total of $9.4 trillion is up 32% YOY and almost 90% higher than the peak in 2006. “Data points like these inevitably, and understandably, lead to comparisons with the run-up…

Credit Availability Up In Response To High Equity

Mortgage credit availability rose by 1.5%, according to the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI). This is its highest level since May 2021. The index analyzes data from Ellie Mae’s AllRegs Market Clarity business information tool. The MCAI rose to 125.6, with the Conventional MCAI increasing 4.5% while the Government MCAI fell by 0.7%. The Jumbo MCAI rose by 5.8% and the Confirming MCAI rose by 2.6%. “Last month’s expansion was driven by a 4.5 percent increase in the conventional index, while the government index slightly decreased. Even with increases in seven out of nine months thus far in 2021, total credit availability is still around 30 percent less than it was in February 2020 before the…

Average Homeowner Up $51k Since Q2 2020 As Home Values Soar

Homeowner equity grew $2.9 trillion since Q2 2020, up 29.3%, CoreLogic’s Homeowner Equity Report found. That shakes out to $51,500 in gains for the average borrower. Homeowners with mortgages make up roughly 63% of all residential properties in the U.S. Fifty-nine percent of borrowers reported they felt highly confident in their ability to make their mortgage payments in the coming year.  This is great news for underwater borrowers. The number of homes in negative equity has fallen 30% since Q2 2020. In Q2 2021 alone, the number of underwater homes fell 12% to 1.2 million homes, 2.3% of all mortgaged properties. The national aggregate value of negative equity dropped from $273.2 billion to $268 billion, a year-over-year decrease of about…

Racial Bias in Mortgage Biz? New Data Says No, Researchers Find

By Randall Bloomquist In the mortgage public-policy cosmos, studies alleging racial bias in lending are like comets. They blaze across the industry skyline on a regular basis, drawing attention from the media and outrage from fair housing activists. The latest flare came from a report alleging Black applicants are nearly twice as likely to be denied a conventional mortgage as compared to White applicants with similar financial profiles. The study, which claims to advance the case for widespread lending discrimination through the analysis of newly available data about loan applicants, was generated by the non-profit investigative website The Mark-Up in partnership with the Associated Press. But according to some industry analysts, The Mark-Up’s j’accuse! moment comes up short. Those data crunchers say the…

Investigation Finds Freddie and Fannie Algorithm Negatively Impacts Borrowers of Color

An investigation by The Markup found that lenders in 2019 were more likely to reject loan requests from people of color than white people, even if their finances looked much the same. The Markup examined more than 2 million conventional mortgage applications using statistical analysis that held 17 factors steady to account for explanations traditionally used to explain racial disparities in lending: the borrower’s credit history, debt-to-income (DTI) ratio and loan-to-value (LTV) ratio. According to The Markup, the bias was evident in the credit scoring algorithm “Classic FICO,” which was developed in the 1990s. Fannie and Freddie require lenders to use Classic FICO to determine whether an applicant meets their minimum threshold. Classic FICO focuses on traditional credit but does…