Homebuyers are feeling slightly more optimistic about the market as mortgage rates ease. Fannie Mae’s Home Purchase Sentiment Index (HPSI) rose 3.7 points in December. Three of its six components improved from the month prior as more consumers said they expect rates and home prices to drop. After weeks of declines, rates inched up in the first week of 2023 but remain well below 7%. Economists at Freddie Mac expect them to fall further as inflationary pressures ease. But home purchase sentiment remains near its all-time low, set in October, and is down 13.2 points YOY. Only 21% of respondents believe it’s a good time to buy a home. And the possibility of additional rate hikes from the Federal Reserve…
By SCOTT KIMBLER Racial inequity and home appraisals have caught the attention of leaders at the American Enterprise Institute Housing Center in Washington, D.C. AEI is a think tank supported by contributions and designed to keep an eye on policies and trends regarding the U.S. housing market. Leaders there say their goals are to provide transparent and objective mortgage and housing market trends, foster a stable system of mortgage finance that promotes sustainable homeownership, and develop market-based solutions to the nation’s shortage of economical housing. Tobias Peter, research fellow and assistant director of the AEI Housing Center, explained how people have been uncovering racial bias in appraising in recent years, oftentimes making news headlines. “A black homeowner wants to get…
Mortgage interest rates slipped again last week, marking the fourth consecutive week of decline, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 6.33%, down from 6.49% the week prior. A year ago at this time, the 30-year FRM averaged 3.10 percent. The 15-year fixed-rate mortgage fell from 5.76% to 5.67%. A year ago, it averaged 2.38%. “Over the last four weeks, mortgage rates have declined three-quarters of a point, the largest decline since 2008,” said Sam Khater, Freddie Mac’s Chief Economist. “While the decline in rates has been large, homebuyer sentiment remains low with no major positive reaction in purchase demand to these lower rates.” Fannie Mae’s Home Purchase Sentiment Index broke…
Mortgage loan application volume surprised no one with another week of declines, accompanied by the 10th consecutive week of rising interest rates, according to the Mortgage Bankers Association’s weekly survey. Interest rates finally topped the dreaded 7% mark, reaching 7.16%. This is their highest point since 2001. The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped by 1.7%. Application activity is at its slowest pace since 1997. The adjusted purchase index fell 2%, while the unadjusted purchase index decreased by 3% and was 42% lower YOY. Purchase applications are now at their slowest pace since 2015, 40% slower than a year ago. “Despite higher rates and lower overall application activity, there was a slight increase in…
The Federal Housing Finance Agency has made significant changes meant to improve lending access to low-income and first-time homebuyers. At the Mortgage Bankers Association’s 2022 Annual Convention & Expo, FHFA Director Sandra L. Thompson announced that the agency had validated and approved the FICO 10T credit score model and the VantageScore 4.0 credit score model for use by Fannie Mae and Freddie Mac. The two models will replace the Classic FICO, which the GSEs have used for two decades. Thompson said the models will take multiple years and significant effort to introduce to the industry. But will the end result will be “improved accuracy and a more inclusive approach to evaluating borrowers.” The new models improve accuracy by accounting for…
The third quarter of 2022 brought the slowest quarterly price growth since Q4 2011, showing just how quickly home prices are changing as the market rebalances. Single-family home prices rose 13.8% YOY in Q3 2022, slowing from last quarter’s 19.1%, according to Fannie Mae’s Home Price Index. The Index measures average quarterly price change for all single-family U.S. properties except condos. Prices were up only 0.2% from Q2, their slowest quarter since 2011. “Year-over-year home price growth decelerated in the third quarter, as the sharp rise in mortgage rates – and declining housing affordability – appears to have weighed further on demand,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. He added that many homeowners who might…
Despite an upwardly revised Q3 GDP estimate, Fannie Mae’s Economic & Strategic Research Group has predicted a recession in 2023 and warned it could be worse than expected. The group estimates Q3 GDP will be 2.3% annualized, up from its earlier prediction of 1.3%. However, it says that the boost “is likely to prove temporary” and forecasts Q4 growth to be -0.7% annualized. The revision accounts for “partial normalization in global trade following a historically large trade deficit in the first half of 2022,” which will be overcome by Q4. Unemployment is expected to exceed 5% by the end of 2023 as a result of the recession. The group noted that labor market tightness– which typically contributes to inflationary pressure…
Loosening lending standards are making it easier than ever for gig workers to finance homes. These workers often make enough money to qualify for a loan, but often have a difficult time proving that to lenders. “It is a phenomenon with this gig economy where people can drop in and have an Amazon play, and they’re pulling in $10,000 a month from it. So, these are not traditional type borrowers,” Eric Morgenson, VP of business development at Angel Oak, said on a panel discussing loans for gig workers. Self-employed borrowers are typically asked for contract work 1099s, copies of the last 12 to 24 months of business and personal bank statements, and year-to-date profit-and-loss statements that report revenue, expenses, and…
Priscilla Almodovar has been named Fannie Mae’s CEO and member of the Board of Directors, the GSE announced in a press release. Almodovar will succeed former interim CEO David C. Benson, who will remain in the role of President. “It’s an honor to join Fannie Mae and lead the company as it carries out its vital role in the housing finance market and works to help ensure that equitable, affordable housing is available to people in communities across the country,” Almodovar said. “I look forward to working with the Board, Management, and my new colleagues at Fannie Mae to continue this important work, which has benefited so many people over the company’s more than 80-year history.” She offers three decades…
Joseph Grassi has been appointed as chief risk officer of loanDepot, the company announced in a press release. Grassi reports directly to loanDepot CEO Frank Martell. He is responsible for the company’s risk management program, enterprise and loan-level risk governance policies, and potential operations risks. “I look forward to working with Frank and his entire leadership team at loanDepot to deliver on the company’s vision of becoming an increasingly purpose-driven organization,” said Grassi. “loanDepot has both an incredible reputation for fostering innovation and a deep commitment to its customer-first philosophy. I’m excited to leverage the strengths of the Company and team to help make the American dream of homeownership a reality for more families.” Grassi brings more than three decades…
