Morning Roundup (6/24/2022) – Mortgage Rates Up, Demand Plummets

Good Morning! Today is Friday, June 24. The Supreme Court struck down a New York law that required people who wanted to carry a concealed handgun in public to demonstrate a need to do so. The Senate passed the gun safety bill with 15 Republican votes. Ukraine is now a candidate for E.U. membership. The Mortgage Note Reports Cost-Burdened: Mortgage rates increased again this week to 5.81%, with fixed mortgage rates now up 2 full percentage points from the beginning of the year. Demand Plummets: Soaring interest rates pushed homebuyer demand down 16% YOY in its largest annual decline in more than two years. And in other mortgage and housing news… New Home Sales: May’s new home sales were at a seasonally adjusted annual rate…

Homebuyer Demand Falls In Its Largest Annual Decline Since The Pandemic Began

Soaring interest rates pushed homebuyer demand down in its largest annual decline in more than two years, Redfin reported. Redfin’s Homebuyer Demand Index was down 16% YOY, its largest drop since April 2020, in response to lagging inventory and skyrocketing mortgage rates. Last week, rates jumped a full half-point in the largest one-week increase in the history of Freddie Mac’s weekly rate survey, which dates back to 1987. This week they’re up to 5.81%. At the same time, pending home sales were down 10% YOY, the largest decline since May 2020. Home prices are moderating slightly, but still elevated. The average size of a purchase loan application was $420,000, down from a peak of $460,000. In 2019, the average loan…

Interest Rates Tick Up Again

Mortgage rates increased again this week, averaging 5.81%, Freddie Mac reported Thursday.  Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5.81%, up from last week’s 5.78%. A year ago at this time, the 30-year FRM averaged 3.02%. “Fixed mortgage rates have increased by more than two full percentage points since the beginning of the year,” said Sam Khater, Freddie Mac’s Chief Economist. “The combination of rising rates and high home prices is the likely driver of recent declines in existing home sales. However, in reality many potential homebuyers are still interested in purchasing a home, keeping the market competitive but leveling off the last two years of red-hot activity.” Rising rates have priced some…

Morning Roundup (6/23/2022) – Housing Payments Surpass 30% Cost-Burdened Threshold

Good Morning! Today is Thursday, June 23. Biden asked Congress to lift the federal gas tax through September. At least 1,000 people are dead and another 1,600 are injured after an earthquake in southern Afghanistan. The Uvalde school district placed its police chief on leave amid criticism of his response to last month’s shooting. The Mortgage Note Reports Cost-Burdened: Housing payments have surpassed the dreaded 30% cost-burdened threshold as affordability sinks to its lowest point in more than 35 years. Morrow Named President: Travis Morrow has been named president of 7 Mortgage. And in other mortgage and housing news… Storm Risk: Nearly 7.8 million homes with more than $2.3 trillion in RCV are at risk of hurricane-related damages, with NYC and Miami in the most trouble. Ishbia’s Michigan Donations: The…

Payments Surpass Cost-Burdened Threshold As Affordability Sinks To Lowest Point In 35 Years

Housing payments have surpassed the dreaded 30% cost-burdened threshold thanks to the 30-year fixed rate’s recent half-point jump. Black Knight reports that it now costs $2,103 to make the principal and interest (P&I) payment on an average-priced home with a 20% downpayment. That equates to 36.2% of the median household income and sinks affordability to its lowest level in more than 35 years. Payments as a percentage of income are now higher than the previous record of 34.1% in July 2006, and significantly up from the long-term average of 25.1%. The Department of Housing and Urban Development defines cost-burdened families as those “who pay more than 30% of their income for housing” and “may have difficulty affording necessities such as…

Morning Roundup (6/22/2022) – Applications Rise

Good Morning! Today is Wednesday, June 22. The Jan. 6 committee presented evidence that Donald Trump was involved in the effort to overturn the 2020 election using fake electors. The Senate advanced its gun safety bill. A jury found that Bill Cosby sexually assaulted a 16-year-old girl in 1975. The Mortgage Note Reports Applications Up: Mortgage loan application volume rose by 4.2% last week despite rates surging to their highest point since November 2008. Multifamily Investment: Investment opportunities in multifamily housing slipped in Q1 2022 as NOI was again overwhelmed by property price growth and rising interest rates.  And in other mortgage and housing news… At-Risk Markets: New Jersey, Illinois, and California have the highest concentration of markets vulnerable to declines, based on home affordability, unemployment, and other measures. Rents Reach…

Multifamily Investment Opportunities Slipping As Property Prices, Rates Rise

Investment opportunities in multifamily housing slipped in Q1 2022, with the Freddie Mac Multifamily Apartment Investment Market Index (AIMI) falling by 4.8% from Q4 2021 and 2.4% year-over-year. AIMI analyzes multifamily rental income growth, property price growth, and mortgage rates to measure multifamily market investment conditions. A decline such as this indicates that attractive investment opportunities are becoming more difficult to find. For the second quarter in a row, increases in net operating income (NOI) were overwhelmed by property price growth and rising interest rates.  AIMI fell nationally and in 18 of the 25 individual markets analyzed by Freddie Mac. Only seven markets experienced growth. Quarter-over-quarter NOI grew 2.5% and was up in every metro. Miami saw the fastest increase…

Application Volume Rises Despite Rate Surge

Mortgage loan application volume rose by 4.2% last week despite rates surging to their highest point since November 2008, the Mortgage Bankers Association’s (MBA) weekly survey shows. The adjusted Market Composite Index, a measure of mortgage loan application volume, increased by 4.2%. The adjusted purchase index rose 8%, while the unadjusted purchase index was up by 6% and was 10% lower YOY. The refinance index dropped by 3% and made up 29.7% of total applications. Refi volume is down 77% in the last year. ARM activity rose to 10.6% of total applications.  Mortgage rates increased by 33 basis points to 5.98%, their highest since 2008 and the largest single-week increase since 2009. MBA Associate Vice President of Economic and Industry…

Morning Roundup (6/21/2022) – Existing-Home Sales Slip, Affordability Declines

Good Morning! Today is Tuesday, June 21 and the summer solstice, the longest day of the year. Biden said that he was considering suspending the federal gas tax to ease fuel prices. Moscow says it has two American fighters in its custody. The Mortgage Note Reports Existing-Home Sales Slip: Existing-home sales dropped for the third consecutive month, falling 2.4% month-over-month and 5.9% year-over-year. Affordability Challenges: Affordability is at a 15-year low, with mortgage payments up in 45 of the 50 largest U.S. metros. And in other mortgage and housing news… Market Normizational Stays Slow: Potential existing home sales fell 2% month-over-month and are down 10.5% YOY, which FirstAm says is partially the result of homeowners with no incentive to sell hanging on to their properties. Spending Power: A homebuyer…

Existing-Home Sales Slip For 3rd Month Straight

April’s existing-home sales slipped for the third consecutive month, falling 2.4% from March to a seasonally adjusted rate of  5.61 million, the National Association of Realtors (NAR) reported. Sales were down 5.9% year-over-year, with each of the four major regions seeing declines. The median price for existing homes of all types was $391,200, up 14.8% YOY. This is the 122nd consecutive month of YOY price growth, the longest-running streak on record. “Higher home prices and sharply higher mortgage rates have reduced buyer activity. It looks like more declines are imminent in the upcoming months, and we’ll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two years,” said Lawrence Yun, NAR’s chief economist. Housing…