Morning Roundup (4/26/2022)– Housing Bubble: Clickbait Or Is There A Bumpy Ride Ahead? 

Good Morning! Today is Tuesday, April 26. The Biden administration established a program that allows Americans to sponsor Ukrainian refugees. A New York judge held Donald Trump in contempt for refusing to turn over documents. The Boston Celtics eliminated the Brooklyn Nets in the first round of the N.B.A. playoffs. The Mortgage Note Reports Housing Bubble: Clickbait Or Is There A Bumpy Ride Ahead? Chuck Green reports trouble could be percolating in the U.S. housing market. loanDepot Shakeup: loanDepot has named Anthony Hsieh as its new Executive Chairman, while industry leader Frank Martell joins as President and CEO. Builder Profits: Builder gross profit margins fell to 18.2% in 2020, while net profits slipped to 7%, the first profit margin decline since 2008. And in other mortgage and housing news… Set To Stall: …

Builder Profits Fell In 2020, The First Drop Since 2008

Builder gross profit margins fell to 18.2% in 2020, while net profits slipped to 7%, according to NAHB Builders’ Cost of Doing Business Study. This is the first profit margin decline since 2008. The study surveyed single-family builders across the U.S. It found that builders averaged $13.7 million in revenue for the fiscal year of 2020, of which $11.2 million (81.8%) was spent on costs of sales, such as land costs and construction costs. An additional $1.5 million (11.2%) was spent on operating expenses, such as marketing, administrative expenses, and owner’s compensation.  The study notes that shutdowns related to Covid-19 played a part in the results, as well as the need to navigate work-from-home models, supply-chain disruptions, and labor shortages.…

Housing Bubble: Clickbait Or Is There A Bumpy Ride Ahead?

By CHUCK GREEN Trouble could be percolating in the U.S. housing market. In a blog post last month, researchers and economists from the Federal Reserve Bank of Dallas wrote of indications that real-time market monitoring is picking up signs of a “brewing U.S. housing bubble.” They added: “Our evidence points to abnormal U.S. housing market behavior for the first time since the boom of the early 2000s. Certain economic factors, especially including the price to rent ratio, and the price-to-income ratio—which show signs that 2021 house prices appear increasingly out of step with fundamentals, raise red flags.” Researchers and economists also cited growing concern that U.S. house prices are again becoming “unhinged from fundamentals.” Moe Zulfiqar, Editor of Lombardi Letter,…

Morning Roundup (4/25/2022)– Real House Prices, Rate Hike Impact

Good Morning! Today is Monday, April 25. Emmanuel Macron, the incumbent president of France, won re-election over Marine Le Pen. A man died after setting himself on fire in front of the Supreme Court to protest climate change. Wildfires in Arizona, Nebraska, and New Mexico have killed at least one person and destroyed hundreds of structures. The Mortgage Note Reports Rocket Mortgage Works to End Digital Divide In Detroit: Editor Kimberley Haas reports that leaders at the company have been working with local officials who say there is still much work to be done. Real House Prices: FirstAm’s Real House Price Index jumped up by nearly 31% in February, the fastest growth in the more than 30-year history of the series. Rate Hike Impact: Nathaniel Drake of Fannie’s…

Rocket Mortgage Works To End Digital Divide In Detroit

By KIMBERLEY HAAS Leaders at Rocket Mortgage are working to end the digital divide in Detroit where it is estimated that one-quarter of residents do not have internet access. That number is down from nearly 40% in 2016, according to Dana Afana at Detroit Free Press, but those working on the issue say there is still a long way to go especially considering how important the internet is post-2020. The Changing the Course initiative was established in that year to end the digital divide in Detroit, where Rocket Mortgage is located. Money raised from The Rocket Mortgage Classic, which made history in 2019 as the first PGA TOUR ever held in the city, supports the campaign. The tour raised $1.35…

Fannie Mae: Full Effect Of Rising Rates Are “Yet To Be Felt”

In its Economic and Housing Weekly Note, Nathaniel Drake of Fannie’s Economic and Strategic Research Group said that the full effects of rising interest rates have “yet to be felt.” “Especially given that the full effects of the recent rise in mortgage rates have yet to be felt,  we expect existing home sales to continue to decline through 2022,” the note reads. “However, we believe there is still a pool of prospective buyers who were previously outbid but still want to purchase a home, which should help support sales, thus limiting the pace of slowdown in the near term.” Though demand remains elevated, there are signs that the hot housing market is cooling down. Existing home sales fell for the…

Real House Prices Up 31% YOY, Fastest Growth On Record

First American Financial’s Real House Price Index increased by 30.6% YOY in February, its fastest growth in the more than 30-year history of the series, the company reported. The RHPI measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time at national, state, and metropolitan area levels. Because the RHPI adjusts for house-buying power, it also serves as a measure of housing affordability. February’s numbers show a rapid month-over-month decline in affordability. Real house prices rose by 5.6% from January, and nearly 31% YOY. Consumer house-buying power fell 3.6% between January and February, and 6.8% YOY. First American attributes the numbers to rising home…

Morning Roundup (4/22/2022)– Rates At 5.11%, Q1 2022 Foreclosures

Good Morning! Today is Friday, April 22. Philadelphia is ending its mask mandate, four days after reinstating it. The U.S. pledged more military aid to Ukraine, including drones that explode on impact. Palestinians and Israeli police clashed at one of Jerusalem’s holiest sites. The Mortgage Note Reports Weekly Rates: Mortgage rates averaged 5.11% last week, rising for the seventh consecutive week and causing “volatility in demand.” Q1 Foreclosures: Q1 2022 set a new post-pandemic high for foreclosure activity — the 11th consecutive month with a YOY increase in foreclosure activity. In Case You Missed It: This week Chuck Green reported that job cuts are hitting the mortgage industry, while Scott Kimbler wrote about how inflation is affecting retirements. And in other mortgage and housing news… Black Knight: Forbearance plan volumes ticked up…

Q1 2022 Sets New Foreclosure High

Foreclosure activity rose in all 50 states in Q1 2022, with foreclosure starts and bank repossessions reaching their highest numbers in two years, according to ATTOM’s Q1 2022 Foreclosure Market Report. A total of 78,271 U.S. properties had a foreclosure filing during Q1, up 39% from Q4 2021 and 132% YOY. March alone saw 33,333 properties with foreclosure filings, up 29% from February and 181% YOY. It was the 11th straight month of YOY increases in foreclosure activity. “Foreclosure activity has continued to gradually return to normal levels since the expiration of the government’s moratorium, and the CFPB’s enhanced mortgage servicing guidelines,” said Rick Sharga, executive vice president of market intelligence for ATTOM.  “But even with the large year-over-year increase…

Mortgage Rates Average 5.11%, Causing “Volatility In Demand”

Mortgage rates averaged 5.11% last week, up from 5%, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5.11%. A year ago at this time, the 30-year FRM averaged 2.97%. “Mortgage rates increased for the seventh consecutive week, as Treasury yields continued to rise,” said Sam Khater, Freddie Mac’s Chief Economist. “While springtime is typically the busiest homebuying season, the upswing in rates has caused some volatility in demand. It continues to be a seller’s market, but buyers who remain interested in purchasing a home may find that competition has moderately softened.” Mortgage rates have grown from 3.51% at the beginning of March while home prices remain elevated. The combo has…