Good Morning! Today is Monday, November 8. A federal appeals court in Louisianna temporarily blocked the Biden administration’s vaccine mandate. Foreign travelers may now enter the US with proof of vaccination or a negative Covid test. A “concert surge” in Houston left eight dead and prompted a criminal investigation. And in mortgage and housing news… Rocket Q3 Results: Rocket Companies’ Q3 revenue bested analyst expectations, and the company expects to top 10% market share in 2022. Housing Shortage “A Mirage”: Going against industry consensus, housing analyst Ivy Zelman claims that housing production is already ahead of normalized demand. “We’re Going To Have To Build A Lot Of Homes”: On the other hand, lumber firm Weyerhaeuser’s CEO predicts the housing market will remain strong for five to ten more…
The hot housing market has been attributed to historically low-interest rates, Millennials reaching homebuying age, and a desire for spacious living created by the pandemic. Across the industry, experts agree that all of this has been exacerbated by a shortage of houses that started with underbuilding in the aftermath of the 2008 financial crisis. Everyone except Ivy Zelman, the housing analyst who foresaw the financial crisis in 2005. In a report, her firm, Zelman and Associates, claims that housing demand is overblown and that the country is already on a path to building too many houses. “The perception that housing is drastically undersupplied and that a strong demographic picture lies ahead is creating a false sense of security,’’ the report…
Rocket Companies released its Q3 2021 earnings report, which showed its earnings bested expectations of analysts, despite a serious dip in refinancing activity. Analysts expected Rocket to close out the quarter at 48 cents per share, but the company came out on top at 57 cents per share, an adjusted net income of $1.14 billion. Its adjusted revenue reached $3.2 billion, well above consensus estimates of $2.96 billion. The company’s total revenue rose 96% from Q3 2019. “We had an excellent third quarter, as we executed on our mission to remove friction from life’s complex moments. Our core mortgage business exceeded the high end of guidance for closed loan volume and gain-on-sale margin while achieving record purchase volume,” Rocket CEO…
Good Morning! Today is Friday, November 5. Employers added 531,000 jobs last month, while the unemployment rate fell to 4.6%. Eleven states have filed lawsuits against President Biden’s vaccination mandate for employers. A high school principal is apologizing for lack of sportsmanship after their football team won a game with a score of 106-0. And in mortgage and housing news… Own to Rent?: Forbearance exits picked up in the final week of October, with the number of active plans dropping 23% month-over-month as some owners opt to sell and become renters. Commissions Falling Alongside Refis: Loan officer commission dropped 17% YOY in Q3 2021 as rising interest rates cause refi slowdowns. Meet The New Boss?: The White House is asking…
Some homeowners have opted to sell their houses rather than restart their active forbearance plans, leading to a 13% increase year-over-year in the nation’s supply of affordable homes. “The end of forbearance has forced many lower-income Americans to put their homes up for sale and become renters,” said Redfin Chief Economist Daryl Fairweather. “This has caused the number of affordable homes on the market to surge, helping replenish inventory amid an acute housing shortage. It’s a rainstorm after a long drought, but the drought isn’t over yet.” Forbearance exits picked up in the final week of October, according to Black Knight’s blog, Vision. The number of loans in active forbearance fell by 6.9%, with 85,000 homeowners exiting their plans. Forbearance…
Loan officer commission dropped 17% year-over-year (YOY) in Q3 2021, according to SimpleNexus’ Q3 mortgage loan compensation report. The report cites declining loan volume as the main factor in commission declines, while a roughly 15% rise in loan officer staffing contributed to a ⅓ drop in individual processor incentive compensation. Per-loan commission rates have started falling as well, dropping 2.44% YOY from 102.88 to 100.37 basis points. Declining refinance activity had the biggest impact. Monthly refi commission dropped 37%. Refis have been falling steadily as rates tick up, resulting in the slowest weekly pace of refinancing since January 2020. Interest rates reached 3.14% last week. “We continue to expect weakening refinance activity as rates move higher and borrowers see less…
Good Morning! Today is Thursday, November 4. OSHA is expected to release its ’emergency order’ mandating vaccines for employees of large businesses. The U.K. approved a pill designed to treat symptomatic Covid. The attorney for the armorer on “Rust” suggested the live round that killed a woman may have been an act of “sabotage.” And in mortgage and housing news… Fed Says Tapering Is On: The Federal Open Market Committee laid out a framework for tapering its emergency bond-buying, but rate hikes weren’t discussed. Affordable Housing Up: The supply of affordable homes jumped 13% YOY in Q3, though supply dropped in the luxury market. Will Rising Rates Help Or Hurt?: Rising interest could hurt homebuyers by raising their monthly payments,…
The supply of affordable homes in the U.S. rose 13% year-over-year (YOY) in Q3, increasing at a record pace of 1.6% YOY, according to a Redfin report. The report suggests the increase in affordable homes is due to forbearance programs ending, forcing many owners of low-cost homes to put them on the market. As forbearance programs launched in reaction to the Covid-19 pandemic come to a close, many homeowners are putting those houses on the market. More than 450,000 homeowners have exited forbearance plans in the first two weeks of October. “The end of forbearance has forced many lower-income Americans to put their homes up for sale and become renters,” said Redfin Chief Economist Daryl Fairweather. “This has caused the…
The Federal Reserve outlined a plan to begin tapering its emergency bond purchases. The purchases of $120 billion per month in Treasuries and mortgage-backed securities (MBS) were a government effort to keep financial markets afloat after the economic fall out from Covid-19. The Federal Open Market Committee (FOMC) met for two days this week then released a statement saying the Fed will begin tapering those purchases later this month. It will reduce its purchases of Treasury securities from $80 billion to $70 billion and from $40 billion to $35 billion for mortgage-backed securities. “In light of the substantial further progress the economy has made toward the Committee’s goals since last December, the Committee decided to begin reducing the monthly pace…
Good Morning! Today is Wednesday, November 3. Republican Glenn Youngkin won the Virginia Governor race, while New Jersey’s is too close to call. The Federal Reserve is likely to announce that it will begin steadily reducing its bond-buying program. The Atlanta Braves won the World Series. And in mortgage and housing news… Mortgage Applications Down: Mortgage applications dropped 3.3% last week, according to MBA’s weekly survey. Zillow iBuying Up In Smoke: Zillow is giving up its iBuying arm, Zillow Offers, after losing $381 million last quarter and will be laying off 25% of its staff. October Home Prices Up: Clear Capital’s October 2021 Home Data Index found home price growth was up 5.3% from last quarter, and up nearly 20%…
