By KIMBERLEY HAAS
The CEO of Land Gorilla says advancements in technology are creating opportunities for more profitable construction lending.
Sean Faries said since the California-based technology service provider for banks, credit unions, and mortgage bankers started in 2010, there has been a move from spreadsheets to digitization.
Land Gorilla is now taking things a step further, allowing lenders to build their own workflows with automation to complement them.
“We are creating efficiencies for the financial institution that’s utilizing the software, where they’re able to reduce headcount or they’re able to improve processing times at such a magnificent return that the software far pays for itself,” Faries said.
Faries said that they use machine learning combined with “a lot of…
Rates at 20-year highs and other ongoing issues forced affordability to hover near a decade-low in Q4 2023, constraining the housing market.
A new report from the National Association of Home Builders revealed that housing affordability stayed close to its lowest level in about a decade in the last quarter of 2023. Just 37.7% of new and existing homes sold in that period were affordable to families earning the U.S. median income of $96,300.
This is basically identical to Q3 2023, which posted the lowest-ever reading of the NAHB/Wells Fargo Housing Opportunity Index. That index has been tracking affordability since 2012.
The report attributes the data to rates hitting a 20-year high during Q4, along with the high cost of…
By PATRICK LAVERY
When the Federal Open Market Committee meets this week analysts will be looking for signs of what’s next and it may be anyone’s guess.
At the Mortgage Bankers Association’s annual convention and expo in Philadelphia this month, MBA Chief Economist Michael Fratantoni told attendees that they expect the Feds will maintain the federal funds rate target range and do not expect an increase from them again this year.
Fratantoni projected there will be at least two cuts in 2024, and possibly more in 2025. But then Patrick Harker, the president and CEO of the Federal Reserve Bank of Philadelphia, took the stage the next day and said rates may have to stay high in order for them…
By KIMBERLEY HAAS
The president and CEO of the Federal Reserve Bank of Philadelphia knew he was facing a tough crowd when he took the stage during a Monday morning session at the Mortgage Bankers Association’s annual convention and expo.
“I stand here this morning fully aware of the mood in this room and I am also fully aware of the way the actions we on the FOMC have taken over the past 18 months in our efforts to tame inflation to get it back to a 2% annual target have, in their own way, contributed to the current mortgage climate,” Patrick Harker said.
Harker said he met with community members this summer to see firsthand the impacts that monetary…
By CHUCK GREEN According to experts, not only is the housing market expected to continue cooling this year, the forecast remains chilly entering 2023. Real house prices jumped 10.5% in September and logged a 60.6% YOY increase, according to First American’s Real House Price Index. But prices fell in 15 out of the top 50 markets they analyze. Mortgage originations saw their largest annual decline in 21 years this fall, further evidence that the housing boom is coming to an end. Originations fell 47% YOY in Q3, according to ATTOM Data’s Q3 2022 U.S. Residential Property Mortgage Origination Report. Quarter-over-quarter they were down 19%, the sixth consecutive drop. So, what in the name of the cranky barometer’s up? For one thing, surprise, surprise,…
By KIMBERLEY HAAS The vice president of research at the National Multifamily Housing Council says 4.3 million new apartments will be needed by 2035 to meet demand. Caitlin Walter spoke at the National Association of Real Estate Editors conference on October 13. She is primarily responsible for conducting NMHC’s research on apartment industry trends, according to the council’s website. Walter said there were 737,000 apartments under construction in 2021. “The issue is that it takes a long time to build an apartment community, and we’re not actually seeing those under-construction numbers turn into completions. And that is largely due to the delays that started during the pandemic that have continued to persist,” Walter said. Walter referred to a study the…
By KIMBERLEY HAAS The executive director of the New Hampshire Home Builders Association says the biggest problem they are currently facing is unstable prices due to inflation. In a recent interview with The Mortgage Note, Matt Mayberry explained that contractors are trying to stay within their budgets on projects but it is difficult because prices are volatile due to inflation and supply chain issues. It’s also difficult to bid on upcoming work. “How do we estimate jobs correctly? What are the metrics we use to do this?” Mayberry said. One thing that has improved, Mayberry said, is the waiting time for projects to be completed. During the pandemic, many projects were pushed out to a year and a half for…
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.…
Single-family growth cooled in Q4 2021 while multifamily growth in high-density areas surged, according to the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI). The HBGI is a quarterly measurement of building conditions across the country and uses county-level information about single- and multifamily permits to gauge housing construction growth in various urban and rural geographies. “Multifamily production posted strong gains in all regional markets as the demand for apartments increased,” said NAHB Chief Economist Robert Dietz. “Meanwhile, supply-side constraints that include ongoing labor shortages and a lack of key housing products that include garage doors, appliances and windows has delayed single-family construction times across the nation and put upward pressure on home prices.” The price of…
Pending home sales dropped 2.2% in November, a 2.7% decrease year-over-year (YOY), according to the National Association of Realtors’ (NAR) Pending Home Sales Index (PHSI). The PSHI, which predicts home sales based on contract signings for existing homes, fell to 122.4. An index of 100 is equal to signing activity in 2001. “There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices,” said Lawrence Yun, NAR’s chief economist. “While I expect neither a price reduction, nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability.” Signings declined in all four…
