Category Archives for "Real Estate Trends"

“Revival in the Housing Market: Understanding the Surge in U.S. Pending Home Sales”

The National Association of Realtors® (NAR) reported a further 7.7% decline in pending home sales for April. The NAR’s Pending Home Sales Index (PHSI) stood at 72.3, down from 78.3 in March. This Index, which measures the purchasing agreements for previously owned houses, townhomes, condos, and co-op apartments, was also 7.4% lower compared to the same month last year. Lawrence Yun, NAR Chief Economist, attributed the slump to increased interest rates throughout the month which, despite increased market inventory, have made it harder for potential buyers to buy homes. However, he also anticipated improvement as a result of the Federal Reserve’s planned rate cuts later in the year, expressing hope for increased affordability and supply. A comparison of the national PHSI since the Federal Reserve began increasing interest rates shows a noticeable decrease in home sales. The Index averaged 115.2 in 2022 and 91.9 in 2023, but hasn’t passed 78.5 at any point this year. Every major region displayed losses on both a monthly and yearly basis. The PHSI for the Northeast dropped 3.5% from March and 3.1% year-on-year to 62.9. The Midwest index saw a 9.5% decrease to reach 70.7, an 8.7% fall from last year. In the South, the PHSI was down 7.6% and 8.2% compared to previous periods, now standing at 88.6. Lastly, the index in the West declined 8.5% from March and 7.3% from last year, resting at 55.9.

Continue reading

“Exploring the Future Impact of Technological Advances on the Mortgage Industry: A Comprehensive Review”

In the intensely competitive landscape of lending and vending, there are strict regulations keeping the mortgage industry in check. A point of focus during the recent MBA Secondary Conference presented by MBA CEO Bob Broeksmit. Lawyer Brian Levy shares similar concerns regarding these regulations, however, he disagrees with Broeksmit’s proposed solutions which he voiced in his Mortgage Musings. He additionally offered thoughts on the CFPB funding case.

Because of these regulations, the cost of homeloans increases, inevitably making them more expensive for borrowers. For lenders, cost-cutting is an essential part of their day-to-day operations. They usually incur substantial personnel expenses, including LO compensations that typically amount to thousands per loan.

They also have to consider their business models. How are their loans being produced? What’s the productivity rate of their originators? How can producers who only complete a loan quarterly be compensated? All these funds need to get sourced somewhere.

This week’s podcast by American Financial Resources will be discussing these matters. They are a mortgage lender renowned for revolutionising the industry with streamlined processes, employing the best brains in the business, and prioritizing customer experience. They’ll also feature an interview with Tom Hutchens from Angel Oak regarding how loan originators can survive the fierce competition by tapping into the rising demand for unique products like non-QM loans and bank statement HELOCs.

Finally, a reference to the movie ‘“The Matrix’’ provides an apt metaphor for the complexities of MSR valuations. To help highlight the importance of understanding this, Optimal Blue invites you to join them on June 5 at 1 p.m. CT for their webinar, “MSR 101: How to Value the MSR Asset”. The session features Vimi Vasudeva, Brad Eskridge, and Tony Paciente, who will unravel the different assumptions that apply to MSR valuations, and how you can design your MSR assets to maximize profitability.

Continue reading

“Examining the Influence of Regulations and Technology on the Mortgage Market: An Updated Insight”

A group of researchers gathered to examine the impact of alcohol consumption on a person’s gait, with the outcome proving to be rather remarkable. There were several events during the past weekend that had far-reaching impacts. This includes a variety of occurrences, ranging from individual incidents like that concerning basketball player Bill Walton to potentially massive events such as the deadly landslide in Papua New Guinea that trapped thousands. Moreover, there was a deadly attack by Israel on Hamas that claimed more than 40 lives. The United States experienced severe tornadoes that resulted in more than 20 fatalities and severe property damage. Despite the discourse about global warming and climate change, an airline has commenced services exclusively for pets, charging a hefty $6k per trip. On a smaller scale yet significantly influential, lenders are persistently seeking ways to cut costs. Some have resorted to charging for Verification of Employment (VOEs), thereby adding extra steps or making the process manual. Their survival strategy continues to depend on a multitude of factors. Switching focus to financial services, this week’s podcasts, sponsored by American Financial Resources, discuss the innovative steps the mortgage lender is taking to streamline processes and enhance customer experience. Today’s episode features an interview with Prudent AI’s Paul Gigliotti on how lenders can approve loans at the click of a button. Also up for discussion are the services, products, and software available for lenders and brokers.

Continue reading

“Examining Future Housing Trends through Today’s Financial Lens”

Many argue that persevering in the housing loan market under the current circumstances is a madman’s game, especially with little signs of significant improvement. However, resilience remains among vendors and lenders struggling to break even or facing financial losses each quarter. My recent experiences in Manhattan suggest that a surge in second mortgage programs and home equity lines of credit (HELOCs) is on the horizon, given the abundance of property equity available. Notably, loan officers understand that these properties are homes and not mere real estate assets, prompting owners to consider how a second mortgage could be beneficial. While some clients view their homes as financial assets similar to stocks, the real estate market’s cycling nature mirrors the economic landscape change. Today at 3 PM ET, Bill Dallas joins The Big Picture to address topics like credit reporting companies, changes after the post-National Association of Realtors (NAR) agreement, among others. Additionally, Truv sponsors this week’s podcasts, offering tools like income, employment, and other verification services to unlock the potential of transparent finance. The episode also involves an insightful conversation with Experian’s Ken Tromer and Jamie Norris on strategic cost optimization for mortgage firms using Experian Verify and Power Profile Plus. At last, we’ll also delve into Lender and Broker Services and Products. Please avoid referring to the original source in the discussion.

Continue reading

“Analyzing the Ups and Downs: A Detailed Look at April’s Existing Home Sales”

From March to April, there was a surge in the available inventory of pre-existing homes on the market; however, this did not lead to a boost in sales. According to industry data, the sales rate for used single-family homes, townhouses, condos, and co-ops was down by 1.9 percent when compared to March and the same period in the previous year, despite an expanded housing inventory. The end of April saw a total of 121 million housing units available for purchase, marking a rise of 9percent from the previous month and a substantial 16.3 percent increase from the prior year. This increased supply equates to a 3.5-month supply, increasing from a 3.2 and 3.0-month supply at two earlier comparative periods. However, a half-year supply is generally deemed necessary for equilibrium in the housing market. The upper end of the market encountered a substantial rise, with a 34 percent increase in homes listed at $1 million or above, and sales within this bracket rose by 40 percent. In April, properties typically stayed on the market for 26 days, less than the 33 days in March but more than the 22 days during the same period in the preceding year. Additionally, Lawrence Yan, a chief economist, highlighted that while overall home sales saw little change, the high-end sector is greatly benefiting from the surge in inventory. Single-family home sales experienced a drop of 2.1 percent, settling at a seasonally adjusted annual rate of 3.74 million, a decrease from 3.82 million in March. Sales in this category were 1.3 percent lower compared to the previous year. Sales of condos and co-ops remained steady at 400,000 units, which is still 30,000 less than April of the previous year.

Continue reading

“Booming Construction: An Insight into the Increasing Completion of Homes”

The most recent statistics concerning new domestic construction, provided by the U.S. Census Bureau, present a varied perspective of the property industry. There was a significant rise in housing completions in April, a slight uptick in housing starts, and a dip in the issuance of building permits, reaching their lowest level since the prior summer. Let’s delve into the seasonal adjusted annual rates for the three construction phases:

Building Permits

Predictions were at 1.48 million, but actual figures were 1.44 million, a decrease from 1.467 million the previous month

This includes 976,000 single-family permits and 408,000 for five or more units

Housing Starts (initiation of construction)

While expectations were set at 1.42 million, the actual numbers were 1.36 million, an increase from 1.29 million the prior month (which was revised down from 1.32 million)

Of these, 1.031 million were single-family starts and 322,000 were for five or more units

Housing Completions

The number rallied to 1.62 million from 1.495 million the preceding month, showing an upturn of 10.3 percent

This encompasses 1.092 million single-family completions and 516,000 for five or more units

Rather than focusing on the small, monthly transitions in this typically inconsistent data series, it’s essential to look at the wider outlook in which permits and starts have remained stable for more than twelve months, whereas completions persist in their elevation. A broader viewpoint reveals similar trends but also emphasizes the steadiness in starts and permits compared to their pre-pandemic peaks.

Continue reading

“Exploring the Unexpected Surge in Homebuilder Confidence: A Deep Dive into the NAHB Report”

This month has seen a decrease in the confidence of builders in the new housing market, the first drop observed since last November. This comes as the NAHB/Wells Fargo Housing Market Index (HMI), an indicator of builder perceptions on new single-family home sales, slips 6 points from its April standard to 45. The HMI, for over 35 years, has been inspecting builder beliefs of present home sales and their six-month forecasts, categorized as “good,” “fair” or “poor,” and judging builders’ perception of potential buyer traffic as “high to very high”, “average”, or “low to very low”. When the HMI or any of its components score above 50, it means more builders view the sales environment as favorable. However, all three key HMI indices underwent substantial dips in May. Against the backdrop of consistently high mortgage interest rates hovering above 7% for the past month, NAHB economist Robert Dietz identifies this as the trigger behind the downturn. As mortgage rates rise, potential buyers are deterred, which in turn cools the market. Also, unmitigated inflation has caused a rise in long-term interest rates in past months, further stymieing builder optimism. Ultimately, Dietz says that increasing accessible, affordable housing can help ease shelter inflation – a significant milestone in countering inflation.

Continue reading

“Exploring the Impacts of Current Events on Mortgage Trends: An In-Depth Analysis”

As we approach the imminent MBA conference in New York City, it’s pertinent to recall that humans possess five unique senses. Among these, the sense of smell is often considered the least appreciated. However, hotel chains have never underestimated its importance and have mastered the art of ensuring their establishments emit pleasing scents. Similarly, it’s notable to mention that professionals in secondary and capital markets aren’t keen on fluctuations in rates. They prefer a landscape where renegotiations or extension requests don’t inundate their correspondence or negatively impact their profit and loss statements. To hedge their exposure, these individuals employ generic mortgage-backed securities.

Imagine a mortgage-backed security without mortgages, olive oil without olives, or canola oil without canola – sounds absurd, right? (Although, this logic might not apply to baby oil.) Take a Swiss Army Knife, for instance. Would it still hold its name if it bore no blade? In a remarkable innovation, Carol K. from Indiana shared the idea of a Swiss Army Knife devoid of the knife feature, making it airplane-friendly – quite a revolutionary concept. What could possibly be next? Rolling luggage, perhaps? On a related note, this week’s podcasts are sponsored by LoanCare. Known for its excellent customer service, the mortgage subservicer offers customization and convenience. The company’s award-winning product, LoanCare Analytics, is tailored to create a positive customer experience, support liquidity, and minimize credit risk. An upcoming interview features Vesta’s Mike Yu discussing current technological capabilities and the rate of adoption in the mortgage industry. Let’s not forget about software, products, and services for Lenders and Brokers – essential components of this industry.

Continue reading

“Exploring the Landscape of Mortgages: Insights & Updates for 2024”

My pet dog has an interesting name, ‘5 Miles.’ The underlying humor is that when I speak about my daily routine, I get to say, ‘I walk 5 Miles everyday.’ In other news, I embarked on a trip to Yosemite National Park early today, with camping, mountain biking, and treks on my to-do list. Despite hosting millions of visitors yearly, the park continues to awe, registering close to 4 million visitors out of the 325 million people who visit national parks. This is a fascinating insight considering major US locations such as the Blue Ridge and Golden Gate’s National Recreational Area, both boasting over 15 million.

Observing United States’ shifting demographics, we see signs of resurgence in the South. Lately, Austin, Nashville, and San Antonio lead with the highest percentage of newly constructed housing units, close to 5 percent each. This trumps the national average of 1.95 percent across the country’s 50 largest metropolises with 75.89 million housing units built over the last couple of years. Interestingly, three Northeast cities, Hartford, Buffalo, and Providence, show the smallest percentage of new constructions in their housing supply.

In other news, this week’s podcasts are brought to you by Essex Mortgage. The company takes pride in offering bespoke mortgage subservicing solutions. If you’re seeking to optimize your excess servicing strip, exploring Essex’s offerings might prove useful. Also, tune in for an interview with Christy Beck of Caruso Home and Skye Laudari of Crib Equity as they delve into affordability issues and their prospective solutions from a builder and product viewpoint.

Lastly, on lender and broker products, software, and services, it’s interesting to draw parallels between the formation of microclimates by waterfalls and the potentially perfect ecosystem lenders can create with their financial processes. Similar to how cascading water generates an environment congenial for substantial plant development, lenders can enhance their success rate by adopting a cascade of income and employment verification solutions. With a consumer-permissioned VOIE data at the apex of the process, lenders can significantly enhance their verification success rate and reduce associated costs by an impressive 80 percent. For further details on this methodology, this article provides a comprehensive understanding.

Continue reading

“Unpacking the Surge in U.S. Home Prices: An In-depth Analysis”

The upward trend in residential property values continued through February, despite concurrently rising interest rates. Both the S&P CoreLogic Case-Shiller Indices and the Federal Housing Finance Agency’s Housing Market Index recorded about 7 percent annual growth in home prices. Case-Shiller’s nationwide index, covering all nine U.S. census divisions, indicated a 6.4 percent annual increase in February, which is an increment from the previous month’s 6.0 percent growth. Similarly, there were notable increases in the 10-City and 20-City Composites, rising to 8.0 percent and 7.3 percent respectively from 7.4 percent and 6.6 percent in January. San Diego had the most significant year-on-year appreciation among the 20 cities at 11.4 percent, followed by Chicago and Detroit, which both saw a growth of 8.9 percent. On the other hand, Portland recorded the most minor rise at 2.2 percent. February marked the first monthly increase since November for all three non-seasonally adjusted indices: the National Index went up by 0.6 percent, the 20-City by 0.9 percent, and the 10-City Composite grew by 1.0 percent. With seasonal adjustment, all indices recorded a minor increment. Brian D. Luke, Chief of Commodities, Real & Digital Assets at S&P Dow Jones Indices, expressed that U.S. housing prices maintain an ongoing uptrend. The National Composite saw an accelerated annual increase of 6.0 percent in January, the quickest rate since 2022. For a third month, all cities reported an increase in annual prices, with San Diego, Los Angeles, Washington, D.C., and New York reaching record highs. When seasonally adjusted, the National, 10- and 20- City Composite indices persist in surpassing last year’s peaks.

Continue reading
1 2 3 13