Understanding the Latest Trends in Home Prices: Insights from the Case-Shiller and FHFA Reports

In April, two prominent home price indexes diverged in their assessments of annual home price growth, though both indicated significant month-over-month gains. The S&P CoreLogic Case-Shiller U.S. National Home Price Index showed a slowdown from March, whereas the Federal Housing Finance Agency’s (FHFA’s) Home Price Index (HPI) reported higher values. Case-Shiller’s non-seasonally adjusted National Index covering all nine U.S. census divisions decreased from a 0.7 percent annual growth in March to a 0.2 percent decline in April. Both composite indexes marked an improvement over the prior month’s decline. The 10-City Index fell by 1.2 percent annually in April compared to 0.7 percent the previous month, while the 20-City Index saw a 1.7 percent annual loss, down from 1.1 percent. Miami experienced the highest 12-month gains among the 20 cities at 5.2 percent. Chicago entered the top three for the first time with a 4.1 percent gain, and Atlanta climbed to third place with a 3.5 percent increase, displacing Charlotte. Seventeen of the 20 cities had lower annual price changes than the previous

“Revamping the Landscape: Unpacking Trends in Residential Construction – 2020 Analysis”

May experienced a decline in both construction permitting and the commencement of residential construction, marking the third consecutive month of permitting reducing. According to reports by the U.S. Census Bureau and the Department of Housing and Urban Development, residential permits were issued at an adjusted annual rate of 1.386 million, a decrease of 3.8 percent from the estimated 1.440 million units in April. This is also 9.5 percent slower than the same month in the past year. The issued permits for single-family constructions were at an annual rate of 949,000, while multifamily approvals stood at 382,000. This represents a reduction of 2.9 percent and 6.1 percent respectively, indicating a year-over-year increase of 3.5 percent in single-family permits but a staggering 31.4 percent drop in multifamily permits. The month also saw housing starts decrease by 5.5 percent to 1.277 million, from 1.352 million in April, a substantial 19.3 percent decline compared to the same month last year. Single-family starts fell below 1 million for the first time since October, at 982,000 which is a 5.2 percent reduction from April and 1.7 percent decrease year-over-year. Multifamily starts were noted at a rate of 278,000 showing a significant 10.3 and 51.7 percent reduction from the prior periods respectively. Despite Econoday’s polled analysts predicting a minor increases in permits and starts over their April figures, with a consensus forecast of 1.450 million permits and 1.373 million starts, these declines were observed instead.

“Inside the Mortgage Industry: Trends, Updates, and Essential Information for Loan Officers”

During World War II, my grandfather was held accountable for the downfall of 25 German aircraft, earning him the dubious distinction of being the Luftwaffe’s most incompetent mechanic. As we commemorate D-Day, we aspire for a world devoid of war, despite the historical recurrence of human conflicts.

On a much smaller scale, this repetitive motif is also perceivable in various conferences and private functions, the most recent ones being the MBA New Jersey, which was attended by my son Robbie, and the Bay Equity event in San Diego that I am attending. Lending institutions are focusing on key issues, such as decreasing operational costs, including those seen by loan seekers with regards to closing costs – a topic highlighted by the White House and regulatory authorities in their bid to reduce housing expenses.

In pursuit of borrower acquisition and retention, lenders are leveraging all available benefits while enhancing operational efficiencies, all in an effort to assist loan originators. Another crucial consideration is whether to maintain or relinquish servicing, due to its potential long-term business effects. Our current environment is challenging and in stark contrast to the situation four years ago when hiring was rampant.

Today’s podcast, sponsored by Visio Lending – the leading lender for buy and hold investors with more than 2.5 billion in loans closed for single-family rental properties including vacation homes – features an engaging conversation with PCV Murcor’s Marc Tatarcuk. The discussion delves into how Appraisal Management Companies source and assign appraisers, the role of Artificial Intelligence in the appraisal sector, and an overview of the present appraisal landscape.

“Exploring the Intricacies of Mortgage and Real Estate Industry: A Comprehensive Insight”

Swiftness of time is undeniable; it feels like yesterday when the spectacle known as “Tiger King” was the talk of the town. Now we are back in the throes of summer, which some claim to be the most heated in the centuries past. However, I prefer to frame it optimistically as the chilliest summer for the centuries to come. Regardless of our personal standpoints on climate change, forest conservation, or heightened storm damage, the fact remains that critical entities, such as insurers, government sectors (Freddie and Fannie included), prominent investors, service providers, and rating agencies, are either currently revising their pricing structure, or aspiring to. These shifts inevitably seep into the life of your borrowers.

One striking instance is the homeowners’ insurance scenario. Loan officers have recounted numerous instances where clients could manage the mortgage payment but the steep monthly insurance premiums made the project unfeasible. Besides, the devastating effects of natural disasters like wildfires, tornadoes, hurricanes, and flooding on the housing stock is concerning.

For more insights, tune into our recent podcast episode here, featuring our valued sponsor, Visio Lending. Visio is the leading lender for long-term investors, with a portfolio that includes more than 2.5 billion closed loans for single-family rental properties, vacation rentals included. The episode unveils a fascinating conversation with Carrington’s Steven Winokur that explores the non-QM space, its course, and investor interest. You’ll also find a roundup of software, products, and services for lenders and brokers. Please note that the source of information won’t be mentioned in this summary.

“Exploring the Future of Green Housing and Real Estate Transformations: A Comprehensive Insight”

With the summer solstice just three weeks away, we can still host hope for more sun as the day length in the Northern Hemisphere continues to grow, and the Southern Hemisphere becomes the go-to for sun worshippers. On the other hand, the belief that presidential administrations or Federal Reserves can completely do away with business cycles is a misconception. And those basing their business models on reduced rates might be taken aback by this revealing chart from the Federal Reserve.

Today’s financial “Rundown” features Christy Beck, who serves as both the Corporate Director of Sales and Marketing for Caruso Homes and the current President of the Raleigh-Wake County Home Builders Association, one of the biggest of its kind in the nation.

In an age where privacy seems to be dwindling, it raises questions as to why companies insist on retaining substantial amounts of personal data. Such practices expose us to risks like the Ticketmaster data breach where our information is sold to malicious entities. Further emphasizing the need to minimize data collection to essential transactions only.

This week’s podcasts, brought to you by the innovative mortgage lender, American Financial Resources, offer an enlightening conversation with Tim Braheem. He shares valuable insights on how originators can foster relationships with agents in the current market, and diversify their referral sources to avoid over-reliance on realtors.

Also, keep an eye out for the latest software, products and services designed to assist Lenders and Brokers in the market.

“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.

“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.

“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.

“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.

“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.