The contribution made to household wealth by homeownership is underlined in ATTOM Data Solutions' third-quarter U.S. Home Sales Report. The company said that a typical homeowner who sold a home during the quarter had a gain of $85,000. This was $10,000 more than that realized by sellers in the previous quarter and up from $66,000 in the third quarter of 2019. This typical home-sale profit represented a 38.6 percent return on investment (ROI) compared to the original purchase price. The typical ROI in the previous quarter was 37.5 percent and it was 33.7 percent a year ago. The report says that both the raw-profit and return-on-investment figures were the highest since the U.S. economy began recovering from the Great Recession in 2012. They represent a continued increase even as the Coronavirus pandemic has damaged the economy and led to spikes in unemployment throughout the country this year. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The number of FHA and VA loans in forbearance rose slightly last week, however, the overall numbers of forborne loans fell nationally by 11,000. Black Knight's weekly survey of the COVID-19 mortgage forbearance measures found that, as of October 20, there were 2.98 million borrowers in active plans, 5.6 percent of the nation's 53 million active loans. About 5,000 loans were added to the number of loans in portfolios serviced for FHA and VA investors, bringing the total to 1.155 million loans or 9.5 percent of the total. Loans serviced for investors in GSE securities (Fannie Mae and Freddie Mac) declined by 14,000 to 1.09 million or 3.9 percent of those 28 million active mortgages. There was a 2,000-loan decrease in portfolio-held and private label securitized (PLS) loans to 729,000, 5.6 percent of the total. The total unpaid principal balance of these loans is $616 billion. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Existing home sales rose again in September and are now blowing the doors off last year's numbers. The National Association of Realtors® says sales of single-family homes, townhomes, condominiums, and co-ops, rose 9.4 percent from August to a seasonally adjusted annual rate of 6.54 million units in September. After four straight months of increasing sales, the seasonally adjusted rate is now 20.9 percent higher than in September 2019. Single-family home sales rose 9.7 percent month-over-month to a seasonally adjusted rate of 5.87 units and are now 21.8 percent higher than a year earlier. Existing condominiums and co-ops sold at annual rate of 670,000 units, increasing 6.3 percent and 13.6 percent from the two earlier periods. Analysts had expected sales to remain on a winning streak but were looking for an annual rate of 6.2 million sales. Forecasts of those polled by Econoday ranged from 5.8 million to 6.4 million units, all falling short of the actual number. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The refinancing share of originations increased again in September, rising 2 points to 58 percent of all loans. Ellie Mae's Origination Insight Report for September shows the increase came almost inclusively in conventional loans where the refi share jumped 5 points to 66 percent. The refinancing share of VA loans rose 1 point to 20 percent while the FHA share was unchanged at 15 percent. The reciprocal share, 42 percent, of purchase mortgages is a significant drop from 50 percent in January, but Ellie Mae notes it is well above the May low of 35 percent of all closed loans. The increase in refinancing was undoubtably in response to a further decline in the 30-year note rate. The average for all loans was 3.00 percent, down from 3.09 percent in August. Ellie Mae said this rate was the lowest since it began tracking the data in 2011. The average for conventional loans was 3.02 percent; 3.01 percent for FHA loans and 2.78 percent for VA loans. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Purchase mortgage originations are expected to hit a new record high of $1.54 trillion next year. That forecast, which would be an increase of 8.5 percent over the projected total in 2020, was made at the Mortgage Bankers Association's (MBA's) virtual 2020 Annual Convention and Expo by Mike Fratantoni, Chief Economist and Senior Vice President for Research and Industry Technology; Joel Kan, Associate Vice President of Economic and Industry Forecasting; and Marina Walsh, CMB, Vice President of Industry Analysis. While purchase mortgages will gain ground, the three say that, after a nearly 80 percent jump in refinance activity this year, those originations are predicted to slow next year, decreasing by 46.3 percent to $946 billion. MBA expects that, with record-low mortgage rates driving borrower demand, mortgage originations will total $3.18 trillion in 2020 - the most since a total of $3.81 trillion in 2003. In 2021, mortgage originations are expected to fall to around $2.49 trillion, which would still be the second-highest total in the past 15 years. At $1.54 trillion, next year's purchase originations would eclipse the previous all-time high of $1.51 trillion in 2005. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
40 million people have already cast their vote in the election is unprecedented. I can hardly wait to return to “precedented times,” “unprecedented” favored to win “Word of the Year” in 2020. Even the colors are unprecedented. When I was a kid, people would paint their room or house white. Maybe green, or a bold shade of beige. That’s all gone out the proverbial window as current house & room colors include Muslin, Foggy Morning, Rosy Peach, Beacon Hill Damask, Potters Clay, or Amazon Soil. And the “Color of the Year” award goes to… Aegean Teal! (Go ahead and takes those gallons of Adriatic Teal to the dump, they’re passe.) It is more fun to talk about creative colors than the unprecedented debt being issued by countries around the world, which economists tell us leads to higher rates, which in turn leads to fewer rate & term refis. But hey, with all this house price appreciation, is some cash out refi action in our vision for 2021, especially in the Agency sector? Meanwhile nearly every lender is working hard, focusing on helping clients. Ordinarily there would be a certain amount of planning around Halloween, of course. Someone in capital markets will have to wait until 2021 to take the prize with their “hedgehog” costume. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The most recent Fannie Mae's Lender Sentiment Survey focuses on the complexities of lending to the condominium market. The company stresses that this type of housing can play an important role in narrowing the supply gap for affordable housing options as well as providing an attractive alternative for homeowners seeking to downsize. However, since the great recession, there has been a significant shortage of both new and existing units for sale. Condos represent 8 to10 percent of the mortgage market but tend to exist primarily and thus play a larger role in many urban areas. They also present unique risks given the financial responsibility owners share for the operation and maintenance of the common areas and shared amenities. Lenders may also face increased time and costs due to the complexity of underwriting condo project eligibility....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The Mortgage Bankers Association (MBA) says there was little change in mortgage application activity during the week ended October 16. MBA's Market Composite Index, a measure of mortgage loan application volume, dipped 0.6 percent from the prior week on a seasonally adjusted basis and was down 1.0 percent unadjusted. Refinancing was also flat. The Refinance Index increased 0.2 percent from the previous week although activity remained well ahead of a year earlier, up 74 percent. The refinance share of mortgage activity increased to 66.1 percent of total applications from 65.6 percent the previous week. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Mark Calabria, director of the Federal Housing Finance Agency (FHFA) used the annual convention and expo of the Mortgage Bankers Association to announce changes in the agency's requirements for certain operations of the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. FHFA is seeking comments on a proposed rule requiring the GSEs to provide advance notice to FHFA of new activities and to obtain prior approval before they launch any new products. The rule establishes revised criteria for determining if such notice is required and determining if an activity is a new product that merits public notice and comment. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Residential construction resumed its upward trend after a brief pause in August. The U.S. Census Bureau and Department of Housing and Urban Development reported that all three measures of construction, permitting, housing starts, and unit completions, increased in September. Permits for privately owned residential construction were issued at a seasonally adjusted annual rate of 1,553,000, up by 5.2 percent from the 1,476,000-unit annual rate (revised from 1,416,000) in August. The increase from the previous September's rate of 1,437,000 units was 8.1 percent. Analysts had expected permits to recover from their slight (0.9 percent) downturn in August but those polled by Econoday had a consensus of only 1,451,000 units. Even the high end of their 1,375,000 to 1,500,000 forecast range was well below the actual number. Single-family permits rose 7.8 percent to an annual rate of 1,119,000 units and was 24.3 percent higher than a year earlier. The August estimate was revised slightly higher, from 1,036,000 to 1,038,000. Permits for construction in buildings with five or more units rose 1.0 percent to 390,000, however this is 22.2 percent below the pace a year earlier. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
While applications for new home purchase mortgages jumped in September, the Mortgage Bankers Association (MBA) expects only modest changes in the September sales data. MBA's Builder Application Survey (BAS) data shows mortgage applications for new home purchases increased 38.2 percent in September compared to a year earlier but were down 5 percent from August 2020. The latter change does not include any adjustment for typical seasonal patterns. MBA estimates new single-family homes were selling at a seasonally adjusted annual rate of 869,000 units in September 2020. This estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. The estimate is a decrease of 0.2 percent from the August sales rate of 871,000 units. On an unadjusted basis, MBA estimates that there were 67,000 new home sales during the month, down 1.5 percent from 68,000 sales in August. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
For only the second time in its 35-year history, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) topped 80 this month. The first time was in September. The index, a measure of builder confidence in the market for newly built single-family homes increased two points to 85, breaking the previous high of 83 set last month. "Traffic remains high and record-low interest rates are keeping demand strong as the concept of 'home' has taken on renewed importance for work, study and other purposes in the Covid era," said NAHB Chairman Chuck Fowke. "However, it is becoming increasingly challenging to build affordable homes as shortages of lots, labor, lumber and other key building materials are lengthening construction times." ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
There were approximately 7.5 million second homes in the U.S. in 2018, the most recent year for which data is available. This is 5.5 percent of the nation's total housing stock. Na Zhao, writing in the National Association of Home Builders (NAHB's) Eye on Housing blog, says the largest share of these homes are in Florida with a total of 1.1 million homes, 14.5 percent of the country's total. The fewest homes, only 20,000, were in South Dakota NAHB defines a second home as one that qualify for the home mortgage interest deduction using the Census Bureau's 2018 American Community Survey (ACS). This does not include houses held primarily for investment or business purposes nor does it include homes under construction. ...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Last week Black Knight reported that the beginning of October saw a decline in the number of active forbearance plans of 649,000 or 18 percent as many plans reached the end of their initial period. It was the largest single week decline since the crisis began. This week the number of loans in forbearance edged up a bit. The company reported an increase of 19,000 plans, bringing the total to just under 3 million. Despite the increase, the share of mortgages in forbearance held steady at 5.6 percent. Forbearances peaked at 4.76 million plans in late May. All investor classes saw slight upticks during the week. GSE forbearances rose by 3,000 to 1.11 million or 4.0 percent of the total portfolios and both FHA/VA and Portfolio and private label securities(PLS) forbearances increased by 8,000. This brought total FHA/VA loans in plans to 1.15 million, 9.5 percent of the total and portfolio/PLS forbearances to 731,000 or 5.6 percent. Seventy eight percent of forbearance plans have had their original terms extended....(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The pandemic is endangering the credit histories of at least 30 million Americans and possibly threatening the shelter status of many of them. The Mortgage Bankers Associations' (MBA's) Research Institute for Housing America (RIHA) said on Friday that over 6 million households missed making rent or mortgage payments in September and 26 million individuals did not make payments on their student loans. The number of missed payments for rent and mortgage payments did decline slightly from the second quarter but 2.82 million households failed to pay their rent on time and in full in September while 3.37 million homeowners missed, delayed, or made a reduced mortgage payment. These numbers represent 8.5 percent of the renter population and 7.1 percent of homeowners. The share of student debt borrowers who missed a monthly payment has remained at 40 percent since May. "Rent and mortgage payment collections improved over the summer as more people went back to work, but high unemployment continues to place hardships on millions of U.S. households. There is growing concern that absent a slowdown in the number of coronavirus cases and another round of much needed federal aid, millions of households in the coming months face the prospect of falling further behind," said Gary V. Engelhardt, Professor of Economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University. "With the current eviction moratorium expiring in January, the situation could be even more challenging for renters. Many renter households across the country could find themselves with no place to live and no means to repay missed payments."...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.