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Apache is functioning normally

The Joint Center for Housing Studies of Harvard University released the 2015 edition of The State of the Nation’s Housing report this week and it wasn’t pretty.

The report basically highlighted the fact that the homeownership rate has dropped to the lowest level in recent history, while renting has simultaneously surged.

Last year, the U.S. homeownership rate fell to 64.5%, which essentially erases all of the gains realized over the past two decades.

We’ve basically returned to 1993 levels, as seen in the chart below.

It has since continued to fall, dipping to 63.7% during the first quarter of 2015.

All Generations Affected

Harvard noted that the fallout has been widespread, with all generations affected, especially generation X (born 1965-1984).

Put simply, young gen-Xers picked a terrible time to be born, succeed financially, and then buy their first home. Because as we all know, home prices were grossly inflated about 10 years ago, and have yet to recover after falling back down to Earth.

In fact, homeownership rates among those aged 35-44 and 45-54 have suffered the most, and now stand at rates 4-5% below those seen 20 years ago.

The only group that hasn’t really seen a major hit is the 65 and over cohort, which despite a recent dip, has a homeownership that remains about 2% above 1993 levels.

What’s the Rental Market Like?

If there are far fewer homeowners, there must be a lot more renters, right? Right.

From 2004 to 2013, renter household growth has averaged 770,000 annually, making it the best 10-year period for renter growth since the late 1980s.

During this period, 3.2 million single-family detached homes made their way into the rental market to accommodate demand. Developers have also added 1.2 million apartment starts since 2010.

Despite this, the national vacancy rate fell to 7.6% in 2014, the lowest point in nearly two decades.

The result has been steadily increasing rents, which rose 3.2% last year, twice the pace of inflation.

The problem is that the little more than one million housing units started last year was still close to the lowest total in the past half-century.

So while it sounds like a lot of new supply, it’s not enough to keep up with demand, especially as household growth seems to be in an uptrend.

Part of this can be attributed to Millennials growing up and making the move out of mom and dad’s house. Wage growth also contributes to that trend.

Unfortunately, there aren’t many entry-level homes available for purchase because a lot of the current owners are underwater or lack the equity to sell and use the proceeds (for down payment) to buy up.

Turnover is also going to be limited as baby boomers age and hunker down in their existing properties for the next decade.

However, 2025 may be a turning point as the oldest band of that population ages and has more trouble living independently.

Still, it doesn’t solve the problem now, which is unaffordable rent and a lack of housing inventory.

The Housing Outlook Is Cloudy

Harvard seems to be cautiously optimistic (at best) in their outlook, calling on looser mortgage lending to help more renters transition to homeownership.

Ironically, we might be in a situation that calls for creative financing, such as an increased reliance on ARMs (especially as mortgage rates rise) and more 97% LTV lending.

Rates will need to rise as the economy improves, which is generally okay as long as wages also increase. This shouldn’t dampen home prices either because a good economy goes a long way.

Harvard believes the housing recovery may continue this year, but only if employment growth lifts household incomes that are clearly lacking.

There’s a general belief that renters have a willingness to own, but they question whether renters have the means. As mentioned earlier this week, owning a home requires $10,000 outside the mortgage.

The report pointed out recent moves by Fannie, Freddie and the FHA, including lower down payment and credit score requirements, but questioned whether such changes would be meaningful.

In the meantime, renters are stuck between a rock and a hard place, with rents becoming unaffordable and homeownership unattainable.

It’s become so ridiculous that unaffordable rent may be the sole reason to buy. But it’s hard to save money for a down payment when you’re barely getting by.

Harvard ultimately believes the goal should be affordable housing for all, though they don’t seem to offer any solution to that problem.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Months of high mortgage rates and low existing inventory led to another annual increase in new home purchases in June. Mortgage applications for new home purchases jumped 26.1% in June from the same period last year, according to the Mortgage Bankers Association builder application survey. Compared with the prior month, applications dropped by 5%. 

MBA estimates that about 687,000 new single-family homes were sold in June at a seasonally adjusted annual rate. It’s a decline of 9% from the May pace of 755,000 units. On an unadjusted basis, MBA estimates that there were 60,000 new home sales in June 2023, a 6.3% decrease from 64,000 new home sales in May. 

“New home purchase activity continues to be a bright spot, as both new home applications and home sales were up on an annual basis,” said Joel Kan, MBA’s vice president and deputy chief economist. “With existing inventory still held back by homeowners, prospective buyers have turned to newly built homes instead. Rising mortgage rates in June likely caused some pullback in purchases over the month, as the 30-year fixed rate averaged close to 6.8%. However, applications for new home purchases have now shown annual increases for five consecutive months.”  

Purchase mortgage rates this week averaged 6.78%, the biggest weekly decline since mid-March, according to the latest Freddie Mac PMMS.

Homebuilders constructed an annualized rate of 1.434 million houses in June, down 8% from May and 8.1% from June 2022, according to the U.S. Census Bureau. Single-family home constructions saw a 7% month-over-month decrease to rate of 935,000 in June. 

The average loan size decreased from $403,581 in May to $400,281 in June. Conventional loans accounted for 65.5% of loan applications. Federal Housing Administration (FHA) loans composed 24.1%, Veterans Affairs (VA) loans took up 10% of total applications and Rural Housing Service (RHS) and United States Department of Agriculture (USDA) loans consisted of 0.3%. 

The survey tracks application volume from mortgage subsidiaries of homebuilders across the country. Using this data, MBA provides an early estimate of new home sales volumes at the national, state and metro level. 

Source: housingwire.com

Apache is functioning normally

Real estate investors are great for repeat and referral business—if you’re the right type of real estate agent. Hear how to be an investor-friendly agent on this podcast with James Dainard. James is a co-host on BiggerPockets’ On the Market podcast, and he’s been in this industry for over a decade. On today’s show, James shares what Realtors can do to service investors, where to find investment opportunities right now, and why all agents should niche down for more deals.

Listen to today’s show and learn:

  • James Dainard’s start in real estate [3:04]
  • Starting a real estate business in a very bad market [4:52]
  • About Heaton Dainard Real Estate [7:36]
  • Some of the best real estate clients: real estate investors [9:01]
  • The Austin real estate market and opportunities for agents [11:04]
  • How to start working with investor clients [12:05]
  • Why market adjustments have such a major impact on land values [17:10]
  • Real estate trends in Oregon and Washington [18:17]
  • Buyer clients chasing affordability [21:07]
  • Paying attention to the economy to find better business opportunities [24:15]
  • James’ recent real estate investments [27:47]
  • Educating your buyer clients [31:11]
  • How to find prospective sellers in a shifting market [33:03]
  • Why you should write your own real estate scripts [36:58]
  • Advice for brokers and real estate business owners [40:40]
  • Niching down for more deals [41:37]
  • About BiggerPockets’ On the Market Podcast [45:02]

James Dainard

As a Managing Principal of Heaton Dainard Real Estate, James is responsible for the development and execution of corporate strategies, marketing, and property acquisitions.

James has been actively investing in multifamily and single-family units in the Puget Sound region for over 12 years and has lead his team to over 3,000 transactions. His over a decade of experience investing in multi-family and single-family units in the Puget Sound region has guided Heaton Dainard to more than 131 million in sales volume from 265 transactions in 2021. James has received multiple awards and recognition for his role in growing Heaton Dainard into one of Washington’s Fastest Growing Private Companies for 2013, 2014, 2015, and 2016. Puget Sound Business Journal also recognized James as a 40 under 40 honoree.

Related Links and Resources:

Thank You Rockstars!

It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.

-Aaron Amuchastegui

Source: realestaterockstarsnetwork.com

Apache is functioning normally

Our friends have a profound effect on our personal finance habits. Some friends can lead us to spending and to debt. Others offer insight into the virtues of thrift. For me, my friend Sparky has been the latter. Through his example, I learned that frugality can help me achieve my goals.

“Develop a plan that is so amazing, so glowing, that you are willing to walk blurry-eyed to work every day to make the money necessary to reach the light.” — Sparky’s advice to GRS readers in 2006

After my friend Sparky graduated from college, he drifted. He couldn’t hold a steady job, and he didn’t stay in one place for long. He traveled to Mexico. He moved to New England. He lived in various cities in Oregon and Washington.

“I don’t know how you can do it,” he told me once when he saw our new house. “You have a home and a wife and the same job you had five years ago. I’d hate that.” He lived as a First World nomad.

Choosing Freedom

I visited Sparky once in early 1996. I stayed overnight at his apartment in Eugene while I played in a nearby chess tournament. I was amazed by his Spartan lifestyle. He had no television. He had few books and little furniture. Most of what he owned had been purchased second-hand. His refrigerator was almost completely empty. (In my memory, it contained only two items: a carton of milk and a bottle of ketchup.) Sparky’s only indulgence seemed to be a collection of bootleg U2 CDs.

“How can you live like this?” I asked him. “Where’s all of your Stuff?”

Sparky smiled at me. “I don’t need a lot of Stuff, J.D. The Stuff is not important. To be honest, I don’t know why you have so much Stuff. How do you live like that?”

I didn’t know what he meant at the time. To me, life was all about the Stuff. I had hundreds of CDs and thousands of books. I had a TV, a stereo, a house, and a car. I wanted more. Sparky had none of these, but he had something I did not. Sparky had freedom. His frugal lifestyle allowed him to save and invest. I marveled at how he squirreled away his money. I didn’t understand how he managed it. I made at least twice what he did, but he had money in the bank and I had none. Instead, I had $20,000 in debt and was taking on more every day.

For some reason, I could not see the connection between Sparky’s thrifty lifestyle and his financial success. I could not see the connection between my own profligate ways and my mounting debt. I was blind.

The Razor’s Edge

During the summer of 1997, Sparky and I went for a hike. As we walked, we talked. He told me about his plans and his goals. He was living in a small town in northern Washington, working two full-time jobs, a part-time job, and getting free rent in exchange for housesitting with an elderly homeowner. “I’ve only had five or six days off in the past eight months,” he said.

“That seems crazy,” I said. “Why are you working so hard?”

“I want to travel around the world,” he said. “You know that I don’t have a lot of Stuff. There’s a reason for that. Material possessions tie a person down to one place. I can’t travel if I have a house and a car and all of that other Stuff.”

He told me about the trip he had planned. He had a one-way ticket to Thailand. From there, he hoped to travel to India and then Israel, but he didn’t have any sort of agenda. “I’m just going to go,” he said. “I’m going to travel as long as my money holds out.”

“You sound like Larry Darrell,” I said, referring to The Razor’s Edge, W. Somerset Maugham’s 1944 book about a young American disenchanted with the way of the West. “Larry lives like a pauper, but is able to loaf around Europe and India while searching for enlightenment. It’s a great book. You should read it.”

“Maybe I will,” he said. And then he added, “Do you want to come with me?” Of course I did, but I couldn’t. I was in debt. I had no savings. I couldn’t afford to drop out of Real Life for five months. How would I pay for all of my Stuff?

Sparky went on his trip. He backpacked across the world alone, and he loved it. He sent me postcards from stops along the way: from Thailand and India, from Nepal and Israel and Jordan and Egypt. He was gone for five months. Because he was not burdened by Stuff, he returned to a financial position similar to the one he had left. He didn’t have a mortgage or other debt. His savings and investments were still intact. He had lived for five months without an income, it’s true, but he’d spent exactly what he budgeted, and he’d had the experience of a lifetime.

Quiet Wealth

When Sparky got back, he settled down to a more normal way of life. He got a real job. He even bought a house. Still he continued to pinch his pennies, spending only on the things that really mattered to him. Eventually, I began to see the connection between his lifestyle and his quiet wealth.

When I started Get Rich Slowly, Sparky was enthusiastic. He talked to me about my newfound appreciation for personal finance. He shared his favorite books, his favorite tips, and his favorite mutual funds. A few of our conversations even became fodder for GRS stories:

  • Money blueprints: What our parents taught us about money
  • An entrepreneurial leap of faith
  • A brief conversation about money

Whereas I had once viewed Sparky’s ascetic lifestyle as a little strange, I began to understand it as a means to an end. Perhaps I couldn’t be as frugal as he was, but I could still learn from some of his lessons. We had some great conversations about money and about goals and about the future. I looked forward to learning more from him.

That’s not going to happen.

The Last Lesson

Sparky died unexpectedly last week. We had been close friends for 25 years, and he was an important part of my life. He challenged me. He believed in me more than I believe in myself. I cannot say that Sparky was without fault. Like anyone, he had his quirks. But on the whole, he was a positive influence in my life, and when it came to money, he was a shining example of how to live right. I’ll never have the chance to learn from him again.

Please, my friends, always remember that true wealth has nothing to do with money. True wealth is built from friends and family, from experiences and relationships — it is derived from a life filled with meaning. Without these things, money means nothing. Do me a favor this week, and spend some time with the people you love.

Source: getrichslowly.org

Apache is functioning normally

Newly constructed home sales and loan applications ticked down in June as buyers balked at higher mortgage rates, but activity remained above last year’s, according to the Mortgage Bankers Association.

Loan volume slowed slightly this month, reporting a 5% decrease since May, according to the MBA’s Builder Application Survey. But new home lending is holding strong year-over-year — applications are up 26.1% from last June.

Sales in this segment followed the same pattern: the BAS seasonally adjusted new single-family sales rate was 687,000 units this month, a 9% monthly decrease, but a 10.8% yearly increase. Unadjusted new home sales reached 60,000 in June, compared to 64,000 in May. 

“New home purchase activity continues to be a bright spot, as both new home applications and home sales were up on an annual basis,” Joel Kan, MBA’s vice president and deputy chief economist, said in a press release. “Rising mortgage rates in June likely caused some pullback in purchases over the month.”

The average 30-year fixed mortgage rate hovered around 6.7% throughout June, according to Freddie Mac.

These rates have the biggest impact on the existing home market, where they are likely scaring away would-be sellers from listing, furthering the industry’s housing inventory problem. This June, there were 13.8% fewer homes for sale and 29.1% fewer newly listed homes than last year, according to Redfin data.

But the new home market has been stronger than expected, Doug Duncan, Fannie Mae’s chief economist, noted in his latest economic report.

Builder sentiment, on the other hand, is up this month according to the National Association of Home Builders/Wells Fargo Housing Market Index. It’s at its highest since last July. 

“The lack of resale inventory means prospective home buyers who have not been priced out of the market continue to seek out new construction in greater numbers,” Robert Dietz, the chief economist at NAHB, said in an article about the index. 

At the same time, Dietz says builders are worried about high mortgage rates and supply-side challenges despite recent cost stabilizations. New home construction rates soared in May, then shrunk back slightly in June.

The BAS said June’s average loan size was $400,281, marginally less than May’s average of $403,581. Conventional loans remain the most popular, making up 65.5% of all loans. Federal Housing Administration loans follow at 24.1%. FHA loans made up slightly more of the total loan pool in June, gaining some ground from conventional loans.

Both Department of Veterans Affairs and Department of Agriculture loan proportions remained unchanged, making up 10% and 0.3% respectively.

Source: nationalmortgagenews.com

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Correspondent Programs; STRATMOR and Customer Service; Credit Products and News; Training and Webinars

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Correspondent Programs; STRATMOR and Customer Service; Credit Products and News; Training and Webinars

By:
Rob Chrisman

Thu, Jul 20 2023, 10:16 AM

Ever see the movie “Cocoon”? Is there an X-rated version? Seven of the 10 fastest-growing metro areas over the past year are in Florida. The Census Bureau tells us there was population growth for about two-thirds of U.S. metro areas during this time, but The Villages, Florida, had the greatest percent increase at 7.5 percent. (Yes, as in the “STD Capital of America” Villages!) The metro area of Myrtle Beach-Conway-North Myrtle Beach, South Carolina-North Carolina came in second and saw population climb by 5.0 percent. The metro area of Dallas experienced the largest numerical population increase, seeing its population climb by 170,396 or by 2.2 percent from July 1, 2021, to July 1, 2022. The metro area of Houma, Louisiana, had the greatest percent decline over this time range, and two other metro areas in Louisiana were among the 10 fastest-shrinking metros. (Today’s podcast can be found here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. To experience how Richey May can help you transform your mortgage business, visit richeymay.com. Hear an interview with NAR’s Jessica Lautz on the latest inflation figures and the Fed’s calculus moving forward.)

TPO Channel Products

Now is the time to become an approved Newrez Correspondent partner. A partnership with Newrez Correspondent provides access to an extensive product menu, delegated/non-delegated underwriting, multiple delivery methods, and professional experience needed to ensure success in an ever-changing market. With exciting enhancements such as the recently added Bulk AOT and soon to be released Appraisal Alternatives, there is no better time than now to become a Newrez Partner. Every week new lenders are joining the Newrez family of nearly 1000 approved correspondent clients, and are enjoying the many benefits of partnering with a top Correspondent Investor when efficiency, cost reduction, and profitability are critical. Newrez Correspondent understands the importance of personalized service and strives to exceed our client’s expectations at every turn. Contact us today to schedule a meeting at the Western Secondary Conference August 21st to 23rd for an in-person discussion on how a Newrez Correspondent Partnership can optimize your business.

Planet Home Lending’s Correspondent division is built on an unwavering commitment to Correspondent lending and the belief that strong partnerships are the cornerstone of success. Our continually refined product lineup ensures you have the right products to build volume in any market cycle. Go beyond government and conventional loans and move into profitable niche products, like renovation, manufactured homes, and buydowns. Get in touch with Planet’s SVP Correspondent Sales Jim Loving (414-270-0027) to learn more or click here to download the latest version of our Product Highlights flyer, then put Planet to work for you!

STRATMOR and Customer Service

Lenders have struggled for years trying to build customer-centric cultures. According to data from STRATMOR Group’s MortgageCX program (more than one million borrower surveys and counting), the number one frustration in the pursuit of Customer Experience (CX) excellence is the transition from collecting customer feedback to creating internal behavioral change. In his July Customer Experience Tip, MortgageCX Director Mike Seminari shares four motivational strategies for lenders that can help drive the change needed. For inspiration on motivation, read, “Motivate Your Mortgage Team to CX Excellence.”

Credit Products and News

Attention Mortgage Lenders: Empower Millennial and Gen Z Homebuyers! Download The Ultimate Credit Scoring Playbook, your go-to resource for conquering unique buyer pool challenges with Millennial and Gen Z homebuyers. Gain comprehensive insights, strategies, and expert tips to guide these tech-savvy generations to their dream homes and establish yourself as a trusted advisor by mastering credit score management. Understand market conditions, interest rates, regulations, and preferences that will affect these generations in their homebuying journeys. Shape your success in the mortgage industry and drive unprecedented growth. Don’t miss out on this opportunity to elevate your expertise. Download The Ultimate Credit Scoring Playbook for Millennials and Gen Z eBook for free now! Follow Birchwood Credit Services to gain access to a plethora of industry-related news and informative content that will aid you in closing loans at lightning speed!

Lenders are keenly aware of the 3 Ds of lending: divorce, death, and da money. This is an answer to the 5 Cs of lending, and credit is very important to lenders. Evaluating a borrower’s credit is always important, especially with the ATR (ability to repay) requirements. Anyone who is thinking we’re heading for foreclosures shooting higher had better take a look at the equity that current homeowners have, and the credit quality of the current crop of borrowers.

Huh? Now SoFi will “underwrite” your loan for you?

VantageScore Solutions was launched in 2006 and is owned by America’s three national credit reporting companies (CRCs) – Equifax, Experian, and TransUnion.

Lenders are still talking about Equifax’s shift last year where it eliminated order options in October, resulting in the need for double orders, and then raising prices on Jan 1st for those double orders. So most will say that competition is good, and the Transunion Truework news last month on income and employment verification is being watched to see how it plays out.

I bring all of this up because yesterday Experian® announced consumers can now choose to share information directly from their employers’ payroll service through Experian Verify™ when applying for credit, including mortgages, auto loans and personal loans. “The enhancement introduces Experian’s automated income and employment verification waterfall and helps lenders easily leverage both instant and permissioned technology with consumer consent to verify income and employment for over 85% of the U.S. workforce… A multi-step approach is needed to help reduce dependencies on complex and costly manual verification processes. Lenders who use a multi-step approach can keep consumers engaged while verifying income and employment information faster and more efficiently.”

Training and Events Next Week

Keep a finger on the pulse of borrower demand and incentive with Black Knight’s complimentary Mortgage Monitor webinar, which provides insights into the mortgage market you can’t get anywhere else. Our experts analyze the most current information from Black Knight’s vast mortgage, housing, and property data assets to deliver a clear view of the market. We also include the latest rate lock data, so we’re able to dig deep into origination trends and provide information that can help you market and allocate resources more effectively. Register now.

Do you have questions about CDFIs? Are you wondering how CDFI’s QM exception and FHLB access work? Falcon Capital Advisors is hosting a webinar with its CDFI experts to share an overview of these primarily non-bank entities and how recent changes in CDFI rules could advantage lenders who are seeking to serve minority borrowers, deeper credit FHA borrowers, participate in state HFA programs and lower their own costs of capital for all of those loans. Register for the webinar on 7/27/2023 at 2pm EST using this link. For more information on Falcon’s CDFI advisory services drop an email.

On Thursday, July 27th at 2pm ET Tabrasa’s Bill Bodnar will be hosting a webinar entitled “Reading the Markets – The Back Nine”. With half the year (or round) over, join Bill for a fast-paced presentation on what Mortgage Market Guide is seeing in the back half of 2023 for the economy, Fed, rates, housing and more.

In Hawai’i, join MBAH for an exciting event on July 26th, 8:30 – 10:30am at Dave & Buster’s Honolulu, Pa’ina Hale, 2nd Floor. Bring together the top real estate experts to share best practices for today’s market.

PRMG’s non-QM Investor Solution product which provides an option for Debt Service Coverage Ratio (DSCR) and No Ratio qualifying on investment properties, Wednesday, July 26.

Angel Oak Mortgage Solutions Part 2 of 2, A Non-QM Webinar on Bank Statement Loans, is all about Angel Oak Mortgage Solutions innovative Bank Statement Program aimed specifically for self-employed borrowers. This webinar on Wednesday, July 26th, 1:00 PM EST | 10:00 AM PST, will take a deep dive into program details, highlight how they determine income and discuss how to market to these borrowers.

Addressing Appraisal Bias and Explore potential solutions to mitigate appraisal bias. California MBA’s Mortgage Quality and Compliance Committee new webinar on July 27th at 11 AM PST. Join and discuss appraisal bias and investigate potential solutions to combat it.

There are many unique characteristics and benefits of the reverse mortgage program that are often misunderstood by potential senior prospects. Join Plaza Home Mortgage® for a free webinar, Thursday, July 27 | 11:00 AM PT / 2:00 PM ET, designed to help you “organize” loan benefits, risks, and loan figures in a way that will help borrowers better understand how a reverse mortgage loan works, and what it means for the future equity and ownership of the borrower’s home.

The 2023 CMLA Convention is back in Vail on August 2-4 at The Hythe. Register today and join us for compelling speaker sessions, ample networking opportunities, and the annual golf tournament. Please find this year’s agenda below – it has been reimagined to provide increased value for our attendees and sponsors, as well as a better event flow. Come and celebrate CMLA and the mortgage industry’s resilience.

FAMP! Florida Association of Mortgage Professionals 2023 Annual Convention & Trade show, “A Grand Affair”, is August 2-5, 2023, at Signia by Hilton Orlando Bonnet Creek. For Over 60 years, this is the annual event that attracts Florida’s top mortgage professionals, and this year is no different. Exhibitors from all over the country will be exhibiting current mortgage products and industry tools for all originators. Do not miss this opportunity to network with mortgage brokers and lenders from across Florida and the United States.

MBA Education is bringing the best-in-class training to Seattle, WA., August 8-11. Begin advancing your career by enrolling in the School of Mortgage Banking I: An Introduction to the Real Estate Finance Industry provides a foundation in residential loan production, underwriting, secondary marketing, regulatory compliance, warehousing and servicing.

In Michigan, the MMLA Annual Lending Conference is 8/9-8/11 is in Mt. Pleasant. “Our event brings attendees from all of the state and country to hear our nationally renowned speakers give expert advice on how you can grow your business even in these challenging times!

“What do David Stevens, CMB, Mitch Kider, and Rob Chrisman all have in common? They’ll be at NAMMBA CONNECT 23, September 14 – 16 at the JW Marriott Bonnet Creek in Orlando, FL as the opening session. NAMMBA CONNECT 23 is the largest conference in the mortgage and real estate industry focused on connecting lenders to the multicultural marketplace. This year has been a tough year for our industry. That’s why we are providing 100 complimentary conference registrations in addition to the first night’s room stay for any Sales, Operations, Marketing or HR Executive who would like to attend the conference. This is our way of giving back to the industry. This offer is on a first come, first serve basis. To reserve your space click here. To see the agenda click here.

Capital Markets

Of course, anyone can sue anyone, right? But capital markets folks took note of this article on how Go Mortgage is suing its former capital markets director for corporate sabotage!

But back to rates! With signs that central banks around the globe are making progress in their fight against inflation, global bond yields have fallen as of late, and Treasury yields across the curve rallied once again yesterday on the heels of the UK CPI cooling more than expected. That move was also aided by the release of a below-consensus Housing Starts report for June that fell 8 percent on both a month-over-month and year-over-year basis (actual 1.434 million, expected 1.475 million, prior 1.559 million). Building Permits were not much better (actual 1.440 million, expected 1.472 million, prior 1.496 million). The drop was broad-based, with both single-family and multi-family production pulling back during the month. This month’s numbers showed a striking shift away from multi-family towards single-family.

The lack of housing inventory continues to help the homebuilder community despite higher mortgage rates. Signs continue to point to a clearing of previous backlogs caused by material and labor shortages, and demand remains sufficient given the ongoing lack of existing homes available for sale. Accordingly, builders are cutting back on sales incentives with just 22 percent reporting that they cut pricing in July, down from 25 percent in June and 27 percent in May. The number of multi-family units under construction is at record levels, while single family units under construction are in the middle of its historical range.

Today’s economic calendar is under way with weekly jobless claims (228k, lower than expected; 1.754 million continuing claims) and Philadelphia Fed manufacturing (-13.5, little changed from last month’s -13.7). Later: leading indicators and existing home sales, both for June, and month-end supply consisting of 2-, 5- and 7-year notes and $24 billion 2-year FRNs, a Treasury auction of $17 billion 10-year TIPS, and Freddie Mac’s Primary Mortgage Markets Survey. We begin the day with Agency MBS prices worse .125-.250, the 10-year yielding 3.79 after closing yesterday at 3.74 percent, and the 2-year is 4.84: the 2-10 yield curve inversion is as steep as ever.

Employment and Transitions

“Foundation Mortgage Corporation, a Full-service wholesale Lender based in Miami Beach, FL, is one of the fastest growing NonQM Lenders in the industry. Foundation is currently accepting applications for experienced, NonQM Account Executives to join our team. (AZ, CA, TX, CO, WA, FL). We are also proud to announce the addition of Ann DiCola, Senior Account Executive. Ann is an industry veteran joining Foundation after 12 years with Axos Bank. Reach out to Dean Ayres, Senior Vice President- Sales to learn more about how Foundation Mortgage can help you build your NonQM business.”

Are you interested in changing our industry for the better? Do you have what it takes to join the top-rated client service team in mortgage technology? Apply to become MCT’s Senior Capital Markets Technology Advisor. While many technology providers are cutting staff and reducing service levels, MCT is continuing to invest in making sure clients succeed. Led by Paul Yarbrough since its formation in 2019, MCT’s Client Success Group (CSG) has revolutionized the client experience by providing fast and effective onboarding, intimate support levels, and deep subject-matter expertise. Through a combination of firsthand capital markets experience, active listening to client feedback, and direct engagement in the technology development process, the CSG is finding new efficiencies and improving execution for mortgage lenders. If you have the drive and experience to match this team at the senior level, apply to join MCT in pushing the secondary market forward.

California’s Summit Funding, Inc., a privately held nationwide mortgage banker and servicer, announced it has expanded its East Coast footprint by hiring three divisional leaders based in North Carolina: Deran Pennington, Chris Shelton, and Matt Schoolfield. They bring more than half a century of experience recruiting and building highly successful mortgage sales teams.

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Source: mortgagenewsdaily.com

Apache is functioning normally

In August 2020, Taylor Lopez and her husband Joseph bought their home for $180,000 in the fast-growing city of Anna.

They bought the three-bedroom house built in 1966 with a loan carrying a 3.8% mortgage rate. “From an investment standpoint, it felt like a good choice,” said Lopez, 36, a real estate manager for restaurant chain Wingstop.

Dallas-Fort Worth home sales, prices only take slight hit from higher mortgage rates

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After more than two years in the home, they’ve been thinking about selling. Joseph works in Lewisville and Taylor works in Addison, so they would like to find a place offering a shorter commute.

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But, like many other would-be upsizers in Dallas-Fort Worth, the couple feels locked into their current home.

Although they could get a good return on a sale, they would have to shop in a dramatically more expensive housing market than when they first purchased and sacrifice their current loan for a new one at a much higher rate.

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After a wave of low-rate homebuying and refinancing from 2020 to 2022, more than half of outstanding Texas mortgages have rates of less than 4%, according to Federal Housing Finance Agency data.

Since last fall, the average rate for a 30-year, fixed-rate mortgage has been hovering between 6% and 7%.

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“There are people that want to sell, but that is what is keeping them there at their house,” said Misty Michael, a real estate agent in the Sachse and Plano area.

The Lopez family said any home they would want to buy, in school districts they want to be in and that wouldn’t require a lot of work, would start in the $400,000 range.

“It doesn’t make sense when you weigh out all the pros and cons, so we’re continuing to drive about an hour each way to work,” Lopez said. “We could always purchase a home at a higher interest rate, then refinance it if the interest rates go down, but that’s an if and when situation.

“When you’re playing with that much money, it doesn’t seem like a risk I’m willing to take right now.”

Joseph (left) and Taylor Lopez purchased their home in Anna in 2020 for less than $200,000 with lower mortgage rates and are now waiting out higher rates and prices as they look to sell. (Liesbeth Powers / Special Contributor)

Changing math

Since the start of 2020, the median price of a single-family home in Dallas-Fort Worth has risen more than 50%, according to North Texas Real Estate Information Systems and the Texas Real Estate Research Center at Texas A&M University.

On top of that, the Federal Reserve has aggressively increased its federal funds rate for more than a year, indirectly driving up mortgage rates. Freddie Mac recorded an average 30-year mortgage rate of 6.96% on July 13.

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The result: The monthly principal and interest payment for a median-priced Dallas-Fort Worth home at the average rate with a 20% down payment, before insurance or property taxes, was about $980 in January 2020. In June, it was more than $2,100.

For buyers who purchased a $300,000 home at the record low of 2.65% in January 2021, just buying a house at the same price again at today’s average rate would add almost $900 to their monthly payments before taxes and insurance.

Purchasing a bigger or nicer home would add significantly more to that already-elevated payment, so people with job promotions or babies on the way looking to upgrade to bigger homes may not find a good enough deal to justify it financially.

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“It now is significantly more expensive to make these marginal changes that you might have been planning,” said Texas A&M economist Adam Perdue. He and his wife are expecting a baby soon and have considered getting a bigger home, but they too have a low rate on their home in Brazos County and don’t want to take on higher monthly payments.

While prices are declining slightly year to year, Texas A&M economists don’t expect them to return to where they were at the beginning of 2020. Rates are also expected to decline, but not back down to the record lows. Mortgage Bankers Association forecasts rates in the 5% range by 2024.

Still buying and selling

As mortgage rates rose and sellers held back, new single-family home listings in Dallas-Fort Worth dropped 22% between June 2022 to June 2023, limiting options for people looking to buy.

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Buyers with an immediate need to move are still purchasing homes, and people continue to move to Texas from other parts of the country. Local home sales recorded in June were down only slightly from a year before.

“We have a ton of buyers that are wanting to buy a home,” Michael said, adding that buyers may choose to refinance later. “You have people getting married, having babies, kids going to college.”

More casual buyers without an immediate need to move may no longer be shopping, said Drew Kayes, who heads up homebuying company Opendoor’s operations in Dallas-Fort Worth and Houston.

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“A lot of those folks right now are not in the market because they’re locked into a sub-4% rate, and that’s more of a luxury move than a necessity move,” Kayes said.

An open house sign beckons buyers outside of a home in Plano. (Shafkat Anowar / Staff Photographer)

Jason Dickson, co-owner of North Texas-based Nuwave Lending, said while it may be hard for homeowners to leave their current home, it may be worth it for them to tap into equity they’ve built up during the pandemic to pay off credit card debt or auto loans.

“They’ll gladly sign up for the higher interest rate in the new house if they have the benefit of taking that equity and improving their overall financial position,” he said.

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A silver lining

Nipun Gadhok, development manager for the Nehemiah Company, is looking to move from Fort Worth to buy a home in Mesquite next year.(Liesbeth Powers / Special Contributor)

Nipun Gadhok, 31, doesn’t want to lose his 3% rate but hopes to purchase a new home for him and his girlfriend next year.

Gadhok, a development manager for the Nehemiah Co., a local firm behind residential communities throughout Dallas-Fort Worth, purchased his five-bedroom home in Fort Worth’s Augusta Meadows neighborhood in 2021.

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He’s looking to buy a home along the outskirts of the metro area, potentially in one of his company’s developments on the east end of Mesquite. Knowing he has a rate he may never get again, he’s not planning to sell his Fort Worth house.

He intends to keep it as a rental property and is already renting out rooms to four other tenants. With mortgage rates causing many people to rent, that’s turning out to be a good side hustle.

“People are choosing to rent, they are not as much inclined to buy,” Gadhok said. “The rates really helped me out in the way that I’m not having problems with finding tenants.”

Read more stories about the D-FW housing market
Here’s how much profit Dallas-Fort Worth home sellers are making

Home sellers in North Texas are pocketing some of the highest gains on record, even though profit is down from last summer’s peak.
Apartments set to start construction this fall on Plano’s Haggard farm

Developers of Plano’s legacy Haggard farmland on the Dallas North Tollway are disclosing more details of a $70 million, four-story, 569,000 square-foot apartment project.
Dallas-Fort Worth tops Texas with a quarter of statewide home sales

Dallas-Fort Worth leads Texas in home sales with more than 27,000 properties trading in the second quarter.

Source: dallasnews.com

Apache is functioning normally

USAA Mortgage, technically known as USAA Bank Home Loans, is one of the larger mortgage lenders out there, though not quite in the top 10.

They’re probably best described as a top 25 mortgage lender, but they’ve got a great website (per my opinion) and good customer service, per J.D. Power, so I figured it would be prudent to take a closer look.

For the record, USAA stands for United Services Automobile Association, an outfit based out of San Antonio, Texas.

The company has that name because they started out in the insurance business, helping military members get auto insurance coverage, then gradually began offering more financial services, including auto loans, personal loans, credit cards, and home loans.

They’re basically a full-fledged bank today, but let’s learn more about those mortgage offerings, including USAA’s mortgage rates, shall we.

What USAA Mortgage Offers

  • Mainly conforming loans that meet Fannie/Freddie guidelines
  • Also VA loans for military and their families
  • Don’t offer FHA or USDA loans
  • Must be a USAA member to get a mortgage from them

First off, USAA offer plenty of loan options, including conforming loans that meet the underwriting guidelines of Fannie Mae and Freddie Mac, along with VA loans, which are available for active duty military and veterans and their families.

Additionally, they offer jumbo loans on loan amounts as high as $3 million, which should satisfy most home buyers, and even jumbo VA loans.

Notably absent from their mortgage product lineup are FHA loans and USDA loans, but seeing that USAA is geared toward those who serve, it makes sense.

Speaking of, you need to be a member of USAA in order to get a mortgage from them, which can be obtained if you’re active duty, a veteran, have a spouse that is/was, or a parent that is a USAA member.

Back to those loan programs. In the conforming department, they offer the 97% LTV home loan program that requires just 3% down payment, a home loan offered by both Fannie Mae and Freddie Mac. They actually refer to it as the “30-year first-time homebuyer” loan though it may not actually be limited to just first-timers.

There is an assumption that first-time home buyers can’t come up with large down payments, but this isn’t necessarily true.

It’s also fairly common for these home buyers to put down 20% to avoid mortgage insurance and the higher mortgage rates that come at high LTVs.

While the down payment requirement is low, it is only available on primary residences and the only loan option is the 30-year fixed. Still, that should fit most borrowers’ needs.

If you’re able to put down at least 5%, you can get your hands on a 10-year, 15-year, or even a 20-year fixed mortgage.

If you’re looking for a mortgage with no down payment, USAA also offers VA loans, which don’t require any money down or a minimum credit score. However, USAA seems to require credit scores of 620 or higher to qualify, which is a pretty common threshold.

These are available in a variety of different terms, including 10-, 15-, 20-, and 30-year loan terms. You can also get a 5/1 ARM, which is fixed for the first five years of the loan term before becoming annually adjustable.

The ARM option only appears to be available for VA loans, not on conventional USAA loans.

With regard to their jumbo loans, you can get a 30-year fixed or 15-year fixed if you go the conventional route, with a minimum 20% down payment. This means you also avoid PMI.

If you need a jumbo VA loan, you can go with a 30-year fixed or a 5/1 ARM.

USAA also offers home loans on vacation homes (second homes) and investment properties, which I believe are limited to fixed-rate mortgages only.

USAA Mortgage Rates

  • Their advertised mortgage rates seem to be on par
  • With what you’ll see elsewhere
  • Not noticeably higher or lower than the competition
  • So customer service might be the deciding factor

This always seems to be top of mind, but is a moving target as well because mortgage rates can change daily.

But I can say that USAA’s mortgage rates seem to be pretty competitive and on par with what you’ll see advertised elsewhere.

And a sweet spot might be their 20-year fixed, which at the moment, is priced a half a percentage point below the 30-year fixed.

It also comes with a lender credit, whereas the 30-year fixed requires a fraction of mortgage points to be paid to obtain the advertised rate.

If you can afford it (and want to pay off your mortgage earlier), it could be a good choice. Not all lenders offer the 20-year fixed, so USAA has that going for them too.

USAA Mortgage Refinance Options

  • You can get a rate and term refinance
  • Or a cash out refinance
  • They also offer the VA streamline refinance
  • But it appears you can only choose a fixed-rate mortgage

Aside from home purchase mortgages, USAA also offers refinance loans if you already have a mortgage and happen to be looking for a lower interest rate or cash out.

They offer both rate and term refinances, which are intended to lower rates and/or shorten loan terms, and cash out refinances, which allow borrowers to tap into their available home equity.

If you’re refinancing a VA loan, they offer Interest Rate Reduction Refinancing Loan (IRRRL) streamlined refinances.

All refinance options offered by USAA Mortgage seem to be limited to 30-year and 15-year fixed mortgages only. It doesn’t appear adjustable-rate mortgages are an option here.

Occasionally, USAA has loan specials, such as no origination fee charged on VA loans, which could sway your decision to use them over a competitor.

Why Choose USAA Mortgage?

  • Current members might as well check them out
  • And include them in their home loan search
  • But you should also gather quotes from the competition
  • To ensure you land the lowest rate and closing costs

If you’re already a member of USAA, it’s certainly worth checking out their home loan offerings if you’re in the market to buy a home or refinance your mortgage.

I say that because you should broaden your search in general to see what’s out there, and if it’s with a banking institution you already have a relationship with, the loan process might be a bit smoother.

You may have also established trust, which can be a big plus in terms of putting yourself at ease during what is often a stressful time.

On the other hand, just because you have a checking account or homeowners insurance policy with USAA doesn’t mean you should get your mortgage there too.

There might be a better fit elsewhere based on rate, closing costs, service, or a combination of all those things.

Another plus of going with USAA is that they’re probably well-versed in VA loans, seeing that their members are also members of the military and/or their families.

My assumption is they originate a lot of VA loans for their military family of customers, so if that’s what you’re looking for, it might make for a smoother process compared to a general home loan lender.

Of course, there are lots of other lenders out there that specialize in VA mortgages as well, so they aren’t necessarily the be all, end all for your home purchase or refinance needs.

As always, take the time to shop mortgage rates and look at the interest rate, closing costs, points required, and the track record of the company you ultimately do business with.

While cost is certainly important, a competent lender is a must as well to ensure your home loan actually closes!

(photo: Lars Plougmann)

Source: thetruthaboutmortgage.com

Apache is functioning normally

U.K. Prime Minister Rishi Sunak conceded shortly after the BOE’s rate hike that the government’s mission to halve inflation to 5% by the end of the year had recently become more difficult.

Wpa Pool | Getty Images News | Getty Images

There is intensifying pressure on Britain’s government to do more to help struggling households, with the country’s shadow finance minister warning of a “mortgage catastrophe” as millions are pushed to the brink of insolvency.

The Bank of England last week hiked interest rates by 50 basis points to 5%, a bigger increase than many had expected. The BOE’s 13th consecutive rate rise takes the base rate to the highest level since 2008.

The surprise move — which is designed to lower inflation — will affect millions of homeowners as the interest rates on many mortgages in the U.K. are directly linked to the central bank’s base rate. Renters, too, are likely to see their payments increase as buy-to-let landlords pass on higher mortgage repayments.

Research by the National Institute of Economic and Social Research, a leading independent think tank, estimated that the BOE’s latest interest rate hike would see 1.2 million U.K. households (4% of households nationwide) run out of savings by the end of the year because of higher mortgage repayments.

That would take the proportion of insolvent households to nearly 30% (roughly 7.8 million), the NIESR said last week, with the largest impact set to be incurred in Wales and the northeast of England.

“The rise in interest rates to 5% will push millions of households with mortgages towards the brink of insolvency,” said Max Mosley, an economist at the NIESR. “No lender would expect a household to withstand a shock of this magnitude, so the government shouldn’t either.”

Credit scores and grace periods

U.K. Finance Minister Jeremy Hunt on Friday met with major banks and building societies to discuss the deepening mortgage crisis in the country.

Hunt said Friday that three measures had been agreed with the banks, mortgage lenders and the Financial Conduct Authority, including a temporary change to mortgage terms and a promise that consumers’ credit scores would not be affected by discussions with their lender.

The minister also said that for those at risk of losing their home, lenders agreed to a 12-month grace period before there’s a repossession without consent.

The Resolution Foundation says current market pricing suggests that households remortgaging in 2024 are poised for an annual mortgage bill rise of approximately £3,000 ($3,813) or more on average.

Christopher Furlong | Getty Images News | Getty Images

“These measures should offer comfort to those who are anxious about high interest rates and support for those who do get into difficulty,” Hunt said.

“We won’t flinch in our resolve because we know that getting rid of high inflation from our economy is the only way that we can ultimately relieve pressure on family finances and on businesses,” he added.

Rachel Reeves, shadow finance minister for the opposition Labour Party, criticized what she described as the government’s “chaotic approach” to the mortgage crisis.

“Unlike this government, Labour will not stand by as millions face a mortgage catastrophe made by the Tories in Downing Street,” Reeves said via Twitter on Thursday.

There’s a lot of mortgage pain coming, and much of it will arrive during the run-up to a 2024 election.

Torsten Bell

Chief executive of the Resolution Foundation

U.K. Prime Minister Rishi Sunak conceded shortly after the BOE’s rate hike that the government’s mission to halve inflation to 5% by the end of the year had become more difficult.

“I always said this would be hard — and clearly it’s got harder over the past few months — but it’s important that we do do that,” Sunak said Thursday at The Times CEO Summit.

“The government is going to remain steadfast in its course and stick to its plan,” he added.

‘There’s a lot of mortgage pain coming’

BOE Governor Andrew Bailey said Thursday’s interest rate rise was necessary to continue the fight against stubbornly high inflation.

Official figures published ahead of the BOE’s meeting showed annual inflation rose by 8.7% in May, exceeding expectations. It means consumer prices remain at a level far above the BOE’s 2% target.

“We know this is hard — many people with mortgages or loans will be understandably worried about what this means for them,” Bailey said. “But if we don’t raise rates now, it could be worse later.”

The Resolution Foundation, a think tank focused on issues facing low- and middle-income households, has since warned that even with the latest rate rise, the problems for borrowers are far from over.

It says current market pricing suggests that households remortgaging in 2024 are poised for an annual mortgage bill rise of approximately £3,000 ($3,813) or more on average.

“There’s a lot of mortgage pain coming, and much of it will arrive during the run-up to a 2024 election,” said Torsten Bell, chief executive of the Resolution Foundation.

Source: cnbc.com

Apache is functioning normally

With elevated mortgage rates sidelining both home buyers and sellers, existing home sales fell in June, according to the latest report from the National Association of Realtors (NAR). Sales were also down significantly from a year prior.

Total existing home sales slipped 3.3% in June from the prior month to a seasonally adjusted annual rate of 4.16 million. Year-over-year, sales dropped 18.9% from 5.13 million in June 2022.

“The first half of the year was a downer for sure with sales lower by 23%,” said Lawrence Yun, NAR’s chief economist. “Fewer Americans were on the move despite the usual life-changing circumstances. The pent-up demand will surely be realized soon, especially if mortgage rates and inventory move favorably.”

The median existing-home price in June for all housing types – which includes single-family homes, condos and townhouses – was $410,200, the second-highest price of all time and down 0.9% from the record-high of $413,800 in June 2022. The monthly median price surpassed $400,000 for the third time, joining June 2022 and May 2022 ($408,600). Also noteworthy, prices rose in the Northeast and Midwest but waned in the South and West.

We’ve seen home sales drop on an annual basis since the Federal Reserve began hiking the benchmark rate in spring of 2022. Mortgage rates have settled into the 6% to 7% range over the last three months, depressing existing home sales.

Total housing inventory recorded at the end of June was 1.08 million units, unchanged from May, but down 13.6% from June 2022 (1.25 million). Meanwhile, unsold inventory sits at a 3.1-month supply at the current sales pace, up slightly from 3.0 months in May and 2.9 months in June 2022, NAR said.

“Home sales fell but home prices have held firm in most parts of the country,” NAR’s Yun added. “The national median home price in June was slightly less than the record high of nearly $414,000 in June of last year. Limited supply is still leading to multiple-offer situations, with one-third of homes getting sold above the list price in the latest month.”

Although all four regions experienced year-over-year sales declines, the Northeast fared better while the Midwest held steady, and the South and West posted decreases.

Zooming in on the Northeast, existing-home sales there grew 2.0% from May to an annual rate of 510,000 in June, down 21.5% from June 2022. The median price was $475,300, up 4.9% from the prior year. In the Midwest, existing-home sales remained unchanged from one month ago at an annual rate of 990,000 in June, decreasing 19.5% from one year ago. The median price there was $311,800, up 2.1% from June 2022. In the South, existing home sales disappointed as they faded 5.4% from May to an annual rate of 1.91 million in June, a decrease of 16.2% from the previous year. The median price was $366,600, down 1.2% from June 2022. Lastly, in the West, existing-home sales declined 5.1% from the previous month to an annual rate of 750,000 in June, down 22.7% from one year ago. The median price was $606,500, down 3.4% from the same period last year.

The good news is that the housing recession that was predicted by some economists has not materialized, noted Lisa Sturtevant, chief economist for Bright MLS. 

”With positive inflation news and a strong labor market, the possibility that the Fed will be able to bring the economy in for a “soft landing” is improving. As the economy normalizes, however, we are still in the midst of a very unusual housing market, with so much inventory locked down as a result of the low pandemic mortgage rates,” said Bright MLS’s Sturtevant.

Properties in June on average remained on the market for 18 days, identical to May but up from 14 days in June 2022. Conversely, 76% of homes sold in June were on the market for less than a month. First-time buyers were responsible for just 27% of sales in June, down from 28% in May and 30% in June 2022, illustrating the affordability crisis at play.

For transaction types, all-cash sales accounted for 26% of purchases in June, up from 25% in both May 2023 and June 2022. Meanwhile, individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in June, up from 15% in May and 16% the previous year.

Distressed sales, which include foreclosures and short sales, represented only 2% of sales in June, virtually unchanged from last month and the prior year.

In this market, the lack supply remains the main constraint but new housing construction should help alleviate some of the supply pressures, according to Sturtevant. As a result, homebuilders kept capitalizing on a lack of competition and injected supply into the marketplace. However, inventory will still be sparse and prices “will have nowhere to go but up in the second half of 2023.”

“Existing home sales will continue to remain suppressed while both sides of this market are feeling the heat of affordability constraints, and we will likely continue to see buyers turning their eyes towards the new construction market – which can offer incentives to tip the scales in favor of buyers’ budgets as well as offer more available inventory,” added Nicole Bachaud, a senior economist at Zillow.

Source: housingwire.com