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Well, so much for mortgage rates falling just in time for the spring home buying season.
While many expected interest rates to be lower by now, they’ve proven to be pretty sticky at current levels.
At last glance, the 30-year fixed is still hovering close to 7%, albeit better than October 2023 when it was around 8%.
But there was hope we’d see rates in the 6% range by now and maybe even lower if the Fed had cut rates earlier.
Interestingly, rates are actually pretty well aligned with the 2024 mortgage rate predictions made at the end of last year.
The likes of Fannie Mae and the Mortgage Bankers Association pegged the popular loan program at 7% for the first quarter of 2024. And that’s pretty much where we stand today.
The bad news is they’ve now indicated that it could take longer for rates to fall to more agreeable levels.
In Fannie Mae’s March forecast, they noted that their “interest rate forecast has been upgraded.”
And not upgraded in a good way. Upgraded as in expect higher mortgage rates for the foreseeable future.
Just how bad is it? Well, after making adjustments a month earlier, they’ve since made upgrades of four-tenths and five-tenths, for the years 2024 and 2025, respectively.
This puts the 30-year fixed at an average of 6.6% in 2024 and 6.2% in 2025. In other words, no sub-6% mortgage rate for the next two years! Ouch!
In January, their forecast called for a 5.8% 30-year fixed in the fourth quarter of 2024, and a relatively low 5.5% by the end of 2025.
Meanwhile, Freddie Mac released a new outlook that calls for mortgage rates to remain high through at least the first half of 2024.
They noted that 30-year mortgage rates will stay above 6.5% through the second quarter of 2024.
It’s unclear what happens after that, but there’s not a lot of optimism at the moment.
This should translate to lower mortgage volume, with rate and term refinance activity hard to come by.
And purchase activity also constrained by things like a continued lack of for-sale supply and mortgage rate lock-in.
However, they do expect home prices to increase by about 2.5% in 2024 and another 2.1% 2025.
Whether this keeps up with inflation is another story…
Simply put, the economy continues to run too hot. As a rule of thumb, good economic news leads to higher interest rates. And vice versa.
The reason is a strong economy typically results to inflation, which is bad for bond prices and mortgage-backed securities.
That price pressure requires higher yields, which translates to higher mortgage rates. So if you want lower rates, you kind of need to root for economic strife.
Due to this robust economy, the Federal Reserve has maintained its restrictive monetary policy.
While there were expectations of a series of rate cuts in 2024, including one as early as this March, the Fed balked today.
And there’s a chance rate cuts will remain elusive for the time being.
Ultimately, inflation continues to run high and unemployment remains low. Until that changes, the Fed won’t “pivot” and cut rates. They’ll simply stay the course.
While the Fed doesn’t directly control mortgage rates, their long-term policy decisions can dictate the direction of 10-year treasury yields and also 30-year mortgage rates.
Until economic conditions worsen, don’t expect the Fed to pivot and begin cutting its own federal funds rate.
There’s a popular phrase “higher for longer,” in reference to the Fed’s monetary policy needing to remain restrictive for a longer period of time to reach its goals.
When it comes to mortgage rates, perhaps it’s more accurate to say “elevated for longer.” That is to say they won’t necessarily go higher from their current levels.
But they may remain at these higher levels for longer than originally anticipated. So it’s not like we’ll necessarily see mortgage rates move up from here.
Or that they’ll go back to those scary 8% rates seen in October 2023. But they could linger in this unpleasant range throughout 2024. And maybe even into 2025.
This may make that date the rate, marry the house thing hard to achieve
If you recall when mortgage rates were super low, many forecasts called for higher rates year in and year out.
Yet each year, the forecasts proved to be incorrect as rates reached new all-time lows and stayed at/near those levels for much longer than expected.
Sadly, the same thing is possible now, just the other way around. So instead of rates doing what the forecasters expect, they’ll continue to remain sticky high.
The funny part is the economists will be wrong in both instances. Wrong about them rising for many years. And possibly wrong again about them falling back down to earth.
Go figure.
Source: thetruthaboutmortgage.com
As we started 2024, the signals in the U.S. real estate market were for inventory growth, sales growth and home-price growth across the U.S. At the time, I observed that even if mortgage rates stayed flat, the momentum seemed to be in the cards for broad, slow growth in the market.
However, mortgage rates didn’t stay flat. They climbed starting Jan. 1 and as of today, March 18, mortgage rates are 30-40 basis points higher than Jan. 1. Rates are off their recent peak of a couple weeks ago, but the latest economic news is still very strong, and the markets are growing less sanguine about interest rates easing significantly soon. Last year, the most common view was that mortgage rates would fall in 2024. That hasn’t materialized yet and many people are less optimistic that it will.
We’ll learn more about the future of interest rates at the Federal Reserve meeting this week. Although I don’t have any capacity to predict interest rates, I do know what happens to the housing market if rates rise or fall from here.
Of my initial expectations this year — rising inventory, rising sales rates, rising prices — only rising inventory remains clear at this moment as we finish Q1 with rising interest rates. I talk frequently about how rising rates creates rising inventory. That’s true again this week in the data. My other two expectations, slowly rising sales volume, and slowly rising prices, are less compelling. Let’s look at the data.
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Looking at last week’s numbers:
At this moment in 2022, interest rates and inventory had started rising quickly together as the pandemic boom ended. Mortgage rates were still in the 3s in early March 2022. By April they were in the 4s and by May they were in the 5s.
As mortgage rates rise, so do the number of unsold homes: Demand slows, inventory grows. As the economy remains surprisingly strong, mortgage rates are staying higher for longer than people predicted and as long as rates stay high, inventory will keep growing.
While inventory is growing across the country, some markets are way more impacted and already have more homes on the market than in 2019 or 2020 just before the pandemic. Nearly all markets are showing inventory growth over last year now and this is expanding every week.
The takeaway? If mortgage rates continue to rise to 7.5% or all the way to 8% again, we will see a pretty dramatic increase in unsold inventory. But if rates finally fall, let’s say to 6.5% or lower, we’ll see consumers act very quickly and this inventory growth will reverse. Lower rates mean more buyer competition and less unsold inventory.
Last week, 59,000 new single-family listings came to market. New listings volume continues to run ahead of last year and we see more sellers than last year. In fact, last week, after including the 16,000 immediate sales, there were 24% more new listings than the same week a year ago.
Last year was probably a record low for mid-March as we had very few sellers. For the rest of 2024 we should expect to have more sellers than a year ago, which is a very good thing. It was not that long ago that we had 70,000 or 80,000 new listings each week in March. We’re at 59,000 right now so the seller volume is climbing, but it’s still a third fewer than in recent years. So nationally there isn’t any sign of supply and demand getting out of balance.
Demand is slow as mortgage rates continue to stay in the 7s. Supply is gradually increasing and demand is generally soft. As a result, some of the leading indicators for future home sales prices are starting to weaken.
One obvious place to watch this pricing transition is in the percent of homes on the market with price reductions. This week, 30.9% of the homes on the market have taken a price cut. That’s up half a percent this week and is now more than a year ago.
It’s totally normal to have around a third of homes on the market take a price reduction from the original list price before they sell. I’m going to watch the slope of this curve as this chart will show exactly how quickly the market reacts to higher mortgage rates. This is a pivotal time for measuring buyer demand.
A longer-term signal is the asking prices of all the homes on the market. The median price of single-family homes in the U.S. right now is $435,000. That’s up a notch from a week earlier and just 1.2% higher than a year ago.
Again, in January I expected this price data to be accelerating a little more quickly than it has. Home prices peak each year in June before receding a bit in the second half of the year. The question now is: will we surpass that all-time high this year or will it get delayed until 2025?
The median price of the new listings inched down to $419,900 last week and the new listings cohort is priced 5% higher than a year ago. The new listings are an excellent leading indicator for future home sales prices. The sellers and listing agents use all their collective wisdom and in aggregate they know exactly where to price the new listing. What this data tells us right now is that across the U.S. we have just narrowly increasing home prices this year so far. The signals are slightly weaker now than the data at the start of the year led me to expect.
This week saw 66,000 new contracts for single-family homes started. That’s 15% more than the same week a year ago. Since mortgage rates have been on the rise this year, the sales have been just barely above last year, so this week was probably a bit of an anomaly, but it is welcome nonetheless.
When we look at the price of the homes in contract but not yet sold — these are the pendings — we see that home sales prices are coming in about 4% higher than a year ago. The median price of all the homes in contract right now is $389,000. Home prices ended 2023 at 5-6% gains over the previous year, so home-price appreciation is compressing as mortgage rates have risen.
If rates stay steady around 7%, I don’t expect much price correction lower. If mortgage rates jump from here, I expect that we’ll see a step down in home prices like we saw in October of 2022.
Source: housingwire.com
Fannie Mae publishes quarterly forecasts for the economy at large and housing specifically each month. Its outlook for 2024 got more conservative in February, with the anticipation of faster gross domestic product (GDP) growth, stickier core inflation, stronger employment retention and further delays in cuts to the federal funds rate than it forecast in prior months.
Persistent inflation in February worsens the outlook for imminent rate cuts, as does continued job growth. We’ll have to see if this makes Fannie Mae more conservative in its March estimates.
GDP growth, core inflation and unemployment were stumbling blocks for Fannie Mae in 2023 as forecasters and economists alike wrestled with the likelihood of a recession and various hypothetical timelines for getting inflation under control.
Ultimately, in its outlooks last year, Fannie Mae underestimated the economy’s ability to keep growing and keep people employed.
The economy’s strength was overshadowed in fourth-quarter 2023 by the fact that core inflation’s year-over-year growth came in lower than expected, putting inflation within reach of the Fed’s target of 2% annual growth. This pleasant surprise sparked enthusiasm that rate cuts could be imminent, but that enthusiasm has mellowed, and most experts do not expect rate cuts from this month’s meeting of the FOMC.
Thus far in 2024, economic strength and persistent inflation seem to be surprising experts again.
Despite the economic headwinds that Fannie Mae now foresees through 2024, its outlook for the housing market remains rosier than its late 2023 forecasts.
February’s outlook is slightly worse than January’s across most indicators, but forecasts released in the opening months of this year were more optimistic than those in the final three months of 2023.
Because Fannie Mae’s assumptions last year were based on a slowing economy and moderating rates, its housing outlook for most indicators was too optimistic for the majority of 2023.
Most of Fannie Mae’s housing projections are based largely on the movements of mortgage rates, which have an outsized impact on everything else in the housing market. In its February forecast, the government-sponsored enterprise still foresees mortgage rates falling below 6% — an important milestone for many housing experts — by the fourth quarter of this year.
Rates, however, are still hovering above 7% at the moment, according to HousingWire’s Mortgage Rates Center.
When the FOMC meets March 19-20, its members will again be asked to make their own forecasts of the best policy path for rates to follow. It will give us a dot plot, like the one below from December’s FOMC meeting, that summarizes each member’s thoughts on the federal funds rate.
Few expect any rate cuts to result from this meeting, but it will give housing and mortgage professionals a fresh indication of how imminent or delayed the eagerly awaited rate cuts may be.
Source: housingwire.com
Mortgage rates continued their upward trend this week, nearing 7% and piling on the unaffordability crisis that threatens to dampen the typical spring buying frenzy.
Freddie Mac’s latest Primary Mortgage Market Survey released Thursday showed that the average rate on the benchmark 30-year fixed mortgage climbed to 6.9% this week, up from 6.77% last week. The average rate on a 30-year loan was 6.50% a year ago.
The rate on the 15-year fixed mortgage also increased, averaging 6.29% after coming in last week at 6.12%. One year ago, the rate on the 15-year fixed note averaged 5.76%.
REAL ESTATE EXPERT’S ADVICE TO HOMEBUYERS: ‘DON’T BUY’ YOUR AMERICAN DREAM HOME NOW
“Historically, the combination of a vibrant economy and modestly higher rates did not meaningfully impact the housing market,” Freddie Mac chief economist Sam Khater said in a statement. “The current cycle is different than historical norms, as housing affordability is so low that good economic news equates to bad news for homebuyers, who are sensitive to even minor shifts in affordability.”
Buying activity tends to pick up in the spring following slower winter months, but elevated rates and sky-high home prices have stalled the housing market as more would-be buyers and sellers are priced out or opting not to move.
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“Recent surges in new listing activities suggested that we might have a busy spring ahead,” said Realtor.com economist Jaiyi Xu. “However, the recent increase in mortgage rates has the potential to slow the market by disrupting the plans of many buyers, especially in a market where a significant number of consumers are anticipating lower mortgage rates, not higher.”
Robert Frick, a corporate economist at Navy Federal Credit Union, says rates are climbing because the futures markets have temporarily lost faith in the Federal Reserve cutting the federal funds rate soon, and in a “higher for longer” scenario that means higher mortgage rates, too.
“But market expectations can turn on a dime, and are always just one Fed meeting or data drop away from shifting,” Frick told FOX Business. “We saw that mortgage rates around 7% in January actually boosted existing home sales, and if rates fall below 6% this year, as many forecast, home sales volume should accelerate.”
Original article source: Mortgage rates rise again, threatening to slow spring housing market
Source: aol.com
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The economy has been doing surprisingly well so far this year, and it’s pushing mortgage rates back up.
Average 30-year mortgage rates rose 13 basis points to 6.90% this week, according to Freddie Mac. This is the closest this rate has been to 7% since mid-December.
Average 15-year mortgage rates also increased to 6.29% this week, a 17-point jump.
“Strong incoming economic and inflation data has caused the market to re-evaluate the path of monetary policy, leading to higher mortgage rates,” Sam Khater, Freddie Mac’s chief economist, said in a press release. “Historically, the combination of a vibrant economy and modestly higher rates did not meaningfully impact the housing market. The current cycle is different than historical norms, as housing affordability is so low that good economic news equates to bad news for homebuyers, who are sensitive to even minor shifts in affordability.”
Once the Federal Reserve starts lowering the federal funds rate, mortgage rates are expected to go down as well. But the Fed is waiting for more data showing that inflation is coming down sustainably. Based on the data we’ve seen so far, we might not get a Fed cut until later this year.
Currently, investors believe that we won’t see the Fed cut rates until June at the earliest, according to the CME FedWatch Tool. And depending on how inflation continues to trend, we may need to wait even longer.
This means we may be in for a much more subdued homebuying season than what was initially expected. If you’re committed to buying a home this year even if rates remain high, you may benefit from less competition on the market.
But if you’re waiting for rates to drop before you buy, it may be wise to use this time to pad your down payment savings, so when the time comes to jump into the market, you’re able to make strong, competitive offers.
Mortgage type | Average rate today |
Mortgage type | Average rate today |
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Mortgage rates started ticking up from historic lows in the second half of 2021 and increased dramatically in 2022 and throughout most of 2023.
Many forecasts expect rates to fall this year now that inflation has been coming down. In the last 12 months, the Consumer Price Index rose by 3.1%, a significant slowdown compared when it peaked at 9.1% in 2022. But we’ll likely need to see more slowing before rates can drop substantially.
For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.
Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.
We aren’t likely to see home prices drop this year. In fact, they’ll probably rise.
Fannie Mae researchers expect prices to increase 3.20% in 2024 and 0.30% in 2025, while the Mortgage Bankers Association expects a 4.10% increase in 2024 and a 3.30% increase in 2024.
Sky high mortgage rates have pushed many hopeful buyers out of the market, slowing homebuying demand and putting downward pressure on home prices. But rates have since eased, removing some of that pressure. The current supply of homes is also historically low, which will likely push prices up.
House prices usually drop during a recession, but not always. When it does happen, it’s generally because fewer people can afford to purchase homes, and the low demand forces sellers to lower their prices.
A mortgage calculator can help you determine how much house you can afford. Play around with different home prices and down payment amounts to see how much your monthly payment could be, and think about how that fits in with your overall budget.
Typically, experts recommend spending no more than 28% of your gross monthly income on housing expenses. This means your entire monthly mortgage payment, including taxes and insurance, shouldn’t exceed 28% of your pre-tax monthly income.
The lower your rate, the more you’ll be able to borrow, so shop around and get preapproved with multiple mortgage lenders to see who can offer you the best rate. But remember not to borrow more than what your budget can comfortably handle.
Source: businessinsider.com
Mortgage rates continued their ascension toward 7% this week, raising doubts about the approaching spring homebuying season.
The 30-year fixed-rate mortgage averaged 6.90% as of Feb. 22, an increase from last week’s figure of 6.77%, according to Freddie Mac’s Primary Mortgage Market Survey released on Thursday.
Meanwhile, the 15-year fixed rate averaged 6.29% this week, up from 6.12% during the prior week. And HousingWire’s Mortgage Rates Center showed that Polly’s average 30-year fixed rate for conventional loans was 7.19% on Thursday, up from 7.09% at the same time last week.
“Strong incoming economic and inflation data has caused the market to re-evaluate the path of monetary policy, leading to higher mortgage rates,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
“Historically, the combination of a vibrant economy and modestly higher rates did not meaningfully impact the housing market. The current cycle is different than historical norms, as housing affordability is so low that good economic news equates to bad news for homebuyers, who are sensitive to even minor shifts in affordability.”
Even though the Federal Reserve’s Federal Open Market Committee (FOMC) expressed cautious optimism at its meeting in January, policymakers are in no rush to apply rate cuts in 2024. In the FOMC minutes released on Wednesday, members of the committee indicated that no cuts should be expected until the rate-setting body held “greater confidence” that inflation was receding.
Recent surges in new listings bode well for a strong homebuying season this spring. But rising mortgage rates could disrupt the plans of many rate-sensitive buyers, especially in a market where consumers were anticipating lower mortgage rates, according to Realtor.com economist Jiayi Xu.
“Consequently, it is crucial for homebuyers to safeguard their budget against rate fluctuations by utilizing a mortgage calculator to comprehend the impact of mortgage rate changes on their payments and purchasing plans,” Xu said in a statement.
Source: housingwire.com
Mortgage rate declines from their two-decade peak in October are allowing buyers to buy homes worth tens of thousands of dollars more than they did a few months ago, according to real-estate platform Redfin.
Prospective buyers able to afford $3,000 monthly payments are well-suited to acquire a home priced at $453,000 at a 6.7 percent home loan cost compared to $416,000 when rates hovered near 8 percent. That means buyers are potentially able to add $40,000 to the cost of the home they can buy, Redfin pointed out.
Mortgage rates soared to around 8 percent on the back of the Federal Reserve’s hiking of rates beginning in March 2022 to the current range of 5.25 to 5.5 percent to battle inflation that had at one point skyrocketed to a 40-year high. Recent economic news suggests that inflation has slowed and the market now expects the Fed to begin cutting rates sometime this year.
This shift has contributed to a fall in rates over the last few to under 7 percent sparking activity in the housing market. As of January 25, the 30-year fixed-rate mortgage stood at 6.69 percent, according to Freddie Mac.
The drop in rates has also given buyers the potential to save hundreds of dollars in monthly mortgage payments. A typical home selling at $363,000 at a 6.7 percent mortgage will mean an estimated monthly outlay of $2,545. The same home would have cost an owner more than $2,700 in monthly payments when rates had jumped to nearly 8 percent in November, according to Redfin.
The market is starting to shift as a result of these potential savings with buyers coming out of the sidelines and looking to buy.
“Late last year, many listings sat on the market as buyers sat on the sidelines, hoping for rates to drop,” Shoshana Godwin, a Redfin Premier agent in Seattle, said in a statement. “Now, buyers are snapping up homes because even though rates haven’t plummeted, people are realizing that the longer they wait to buy a home, the more competition they’re likely to face.”
Redfin analysts are forecasting mortgage rates to decline over the months ahead with some level of fluctuations over the year.
Freddie Mac chief economist Sam Khater suggested last week that should mortgage rates continue to trend downwards, spring could be a busy season for the housing market.
“Potential homebuyers with affordability concerns have jumped off the fence back into the market. Despite persistent inventory challenges, we anticipate a busier spring homebuying season than 2023, with home prices continuing to increase at a steady pace,” Khater said in a statement.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Source: newsweek.com
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Attention in the hallways in the early going at the IMB Conference in New Orleans is varied. LinkedIn traffic seems to have picked up for IMB companies like Draper and Kramer and Atlantic Bay, but that is hardly a scientific measure of companies being bought, buying, or exiting the business. (As always, direct questions to company representatives.) Credit costs and trigger leads are a big item; this Wednesday’s L1 Mortgage Matters session at 2PM ET features John Fleming, of John Fleming Law and the Texas MBA, discussing issues including a fine update on the trigger lead situation. Being pragmatic about handling branches that are losing money, even if the crew there has been with you for years and years, is a hot topic among owners. The last 18 months has not been the time to waffle or ignore information. Today’s podcast can be found here and this week’s is brought to you LoanCare. LoanCare has successfully navigated clients and homeowners through market change for 40 years. The mortgage subservicer is known for delivering superior customer experience through personalization and convenience via its portfolio management tool, LoanCare Analytics™, supporting MSR investors with a focus on customer engagement, liquidity, and credit risk.
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Jonathan Spinetto COO & Co-founder at Nyfty Door, grew business from 0 loan originations two years ago when he signed with TRUV, and is projected to hit 3,000 loans a month in 2024. NYFTY door sees conversion rates over 60% with Truv and is saving 60-80% over competitors. Contact TRUV today for your income, employment, insurance, and asset verifications.
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Get ready to rev your engines and network like a champion at the 3rd annual Supercar Experience, brought to you by Lender Toolkit, Reggora, Lenders One, and LodeStar! Mark your calendars for March 18th, before the kickoff of EXP24 in Vegas. We’ll take over Speed Vegas Exotics Racing, where you can unleash your inner speed demon behind the wheel of a dream supercar and connect with industry decision makers in a high-octane setting. Build valuable partnerships and expand your circle with leading mortgage minds at this one-of-a-kind event. Gain exclusive insights from and ask your questions of industry expert Rob Chrisman in a live Chrisman Commentary podcast. Plus, shake hands with Talladega Nights’ icon, Ricky Bobby himself! Experience more than just supercar thrills with an exclusive reception, delicious catering, and racetrack excitement. Don’t miss out on this unforgettable opportunity to elevate your brand, fuel your EXP24 prep, and network like a boss. Secure your spot now. Shake and bake!
One of the more annoying jobs of a loan officer is putting together closing cost summaries every time a borrower looks at a new house. What if they could fire them off from their phone (accurately) without having to go into the LOS each time? All your pre-approved buyers, on your phone, integrated with the LOS. Turn your loan officers into super-awesome fireball-throwing loan officers with QuickQual by LenderLogix.
Introducing The 2024 Lender Playbook: 4 Tips to Drive Profitability in a Recovering Market. How will the coming election, housing inventory, and Fed action impact the mortgage market (and your lending success) this year? There’s a lot going on in 2024, and market recovery won’t be straightforward. The good news? You can still build a strong, forward-thinking plan for resilience and profitability. Tenured industry experts from Maxwell’s senior team helped create this guide to teach you how to reduce costs, win borrower business, and capture intermittent loan volume as it reemerges in the market. To get a leg up on the competition and build agility into your business, click here to download The 2024 Lender Playbook: 4 Tips to Drive Profitability in a Recovering Market.
Join FirstClose, Curinos and Fifth Third Bank on Thursday, February 15 for a deep dive into today’s home equity market. Take a look behind the scenes at the products and processes that fuel home equity lending, new financing options that are creating opportunities for both depository and non-bank participants and, most importantly, learn how to capitalize on this market. This one-hour online event is a must attend for anyone currently in the home equity space or thinking of entering. Register today.
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Webinars, Events, and Training to Wrap up January
The upcoming webinar, “California Lien Law Overview for Construction Lenders” will be hosted by Land Gorilla on Wednesday, January 24 at 10AM PT/1PM ET. In continuation of the informative construction lien law webinars covering Florida and Texas, this webinar promises more great insights and understanding into California’s specific statutory requirements. Discover faster and more cost-effective alternatives to a foundation survey. Gain insights into California’s Prompt Payment Act. Learn the significance of the Notice of Completion in California and its critical timeline that can minimize a lender’s exposure during the final disbursement. You won’t want to miss these key insights to help you effectively manage construction loans. Register now to secure your spot. All registrants will receive the webinar recording.
A good place for longer term conference planning is to start is here, and click on “events” for conferences in the future. Of course this week we have the MBA’s IMB Conference in New Orleans.
What’s ahead for commercial real estate (CRE) markets in 2024? Join SitusAMC’s inaugural “ValTrends First Look” webinar on January 23, at 2pm ET, hosted by Senior Director of SitusAMC Insights Peter Muoio, PhD and Vice President of SitusAMC Insights Jennifer Rasmussen, PhD. Instead of looking back at the previous quarter, the new ValTrends webinar will leverage recent survey data of leading institutional and regional CRE executives to give you a forward-looking snapshot of the quarter ahead.
National MI: Highlights from the Profile of Home Buyers and Sellers with Rebecca Lorenz – January 23rd at 2PM ET. Build a Prospecting Follow-Up Strategy with Kendra Lee – January 25th at 1PM ET.
Sign up for a complimentary webinar hosted by ICE to hear about AI and the future of home valuations. A panel of industry experts will discuss the ways AI-powered tools eliminate valuation bias. They’ll also cover how AI accelerates the valuation process, and ways you can look out for fraud when using AI in home appraisals. The webinar, Artificial Intelligence and the Future of Home Valuations, will be held on Tuesday, Jan. 23 from 2 -3 p.m. Don’t miss out on key insights: register here.
Join BankingBridge, Wednesday, January 24th, 2PM ET/11AM PT, for an insightful webinar delving into the opportunities Zillow offers to enhance lead generation and conversion for mortgage lenders. This comprehensive session is designed to guide you through the various advertising avenues available on Zillow, including the strategic use of the Zillow Mortgage Rate Table, and the nuances of both long-form and short-form leads.
Wednesday the 24th, looking for more in-depth commentary on weekly mortgage news? Register here for “Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2PM EST/11AM PT is a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Listen to a unique mix of age perspective, expertise, and charisma to the screen, ensuring that the information is not only educational but also entertaining. Hear from This week is fabled Austin-based attorney John Fleming discussing trigger leads and the NAR verdict.
“Mastering the Art of Mortgage Broker Engagement” is on January 24th at 10AM PST to learn best practices and strategies that wholesale lenders are using to thrive in the TPO market. This webinar will show you proven tactics and technology tools that are helping wholesale lenders create efficient sales processes that are both scalable and effective. Click here to register.
Join Real Estate Consulting (RCLCO) for this Month’s Webinar: New Year, New Trends – Compensation & Talent Management, Thursday, January 25th, 9:15AM PT / 12:15PM ET. Speakers include Ellen Klasson, Managing Director; Eric Willett, Managing Director; Adam Ostler, Principal, and Moderator Joshua A. Boren, Managing Director, Strategic Initiatives (Moderator).
Friday, January 26th, is this week’s episode of The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT, 3PM ET, in “The Rundown”.
The California Association of Mortgage Professionals (CAMP) is presenting the 2024 Economic Forecast with Dr. Michael Frantanoni and Rob Chrisman on Tuesday, January 30th
1PM PT. “Unlock the Future: 2024 Economic Forecast Revealed! Dive into a World of Opportunities and Growth. Discover Key Insights, Trends, and Strategies for Success in the Upcoming Economic Landscape.”
“Lending operations leaders who care about increasing revenue and decreasing costs, join your tribe in this live event. On January 30th at 1pm CT is an electric panelist lineup made up of Industry leaders that are going to ‘spill the beans’ on ten strategies they are focused on to increase sales and reduce costs with minimal investment in 2024. Join Kevin Peraino, Chief Lending Officer at PRMG, Delfino Aguilar, Chief Production Officer – TPO, Kind Lending, David Lykken, Founder & Chief Transformation Officer at Transformational Mortgage Solutions, LLC (TMS), and Richard Grieser, VP of Marketing at TRUV.
Now available on the Federal Housing Administration’s (FHA) Single Family Housing Events and Training web page under Single Family Housing Self-Paced, Pre-Recorded Training
The first self-paced training module, the Single-Family Housing Policy Handbook (Handbook 4000.1) is an evergreen presentation that walks new and/or existing stakeholders needing a refresher through Handbook 4000.1’s structure and style. It is designed to help viewers understand its benefits, where to access it online, how to read Mortgagee Letters (ML) in context, and how to locate content updates.
The second self-paced training module, the Home Equity Conversion Mortgages (HECM) Origination and Servicing Overview, focuses solely on the newest and final Handbook 4000.1 section that was released on October 31, 2023, and announced in a press release and FHA INFO 2023-84. It begins with a review of the new HECM section’s style and structure, consistent with the rest of Handbook 4000.1 for HECM originators, servicers, and other interested parties. Additionally, it provides viewers with an overview of some of the more recent HECM policy updates that have been incorporated into this new Handbook section, making it easier for HECM originators and servicers to locate the information needed to do with business with FHA in one place.
Capital Markets
Another week, another round of good U.S. economic news. Last week’s Michigan sentiment for January crushed expectations to register at the highest point since July 2021, strong retail sales data from December, and the lowest level of initial jobless claims in over a year. Positive economic news, coupled with diminished chances of a March rate cut, have pushed bond yields to the highest levels in a month. Americans are feeling positive about the economy, their incomes, and the outlook on prices. Notably, the increase in consumer sentiment was accompanied by another drop in year-ahead inflation expectations, which have returned to a level not seen in three years.
The preliminary reading of the University of Michigan’s Consumer Sentiment Index for January was well ahead of estimates, hitting its highest level since July 2021 with year-ahead inflation expectations decelerating to 2.9 percent from 3.1 percent, a rate not seen in just over three years. Existing home sales decreased 1.0 percent month-over-month in December to a seasonally adjusted annual rate of 3.78 million from 3.82 million in November. Sales were down 6.2 percent from the same period a year ago as high mortgage rates continue weighing on the overall level of activity, though they have not stopped prices from continuing to climb.
Last week’s batch of data, which included a mix of high consumer confidence and lower inflation expectations that points toward a soft landing for the U.S. economy and Fed Chair Powell’s war on inflation, has dropped the implied likelihood of a 25-basis points rate cut at the March FOMC meeting to 45 percent currently from over 55 percent seen at the beginning of last week. While investors continue to chip away at bets that the Fed will cut rates early and aggressively this year, there remains a significant gap in the market and Fed expectations for the fed funds trajectory this year.
It all points to a solid American economy, notably more so despite a Fed rate-tightening campaign that seemingly has broken the back of inflation. However, investors are eager to know when those rate hikes will be reversed; expect them to wait to ease, and that the market will merge with what the Fed thinks. The Fed will err on the side of being conservative.
Central banks will also be busy, with monetary policy statements and interest rate decisions expected from the Bank of Japan, European Central Bank, and Bank of Canada. In the U.S., Federal Reserve members will be in a blackout period of no public talks ahead of the next FOMC meeting on January 30-31.
This week’s economic calendar includes month-end auctions consisting of $162 billion 2-year, 5-year, and 7-year notes tomorrow through Thursday with $18 billion 2-year FRNs also on Wednesday, Fed surveys, S&P Global PMI flashes, durables goods orders, the first look at Q1 GDP (expected at 2.0 percent), new home sales, and Fed favorite PCE on Friday. Expectations are for the core PCE Price Index to increase 0.2 percent month-over-month and 3.0 percent year-over-year versus 0.1 percent and 3.2 percent previously. No Fed speakers are scheduled with the Fed in their blackout period.
Additionally, this week brings the ECB’s first monetary policy meeting of 2024 and a rate decision from the Bank of Japan. Today’s economic calendar sees just one data point with leading indicators for December. (The forecast is for unchanged which, if realized, would be the first non-negative reading in 21 months.) We begin the week with Agency MBS prices better by .125-.250, the 10-year yielding 4.09 after closing last week at 4.15 percent., and the 2-year at 4.38.
Download our mobile app to get alerts for Rob Chrisman’s Commentary.
Source: mortgagenewsdaily.com
You’re likely familiar with the story of Robinhood, the outlaw who stole money from the rich and gave it to the poor. Well, you’ll find a similar principle behind the investing app, Robinhood.
The founders of Robinhood aren’t stealing anything, but they do believe that the current financial system doesn’t benefit every American. For that reason, they make it easy for non-traditional investors to get started.
When you sign up for Robinhood, you get access to commission-free trades, a cash management account, and a lot more. Keep reading to learn more about the pros and cons of signing up for Robinhood, as well as whom the app is best for.
Robinhood is a popular investing app that allows users to trade stocks, options, exchange-traded funds (ETFs), and even cryptocurrencies without paying any commission fees. It was founded in 2013 and has since grown to over 22 million users, disrupting the financial industry.
The app is designed to cater to non-traditional investors and make the financial system more accessible to everyone. In this Robinhood review, we’ll explore its features, pros and cons, and determine who it’s best suited for.
When you sign up for a Robinhood account, you’ll get your first stock for free, even if you don’t deposit any funds. Signing up for an account is easy. All you have to do is enter your name, email address, and create a password.
From there, you’ll be prompted to enter more personal information, like your address and Social Security Number. Robinhood is required by federal law to request this information.
After you’ve set up your brokerage account, you’ll outline your investing experience thus far. And to go forward, you will need to fund your account at this point. However, there’s no minimum deposit required to fund the account, so you can always start small and invest more later.
You can connect your bank account to the Robinhood app to make funding your account easier. And there are no fees for transferring money in and out of your account.
User-friendly interface: One of the key selling points of Robinhood is its simple, user-friendly interface. Both the web and mobile versions of the app have been designed to make it easy for users to navigate and trade. The intuitive design allows users to quickly understand their account, monitor their investments, and execute trades with minimal hassle.
Account setup and verification: Setting up an account with Robinhood is a straightforward process. Users can sign up with just their name, email address, and a password. Further personal information, such as address and Social Security number, is required due to federal law. Once the account is set up, users can outline their investing experience and link their bank account for easy funding.
Robinhood offers several features that make it stand out from other investing apps:
Zero commissions: As mentioned earlier, Robinhood has been a pioneer in offering commission-free trading on stocks, options, ETFs, and cryptocurrencies. This feature has helped democratize investing and lower the barriers to entry for non-traditional investors.
Cryptocurrency trading: Robinhood is among the few investing apps that support cryptocurrency trading. Users can trade popular cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Dogecoin. This added functionality allows users to diversify their investments within a single platform.
Mobile app: Robinhood’s mobile app is highly regarded for its ease of use and clean design. Users can quickly view their portfolio, monitor market news, and execute trades on the go.
Account notifications: Users can customize their notification settings to receive alerts about their account performance, significant price movements, and other relevant information.
Daily market updates: Robinhood’s news feed provides users with daily updates on market trends, economic news, and other developments that can impact their investments. This helps users stay informed and make better investment decisions.
In addition to the features already discussed, Robinhood offers various other aspects that make it an attractive choice for investors. Let’s dive into some of these additional features and see how they can benefit users.
Robinhood allows users to participate in extended-hours trading, which includes pre-market and after-hours trading sessions. This feature gives investors the opportunity to act on news and events that happen outside of standard market hours, potentially capitalizing on price movements before the broader market reacts.
Robinhood offers options trading, which involves buying and selling contracts that give investors the right, but not the obligation, to buy or sell a stock at a specific price within a specified period. This feature enables users to implement more sophisticated trading strategies and potentially profit from market volatility, while also providing the flexibility to manage risk according to their preferences.
Robinhood supports a Dividend Reinvestment Program, allowing users to automatically reinvest their dividends back into the underlying stocks or ETFs. This feature can help investors grow their portfolios more efficiently over time by harnessing the power of compounding returns, allowing them to maximize their potential earnings.
In addition to allowing fractional share purchases, Robinhood also enables users to reinvest dividends as fractional shares. This functionality ensures that users can continue to grow their investments, even if they don’t have enough dividends to purchase a full share, making it a valuable tool for long-term wealth accumulation.
Robinhood offers instant deposits for its users, allowing them to access their transferred funds more quickly (up to $1,000). This feature ensures that users can take advantage of investment opportunities without waiting for their funds to settle, providing a more seamless investing experience.
Robinhood prioritizes the security of its users’ accounts and personal information. The platform uses industry-standard encryption and security measures to protect user data. Additionally, Robinhood accounts are insured by the Securities Investor Protection Corporation (SIPC) for up to $500,000, including a $250,000 limit for cash. This protection offers users peace of mind as they navigate the world of investing.
Robinhood offers various educational resources, including articles and guides, to help users improve their investment knowledge and make more informed decisions. These resources can be especially beneficial for new investors looking to learn more about the world of investing, equipping them with the knowledge needed to navigate the markets confidently.
Robinhood’s platform has a social component, allowing users to follow friends, family members, or other investors and view their portfolios. This feature can create a sense of community and motivate users to learn from one another’s investment strategies, fostering collaboration and the sharing of ideas.
There are several advantages to using Robinhood as your investing app of choice:
Despite its numerous benefits, there are a few drawbacks to using Robinhood:
Robinhood Gold is a subscription-based premium service that offers a suite of advanced features designed for more experienced investors. By upgrading to Robinhood Gold, users can access the following benefits:
While standard Robinhood users can access instant deposits of up to $1,000, Robinhood Gold subscribers receive instant deposits depending on their account balance. This feature allows users to invest larger amounts immediately, without waiting for their funds to settle.
Gain access to Level II market data provided by Nasdaq TotalView, which shows real-time bids and asks for stocks. This advanced market data can help users make more informed trading decisions by providing greater transparency into market activity.
Robinhood Gold allows users to trade on margin, providing them with access to additional buying power by borrowing funds from Robinhood. With margin trading, users can potentially amplify their gains, but should be aware that it also increases the risk of losses. It’s essential to carefully consider the potential risks and rewards before engaging in margin trading.
Subscribers receive access to research reports from Morningstar, a leading provider of independent investment research. These reports can help users make more informed decisions by offering in-depth analyses of individual stocks and industries.
Robinhood Gold users have the opportunity to invest in initial public offerings (IPOs) before the stocks are listed on public exchanges. This feature allows users to potentially profit from the early stages of a company’s growth, as well as gain exposure to new and innovative industries.
The cost of Robinhood Gold is $5 per month, which includes access to all the premium features mentioned above. It’s important to note that margin trading also comes with additional fees based on the amount borrowed, so users should carefully consider the costs before utilizing this feature.
Robinhood is best suited for new investors who want an easy-to-use platform to start trading with minimal barriers to entry. It’s also an excellent choice for casual investors who prefer a more hands-off approach, as the app’s features and design make it easy to monitor investments and stay informed on market trends.
For those interested in margin trading, Robinhood Gold is an option worth considering. This premium service costs $5 per month and provides access to additional margin, ranging from $5,000 to $50,000, depending on the user’s deposit amount.
However, Robinhood may not be the best fit for individuals focused on long-term retirement savings, as it doesn’t offer retirement accounts or investment options like bonds and mutual funds. Additionally, more experienced investors seeking advanced research tools and a wider range of account types may find Robinhood’s offerings somewhat limited.
While Robinhood is a popular choice for many investors, it’s essential to consider other factors and alternatives before deciding on an investing platform.
Tax implications: Investing through Robinhood’s individual taxable account means that any capital gains or dividends received will be subject to taxation. Users should be aware of the tax implications of their investments and consider seeking professional tax advice.
Risk management: Investing always carries a degree of risk, and Robinhood is no exception. It’s crucial for users to assess their risk tolerance, diversify their investments, and develop a long-term investment strategy to minimize potential losses.
Alternatives to Robinhood: There are several other investing apps and platforms available that cater to different types of investors. Some popular alternatives include:
Robinhood is a solid option for new investors looking to explore the world of trading without paying commission fees. The user-friendly interface, zero-commission trades, and various features make it an attractive choice for casual investors or those just starting. However, more experienced investors or those with specific account needs may need to consider other brokerage platforms.
By weighing the pros and cons, potential users can decide if Robinhood is the right fit for their investment goals and preferences. With no commitment required and a free stock upon sign-up, there’s little risk in giving Robinhood a try and determining if it meets your investing needs.
Source: crediful.com
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If someone reports their company for tax evasion in the U.S., he or she will receive 30 percent of the amount collected. Have you ever loaned someone money and had them not pay you back? Here’s one thing that you can do to them (IRS’ 1099-C). While we’re on the general topic, despite strong retirement savings, Fidelity Investments’ Q3 2023 analysis reveals a surge in hardship withdrawals and 401(k) loans, addressing short-term financial challenges. By the numbers: 3 percent took hardship withdrawals (up from 1.8 percent in 2022). 8 percent tapped into 401(k) loans (compared to 2.4 percent last year). The silver lining? Retirement balances are on the rise, and savings rates remain steadfast. For those planning retirement, consider suggesting reverse mortgages as a game-changer. They offer an alternative, allowing access to funds without swiftly depleting hard-earned savings. If you haven’t set up reverse division at your shop, well, 10,000 people a day turn 62. Today’s podcast can be found here, and this week’s is sponsored by Gallus Insights. Mortgage KPIs, automated at your fingertips. Gallus allows you to go from data to actionable insights. If you can use Google, you can use Gallus. Hear an Interview with attorney Brian Levy on the NAR lawsuits and the implications for housing finance moving forward.
Broker and Lender Software, Products, and Programs
Are you a compliance nerd? A group of mortgage industry veterans has launched a software company for loan servicing that is getting a lot of attention. Keep your eyes and ears open for MESH software (Mortgage Enterprise Servicing Hub), which is their brand name for a series of software products aimed at loan servicers. The first product runs hundreds of compliance rules on loan portfolios daily, so servicers have a daily review of all loans against everything the CFPB, Agencies and States can throw at them. Look up “MESH Auditor”.
It’s time to start planning for the year ahead! Join the Computershare Loan Services (CLS) team from January 22 – 24 in The Big Easy for MBA’s Independent Mortgage Bankers Conference. With CLS’ originations fulfillment, co-issue MSR acquisition, subservicing, and mortgage cooperative, IMBs can streamline their operations, minimize expenses, and maximize profits. Contact the CLS team today to schedule a meeting in New Orleans.
Ring in the new year with a kinder outlook by joining us for the highly anticipated “Kind Mindset” event presented by Kind Lending. Taking place on January 16th, 2024, at The Buckhead Club in Atlanta, GA, this immersive event is designed to empower attendees with valuable insights on growth, success, and mindset. With an impressive lineup of speakers, including Kind Lending’s CEO/Founder, Glenn Stearns, and special guest Captain Charlie Plumb, 6-year Prisoner of War and former Fighter Pilot, this event promises to be a transformative and inspirational experience. Get ready to cultivate a “Kind Mindset” and embark on a journey of transformation and success. Register today.
Aging, Down Payments, and Housing Demographics
Do you think getting old is hard? The U.S. Census Bureau released a report showing that about 4 million U.S. households with an adult age 65 or older had difficulty living in or using some features of their home. About 50 million, or 40 percent, of U.S. homes had what were considered to be the most basic, aging-ready features: a step-free entryway into the home and a bedroom and full bathroom on the first floor. About 4 million or 11 percent of older households reported difficulty living in or using their home. The share increased to nearly 25 percent among households with a resident age 85 or older. Over half (about 57 percent) of older households reported their home met their accessibility needs very well, but only 6 percent of older households had plans to renovate their home in the near future to improve accessibility.
In general, Zillow expects home prices to remain roughly flat in 2024, with only a 0.2% increase in its housing market index. Existing home sales are expected to fall further to 3.74 million. Zillow does mention that this forecast does not take into account the latest forecast from the Fed, and the expectation for big rate cuts in 2024.
Falling mortgage rates have put some spring in the step of the homebuilders, according to the latest NAHB / Wells Fargo Housing Market Index. As one would expect, with mortgage rates down roughly 50 basis points over the past month or two, builders are reporting an uptick in traffic as some prospective buyers who previously felt priced out of the market are taking a second look. With the nation facing a considerable housing shortage, boosting new home production is the best way to ease the affordability crisis, expand housing inventory and lower inflation. But builders have lagged production for so many years…
Non-builder loan officers find the builder world a tough nut to crack. Many, if not most, big builders are dealing with the mortgage rate issue by subsidizing buy-downs. Builders generally build free upgrades into their models, and these funds are being used to buy down the rate. The builder gets full price for the house, loses a few points on the mortgage, which might have instead gone to upgraded countertops or something else.
Even if one can get approved for a loan, buying can still be prohibitively expensive. Receiving help from family and friends for that crucial down payment can be a major turning point for many consumers. In fact, nearly 2 in 5 homeowners (39 percent) have received down payment assistance, according to LendingTree’s Mortgage Down Payment Help Survey, of nearly 2,000 U.S. consumers. 78 percent of Gen Z homeowners reported some financial support for a down payment, mostly from their parents. 54 percent of millennials have received down payment help, followed by 33 percent of Gen Xers.
Almost a third (31 percent) of Americans think putting down 20 percent for a down payment is obligatory. However, 59 percent of current homeowners say their down payments were less than 20 percent of the home’s purchase price, and just 29 percent put down 20 percent or more. One in 10 Americans never took out a mortgage, while 15 percent had a mortgage but have since paid it off. Baby boomers are the most likely to have paid off their mortgages, at 29 percent.
As anyone shopping for a home can tell you, it’s slim pickings out there. For many years we have been seeing the biggest squeeze in the starter home category. It appears that for years part of the problem is a lack of confidence to move up to the next category. People in starter homes are staying put, which is keeping homes off the market.
Capital Markets
It was another slow news day yesterday without any meaningful economic data or news to move sentiment. However, investors are laden with optimism as a soft-landing for the economy comes into view and seem to be throwing caution to the wind with over 150 basis points of Fed Funds easing fully priced in for next year. In accordance with that, benchmark bonds rallied to fresh highs yesterday after the U.S. Treasury sold $58 billion in 5-year notes to excellent demand. The strong auction exposed some short positioning, and it invited additional late buying. That followed Tuesday’s $57 billion 2-year Treasury auction that attracted a record number of indirect buyers to snap up high yields before the Fed’s anticipated rate cuts, which are fully priced in to begin at the March meeting in just over 80 days. Yields on benchmark treasuries have dropped to levels not seen since the summer.
Today has a fuller calendar than the past two sessions in regard to economic news. We are under way with initial jobless claims (+12k to 218k, a little higher than expected), continuing claims, advanced economic indicators for November (goods trade balance, retail inventories, and wholesale inventories), none of which moved rates. Later today brings the NAR’s Pending Home Sales Index for November, Freddie Mac’s Primary Mortgage Market Survey, and another large amount of supply from the Treasury, headlined by $40 billion 7-year notes. We begin the day with Agency MBS prices worse a few ticks (32nds), the 10-year yielding 3.81 after closing yesterday at 3.79 percent, and the 2-year is down to 4.25.
Download our mobile app to get alerts for Rob Chrisman’s Commentary.
Source: mortgagenewsdaily.com