Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Housing experts say mortgage rates are likely to hover in the 7 percent range in May, amid elevated inflation that is keeping the Federal Reserve from reducing borrowing costs.
The high cost of home loans may keep buyers at bay as they await the decline of rates before they can make the leap toward homeownership.
Read more: Find the Lowest Rates From Top Mortgage Lenders
The Federal Reserve raised interest rates starting in March 2022 to its current two-decade high of 5.25 to 5.5 percent, a move geared to fight soaring inflation. This contributed to the push-up of borrowing costs, including for home loans. Inflation is still struggling to cool down to the 2 percent central bank target, which has forced policymakers to retain the high interest rate environment.
The 30-year fixed rate, for the week ending April 19, rose for the third week in a row to 7.24 percent—the highest level since November 2023.
Economic data, particularly around inflation, have come in higher than expected over the last few weeks. In March, inflation jumped to 3.5 percent on a yearly basis, up from 3.2 percent the prior month.
Unless inflation surprises in the coming weeks, mortgage rates are likely to stay in the 7 to 7.5 percent range, according to Realtor.com’s chief economist Danielle Hale. Fed policymakers are set to conclude their latest meeting on May 1, and they are unlikely to change their current stance on rates.
“Of all the data, I think that the inflation, specifically the [Consumer Price Index] out May 15, will have the biggest impact,” Hale told Newsweek. “Inflation and labor market data has come in higher and hotter than expected. This change in the data, which is driving a change in the outlook, has pushed interest rates, including mortgage rates, higher across the board.”
Read more: How to Get a Mortgage
High mortgage rates will depress buyers’ ability to buy homes.
“I expect homebuyers to approach the housing market more tepidly, and sales will reflect that trend,” Hale told Newsweek.
Orphe Divounguy, a senior economist at Zillow Home Loans, echoed Hale’s perspective on what will drive mortgage rates as inflation remains elevated.
“The fact that government borrowing remains high relative to demand for U.S. Treasury bonds is likely to continue to push yields—which mortgage rates follow—elevated,” he told Newsweek. “Looking into May, we can expect more rate volatility as investors and the Fed wait for more conclusive evidence of a return to low, stable and more predictable inflation.”
Buyers are still likely to be waiting for rates to fall but the key to the trajectory of rates will be how inflation performs over the coming months, said Holden Lewis, a home and mortgage expert at NerdWallet.
“Inflation remains stubbornly above the Fed’s target of 2 [percent], and mortgage rates won’t fall significantly until the inflation rate consistently drops for multiple months in a row,” Lewis told Newsweek. “Potential home buyers are holding back and waiting for mortgage rates to decline. The slowdown in home sales will allow the inventory of unsold homes to increase. That won’t stop home prices from going up, but it might slow down the pace of home price increases this summer.”
In May, policymakers from the Fed will reveal their latest rate decision and provide insights on the trajectory of borrowing costs. Also in May, the CPI inflation data reading for April will give insight into how prices are performing, which will give a signal to how rates might unfold over the next few weeks.
For the housing market, one silver lining may come from buyers who have to acquire homes due to personal situations.
Read more: How to Buy a House if You Have Bad Credit
“Purchases are likely to be dominated by movers who feel like they don’t have a choice to wait out higher rates, but rather, they have to move now for personal reasons,” Hale said.
Zillow’s Divounguy suggested that with mortgage rates expected to stay high, lower-priced homes could see escalated competition.
“We continue to expect significant competition this spring, especially for attractive listings on the lower end of the price range. New construction homes are selling well too; they’re available, and builders are offering financial incentives—such as rate buydowns and covering closing costs—to potential home buyers,” he said. “Remember, higher rates mean the home price a buyer can afford is lower, so if you’re shopping for a home in the mid-tier or lower, it’s best to assume you’ll run into some competition.”
Hale suggested that sellers, who can also be buyers, enter the housing market.
“With 80 [percent] of potential sellers having thought about selling for 1 to 3 years, it could be that higher rates are less of a deterrent this year than in the recent past,” she said.
The perspective from lenders appears to be that the 10-year treasury yields, currently at around 4.7 percent, will drop in the coming weeks to 4 percent and narrow the difference between mortgage rates and treasury rates.
“We expect the spread will tighten further by the end of 2024. The combination implies a 30-year fixed mortgage rate mostly unchanged in the coming weeks but eventually moving closer to 6.5 percent by the end of 2024,” Joel Kan, Mortgage Bankers Association’s deputy chief economist, told Newsweek.
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
Have you been asking yourself, “Should I move to Wichita?” If you’re looking for a city that offers a high quality of life and a welcoming atmosphere, this city may be the perfect place for you. Located in the heart of the Midwest, Wichita offers a special blend of urban amenities and small-town charm. From its dynamic arts and culture scene to its rich aviation history, there’s always something to explore in this bustling city. So, before making the move to Wichita, it’s important to know if your lifestyle is compatible with the area. In this article, we’ll discuss the pros and cons of living in Wichita to help you decide if it’s the right place for you. Let’s jump in.
Walk Score: 35 | Bike Score: 44 | Transit Score: 20
Median Sale Price: $232,000 | Average Rent for 1-Bedroom Apartment: $860
Wichita neighborhoods | Houses for rent in Wichita | Apartments for rent in Wichita | Homes for sale in Wichita
This city stands out for its affordability with the cost of living in Wichita 11% lower than the national average. This allows many residents to enjoy a comfortable lifestyle without breaking the bank. This affordability extends to various aspects of life, including groceries, utilities, and entertainment options. Additionally, the median home price in Wichita is about $200,000 less than the national average, making homeownership more accessible to a broader range of people.
With a Transit Score of 20, one of the drawbacks of Wichita is the limited public transportation options. The city relies heavily on buses, with a lack of extensive subway or tram systems found in larger cities. This can make commuting challenging for those without a vehicle, particularly in areas not well-served by the existing bus routes. Additionally, the frequency and coverage of bus services can be limited, especially on weekends and evenings, further complicating mobility for residents without cars.
Wichita is home to an exciting cultural scene boasting a variety of museums, galleries, and theaters. For example, the nearby Wichita Art Museum houses one of the largest collections of American art in the country. There are also numerous festivals and events throughout the year, including the Wichita River Festival, which attracts visitors from all over with its concerts, food, and fireworks. These cultural attractions provide residents with enriching experiences and opportunities to engage with the community.
Residents of Wichita must be prepared to face weather extremes throughout the year. The city experiences hot, humid summers with temperatures often soaring above 90 degrees Fahrenheit, while winters can be bitterly cold and snowy. Additionally, Wichita is located in an area prone to severe weather. This includes thunderstorms and tornadoes, particularly during the spring and early summer months. These weather extremes can be a significant drawback for those not accustomed to such variability.
Wichita possesses a strong job market, especially in the aviation, healthcare, and manufacturing sectors. The city is known as the “Air Capital of the World,” hosting numerous aerospace companies, including Spirit AeroSystems and Textron Aviation. This specialization has created a wealth of job opportunities for engineers, mechanics, and other skilled professionals. Additionally, the city’s healthcare system is a major employer, providing a range of career options for those in medical and allied health professions.
For those seeking a bustling nightlife, Wichita may fall short of expectations. While there are bars and entertainment venues, the variety and scale of nightlife options are limited compared to larger cities. However, the city has been making efforts to revitalize its downtown area. These efforts have introduced new venues and events aimed at enhancing the nightlife experience.
Wichita boasts a strong sense of community spirit, with friendly residents and a welcoming atmosphere. The city holds volunteerism and community events, which foster a sense of belonging and involvement among locals. Neighborhood associations and local groups are active in organizing events, beautification projects, and other initiatives that enhance the quality of life. This community-minded approach makes Wichita a great place to live for those who value connectivity and a supportive environment.
While Wichita has a growing food scene, the diversity in dining options can be limited compared to larger metropolitan areas. Residents looking for international cuisine might find the choices somewhat restricted, with a heavier focus on traditional American and barbecue fare. However, the city has seen an influx of new restaurants and food trucks in recent years. This has been slowly broadening the culinary landscape to include more varied and international dishes.
Wichita is surrounded by natural beauty and offers numerous parks and recreational areas.The city’s location along the Arkansas River includes scenic paths and parks perfect for walking, biking, and picnicking. Sedgwick County Park and the Great Plains Nature Center offer additional spaces for hiking, bird watching, and connecting with nature. These green spaces are a significant advantage for those who enjoy spending time outdoors.
Wichita sometimes struggles with the perception of being a “flyover” city, overlooked by those traveling between the coasts. This perception can impact the city’s ability to attract new businesses and tourists, who may not realize the cultural, recreational, and economic opportunities available. However, those who take the time to explore Wichita often discover a vibrant community full of surprises and hidden gems.
Wichita’s economy is not only strong in traditional sectors like aviation and healthcare but is also fostering an innovative business environment. The city is becoming a hub for startups and entrepreneurship, supported by initiatives like the e2e Accelerator and Wichita State University’s Innovation Campus. These efforts are creating a dynamic atmosphere for business development and innovation, attracting new talent and investment to the city. This entrepreneurial spirit is a significant pro for Wichita, signaling a bright future for its economy.
While Wichita offers beautiful parks and outdoor areas, the distribution of these public spaces can be uneven across the city. Some neighborhoods lack easy access to parks or recreational facilities, which can affect residents’ quality of life, particularly in more densely populated or underserved areas. Efforts are underway to address this imbalance, with plans for new parks and improvements to existing ones, aiming to ensure all Wichitans can enjoy the benefits of public spaces.
Source: rent.com
On most months in modern economic memory, a gain of 175k payrolls would be welcome news for the labor market. Depending on the context, it still is. But in today’s case, it’s much lower than the market expected and not a high enough number to justify the 4.6+ 10yr yields seen yesterday. Bonds rallied instantly when the news printed, but one rate-friendly jobs report is only a fine tuning adjustment to a rate environment dominated by inflation concerns.
Evidence of inflation concerns was available in real time today following the ISM Services data. The headline was weaker, which would normally be good for bonds. But the price component was quite a bit higher, which was enough for the bond market to react negatively.
Despite the push-back, bonds remain in much stronger territory and have now mad solid gains 3 days in a row. Yields are back in line with the afternoon of the last CPI day on April 10th.
Source: mortgagenewsdaily.com
Birmingham is one of the most pivotal cities in American history. From the echoes of the civil rights movement to the fascinating history of Rickwood Field, there’s a place for everyone to feel at home in Birmingham.
Birmingham is a great place for history buffs, outdoorsy types, science enthusiasts, and sports fans. It’s a city that is quickly on the rise and gaining more things to brag about at a breakneck pace.
Let’s take some time to explore ten of the top things Birmingham is known for, and start to understand why so many people are hoping to find an apartment in Birmingham.
The Birmingham Civil Rights Institute is a cornerstone of the city, providing an in-depth look at the civil rights movement in the United States. Interactive exhibits and archives tell the stories of the struggle and triumph that occurred in Birmingham during the 1950s and 1960s. The institute commemorates the past while fostering an ongoing dialogue about civil rights and justice in the contemporary world.
Home to the largest cast iron statue in the world, Vulcan Park is a symbol of Birmingham’s roots in the iron and steel industry. The park has a museum that provides insights into the city’s industrial past, while the statue itself represents the Roman god of fire and forge. It’s a popular spot for locals and tourists looking to learn more about Birmingham’s development and soak in a stunning view at the same time.
The McWane Science Center takes a hands-on approach to learning, with interactive exhibits and activities that cover everything from dinosaurs to space exploration. It’s a favorite among families, providing fun and educational experiences that encourage children and adults alike to engage with science in a playful environment. The center also has an IMAX theater that brings exciting scientific discoveries to life on a massive screen.
Red Mountain Park is a sprawling 1,500-acre park that supports a ton of outdoor activities including hiking, biking, zip-lining, and more. This park is the ideal spot for fun in the Birmingham sun. Its trails and scenic overlooks provide a peaceful escape into nature, reflecting Birmingham’s commitment to preserving community spaces within its historical industrial landscape.
Sloss Furnaces is a national historic landmark where visitors can explore the preserved blast furnaces that made Birmingham a leading iron producer in the late 19th century. Today, it operates as a museum and venue for concerts and festivals. This site educates its visitors on the harsh working conditions of the Industrial Age and the evolution of manufacturing technologies.
For motorsports enthusiasts and motorcycle history buffs, the Barber Vintage Motorsports Museum is a rare attraction. Housing one of the largest collections of motorcycles in the world, the museum displays over 1,400 motorcycles that span over 100 years of production. The museum also includes a beautifully designed racetrack that hosts a few high-profile races throughout the year.
The Birmingham Botanical Gardens is an oasis that features over 67 acres of beautifully landscaped gardens. With over 12,000 different plants, an extensive library, and several picturesque walking paths, it’s a favorite spot for plant lovers throughout the state.
One of the finest regional museums in the United States, the Birmingham Museum of Art holds an impressive collection that spans continents and centuries. With over 24,000 paintings, sculptures, prints, drawings, and decorative arts, the museum offers a comprehensive look at diverse cultures and histories. Its extensive collection of Asian art is particularly noted for its quality and breadth.
As the oldest professional ballpark in the United States, Rickwood Field holds a special place in the hearts of baseball fans. It’s a living museum of America’s pastime and hosts annual games including the celebrated “Rickwood Classic,” which allows players and fans to experience baseball in its historical form. The field has seen legends like Babe Ruth and Willie Mays play between its bases, adding to its significance and allure.
Constructed in 1927, the Alabama Theatre is a restored movie palace that’s now a venue for films, concerts, and performances. This historic theater is known for its elaborate architecture and the “Mighty Wurlitzer” organ—one of the few remaining in the United States.
Located in the heart of the San Francisco Bay Area, Oakland is an exciting and diverse city with a unique charm that sets it apart from its neighbors. From the stunning views of the Bay to the bustling arts and culture scene, there is no shortage of things to explore and experience. Residents of Oakland enjoy a rich history, a thriving culinary scene, and a strong sense of community that makes it a truly special place to call home. If you’ve been thinking, “Should I move to Oakland?” you’re in the right place. In this article, we’ll discuss the pros and cons of this city to help you decide if it’s the right place for you. Let’s get started.
Walk Score: 75 | Bike Score: 65 | Transit Score: 57
Median Sale Price: $840,000 | Average Rent for 1-Bedroom Apartment: $2,470
Oakland neighborhoods | Houses for rent in Oakland | Apartments for rent in Oakland | Homes for sale in Oakland
Oakland offers a blend of urban living and access to nature, making it an ideal location for outdoor enthusiasts. The city is surrounded by beautiful parks and green spaces. Including Joaquin Miller Park and Redwood Regional Park, offering miles of hiking and biking trails amidst towering redwoods. Additionally, Lake Merritt, located in the heart of the city, provides a scenic spot for jogging, picnicking, and bird watching. This easy access to nature allows locals to enjoy a variety of outdoor activities without having to venture far from home.
One of the major drawbacks of living in Oakland is the high cost of living, which is 39% above the national average. Housing prices have skyrocketed in recent years, making it challenging for some to afford a home in the city. Rent prices are also steep, putting financial strain on residents. The high cost extends beyond housing, affecting groceries, utilities, and other essential services, making it difficult for some individuals to manage their budgets comfortably.
Oakland’s culinary scene is as diverse as its population. From authentic Mexican taquerias and Ethiopian restaurants to upscale Californian cuisine, the city caters to all taste buds. The Temescal neighborhood, in particular, is a foodie’s paradise, known for its innovative dining options and trendy cafes. This culinary diversity not only enhances the city’s cultural richness but also provides residents with an endless variety of dining experiences.
Like many urban areas, Oakland suffers from significant traffic congestion. The city’s infrastructure struggles to keep up with the growing population, leading to crowded highways and extended travel times. The Bay Bridge, connecting Oakland to San Francisco, is notorious for its traffic jams, often resulting in long commutes for residents working in the neighboring city. Public transportation options are available, but they not serve all areas and suburbs equally, adding to the daily commute challenges.
Oakland’s arts and culture scene is a significant draw for both residents and visitors. The city is home to a plethora of galleries, theaters, and live music venues that showcase a wide range of artistic expressions. The First Friday street festival is a prime example, transforming the streets into a lively celebration of art, food, and music every month. Additionally, the Oakland Museum of California offers an in-depth look at the state’s rich history, art, and natural sciences, making it a cultural hub in the city.
Oakland faces challenges with air quality, particularly during the summer months and wildfire season. The city’s location and topography can trap pollutants, leading to days with unhealthy air quality levels. Wildfires in the region exacerbate the problem, sometimes resulting in smoke and ash affecting the city for extended periods. These air quality issues can sometimes limit outdoor activities and impact those with respiratory conditions.
Oakland has emerged as a burgeoning hub for technology and startups. This has attracted entrepreneurs and innovators looking for alternatives to Silicon Valley. The city offers a supportive environment for new businesses, with co-working spaces, incubators, and a collaborative tech community. This ecosystem not only contributes to the local economy but also provides job opportunities and fosters innovation.
Oakland’s infrastructure and public services face significant challenges. These issues include aging roads, limited public transportation options in certain areas, and a need for more robust public amenities. These issues can affect daily life, from commuting to accessing essential services. Efforts are underway to address these challenges, but progress can be slow, and funding is often limited. The state of the city’s infrastructure underscores the need for continued investment and innovative solutions to support Oakland’s growing population.
Oakland is at the forefront of environmental sustainability, with innovative initiatives aimed at reducing the city’s carbon footprint and promoting green living. The city has implemented policies to encourage recycling, composting, and the use of renewable energy sources. Urban farming and community gardens are widespread, contributing to local food security and fostering environmental awareness.
Source: rent.com
The bottom line is the housing market remains in flux and is once again adjusting to the likelihood of interest rates remaining higher for longer after being teased by the potential of a falling rate environment.
This flux has created far more volatility in the housing market, particularly in recent weeks, with the MOVE Index — a measure of rate volatility in the U.S. Treasury market — jumping to as high as 121 in mid-April after ending March near 85.
Ben Hunsaker, a Beach Point Capital Management portfolio manager who is focused on securitized credit, said that during the past year, nonqualified mortgage (non-QM) AAA bond spreads have actually contracted from 155 to 135, while agency mortgage-backed securities (MBS) spreads have widened from about 118 to 134 over the same period.
“With agency spreads moving out 10 to 15 basis points, you would expect that non-QM spreads also have to widen eventually, otherwise the market’s a little bit out of sync,” Hunsaker said. “On a forward-looking basis, you would expect you don’t have the same tailwinds as you did before.”
Volatility in the Treasury market, which trades at a shifting spread below that of mortgage rates, also translates into uncertainty among housing market investors. Market observers say this normally leads to investor hesitancy and a tendency to keep more money parked on the sidelines.
“When interest rate volatility goes up, you generally have lower fund flows, which you’ve seen over the last few weeks,” Hunsaker said.
On top of that, mortgage origination volumes are projected to be flat this year in the agency (Fannie Mae, Freddie Mac and Ginnie Mae) sector, and only slightly better on the non-agency (non-QM) side compared to 2023, according to market experts.
Non-QM mortgages include loans that cannot be purchased by Fannie Mae or Freddie Mac. The pool of non-QM borrowers includes real estate investors, fix-and-flippers, foreign nationals, business owners, gig economy workers and the self-employed.
What does this market uncertainty — marked by low origination volumes and a move toward higher rates for longer — mean for the secondary mortgage market, which creates liquidity for the primary mortgage market via securitization and has a heavy finger on the scale in determining interest rates for homebuyers?
If bond yields rise in the secondary market due to a supply-demand imbalance or because of increased perceived risk, then that also tends to put upward pressure on mortgage rates in the primary market.
HousingWire interviewed a range of experts across the secondary market to get a pulse on the dynamics at play at the end of April across the following sectors: whole loan trading, agency and non-agency MBS, and mortgage servicing rights (MSRs).
Following are excerpts from their responses that reflect on the good, the bad and the ugly of the current market.
“When we came into the year, we thought we were in for as many as five or six rate cuts. That was a problem for sellers of loans. For mortgages, specifically 30-year fixed rate, it was hard to find a buyer willing to make a strong premium payment [on a whole loan purchase] when you think you are going to get four or five or six rate cuts, because that meant rates were going to fall and [mortgage] prepayments [due to refinancing] were going to increase.
“However, what we’re discovering is that those folks that had the courage to put that trade on back in the third and fourth quarter of last year are in the first quarter of this year being rewarded. Because if we are now looking at only one rate cut [in 2024], maybe even one hike — although I think that’s still a pretty low probability — but let’s just say we’re flat — then prepayment speeds should remain low.
“Higher-coupon loans now may [offer] a higher rate of return for longer than someone might have anticipated in a rate assessment that was at the beginning of 2024. … So, basically, if I’m trading [as a seller] a 7% loan right now, I may get a premium — like a solid 102 [over par] or whatever.
“The buyer is going to be happy because the prepayment speeds are likely to remain low given the current Fed stance [of higher for longer], and you can amortize that premium over a longer period of time to get a better yield. So, both seller and buyer are happier with the newer loan.“
— John Toohig, head of whole loan trading at Raymond James and president of Raymond James Mortgage Co.
“There’s a lot of cash on the sidelines. There’s a lot of money out there. This translates into whole loans too.
“In RPL and NPL, which are reperforming loans and nonperforming loans, there’s a ton of demand. We just put a bid out recently and … had over 30 bids. That tells you that folks are trying to grab those loans, either for the real estate — if it’s a nonperforming loan … such as for rentals, accumulating assets for their portfolio — or if it’s reperforming, to get cash flows at a discount.
“Those loans [RPL and NPL] are really rich on the demand side, but the only sellers are those who are forced to sell because it’s at a discount, with the stuff we’ve seen trading in the 80s [below par].
— JB Long, president of Incenter Capital Advisors
“Rate volatility has persisted in the market. It’s essentially like playing a game of Keno [with bets being placed on] what number when, and that money can be lost doing so is not surprising. From my perspective, transaction volume and mortgage origination volume has been on its back — and stayed on its back — for the last year and a half.
“ … There is a book called “Who Moved My Cheese.” And it is a very simple book that highlights a very important premise. A mouse goes looking around, looking around, looking around, and spends all its time looking for cheese. Then [after it finds the cheese], it just keeps going back to the same place, but the cheese is gone.
“The mouse forgot the whole reason he ever found the cheese in the first place, and that’s because the mouse remained nimble and adaptive, as opposed to just hitting the same button as many times as he possibly could. The point is we have to continue to evolve with an evolving market.
“ … [For example], one of the big changes in the [agency] CRT [credit risk transfer] market has been a decision by the GSEs to not issue the most subordinate [securities] tranches. They are the riskiest tranches … and they’re the ones that offer the highest return. The supply of that profile has diminished considerably because they’re not issuing it anymore.
“… So, what happens is those investors go to non-QM subs. … There’s a lot of demand for that sub now [securities backed by non-QM mortgages, particularly those linked to home equity loan products].“
— Peter Van Gelderen, specialist portfolio manager in the fixed-income group and co-head of Global Securitized at TCW
“Inflation is running hotter than expected, but I wouldn’t say it’s out of control. We’ve just been kind of consistently in a range that’s higher than what the Fed would like. .. Rates do feel rich. They do feel high, but I think the market has adjusted pretty well to where the rates are and certainly it’s within the range of expectations.
“The credit spreads [for non-agency MBS] have come in throughout the year, and so the [non-agency] securitization market is open, and it’s functioning from the originator through the aggregator to the end buyer. Everyone can still make it work.
“It’s by no means the best market anyone’s ever seen, but [non-agency mortgage] originations are growing. … It’s a market that’s diverse in product types and participants.“
— Dane Smith, senior managing director and president of Verus Mortgage Capital
[Editor’s Note: Kroll Bond Rating Agency (KBRA) expects 2024 issuance for non-agency MBS to be approximately $67 billion, up 22% year over year. Home equity lines of credit (HELOCs) and closed-end second (CES) originations are expected to account for $11 billion of the increase. KBRA’s measure of non-agency loans encompasses the prime jumbo, nonprime/non-QM, and home equity lending spaces, as well as credit-risk transfer deals.]
“The lock-in effect [of homeowners staying in place due to low mortgage rates] has taken so many homes off the market that you’re seeing reduced sales volume, which creates fewer issuances of mortgages so that the market doesn’t have to metabolize that many loans.
“… But you still have this issue that the Fed displaced real money investors [in the agency MBS acquisition market] for a whole business cycle, a decade, [before pulling back from the market starting in 2022] and that market just doesn’t reappear overnight.
“… We’ve never had this many people that have a loan that’s so far below prevailing rates. So, we’re in a part of the cycle that people can’t look to a model and say, ’This is what’s going to happen,’ because we’ve never been here before.
“… Lower interest rates will create more [agency MBS] issuance, but more issuance creates a wider basis [spread from Treasurys] because there’s now a lack of investor demand versus the added MBS supply, and this creates higher primary mortgage rates to account for the lower investor bids for the excess MBS supply.
“… It’s a structural issue that I would love to see more focus on … because if you don’t have a couple of trillion dollars of excess balance sheet out there somewhere that’s priced appropriately, then the homeowner is going to end up paying more for their mortgage than they otherwise would.“
— Sean Dobson, chairman and CEO of real estate investment firm Amherst
“I think agency spreads have a pretty high correlation to interest rate volatility, so when you go from relatively low interest rate volatility, like where we came into April, to where we are today, it’s a pretty big shock to the agency mortgage market.
“And accordingly, you’ve seen agency spreads widen pretty materially. [April has] been a really bad month for agency mortgage-backed securities. … The supply-demand for agency MBS is probably in balance, however, and it’s in balance because there’s very light creation of new agency MBS [about $232 billion of agency MBS issuance in Q1 2024, compared with $223 billion in Q1 2023, according to the Securities Industry and Financial Markets Association (SIFMA)].
“… The money managers who really drove spreads tightening [in the agency market] from middle of last year to the end of last year, they’ve become pretty overweight in agency MBS. … But there’s still a lot of annuity money being deployed from annuity sales, and so that should be a continued tailwind [for the overall secondary mortgage market].
“Insurance is really the 900-pound gorilla in the room driving the bus, so they matter a lot, and there’s not a lot of credit creation that can satiate their needs.“
— Ben Hunsaker, portfolio manager focused on securitized credit for Beach Point Capital Management
“You were able to get [MSR] trades off [much of] last year with interest rates somewhat certain. But then when the uncertainty hit [late in the year, with rates declining] that slowed the fourth-quarter [deal volume], and that’s what was reflected [in the number of deals closing] when we came into this first quarter.
“Then all this data starts coming out and it became obvious that [rate cuts were] not going to happen, and that gave a lot more confidence to the buy side. [MSRs tend to price better in a high or rising rate environment because prepayment speeds are reduced. They tend to lose value in a falling rate environment as mortgage prepayments increase, reducing the payout of MSRs.]
“So, look, pricing began to pick up [as it became clear rate cuts were not likely in the near term], but we also saw an interesting phenomenon. And that is the capital that was tied to highly efficient, highly capable [refinance- and home equity loan-focused] recapture platforms decided it was not as concerned about interest rates [going] either way.
“If rates do not move, [they are] comfortable with the pricing that they’re paying today based on just the steady prepayment speeds and the cash flows, and they’re clipping coupons each month based off of those payments coming in. However, when rates do move, they are going to be in position to recapture [those customers via refinancing].
“… So, we now have a strong appetite for the MSR asset, whether it’s out of the money — which to us is below prevailing market rates — or at the money, and we also have a strong demand for both conventional as well as government [MSR assets].
“I will paraphrase a seasoned veteran in the industry that I was talking to recently, who said candidly, ’I have never seen the market like it is today — how extremely active and busy it is.’
“I’m not calling a peak yet. There’s a lot of interest from some pretty significant [investor] sources, who have a lot of capital [and] who are still looking to buy … And it’s driven again by [a desire to] put units on their platform, maintaining efficiencies, while also then having the ability to recapture when — and who knows when — that market opportunity presents itself.“
— Tom Piercy, chief growth officer at Incenter Capital Advisors
[Editor’s Note: Year to date, Incenter has announced auctions for some $15 billion in new bulk MSR deals, which does not include privately negotiated deals.]
“I don’t know if this is the peak or if … rates are going to continue to go up from here, and MSR values are going follow suit or not. But I think people are of the mindset that it’s now higher for longer [on rates].
“It’s hard because of low [housing] inventory levels and higher interest rates to bring in new originations, but that’s the reason why so many of these servicers keep going back to the same well, with a focus on offering cash-out refinance [or closed-end second liens, or home equity lines of credit] to existing customers, given that can be a source of some volume.
“It’s been a strong [MSR] market [so far this year], with some really attractive execution levels that are, dare I say, being influenced by one’s ability to recapture these borrowers. … It’s hard to convince a borrower with a 3% note rate to cash-out refinance into a 7% note rate, but they can still tap their equity by taking out a HELOC or closed-end second without impacting the rate on their first lien.
“I’ve got probably three or four deals I’m currently working on, so [MSR] volume and pricing are strong. We’ve seen some high-5 multiple trades [historically a great deal in this measure of pricing on MSR pools].
“I think [MSR trading volume] this year is going to be on par, if not slightly better, than last year [which would mark the fourth year in a row that the MSR market has recorded trading volume near the $1 trillion level].“
— Mike Carnes, managing director of MSR valuations at Mortgage Industry Advisory Corp. (MIAC)
[Editor’s Note: Year to date, MIAC has announced auctions for some $6.4 billion in new bulk MSR deals, which does not include privately negotiated deals.)
Source: housingwire.com
Mortgage rates rose for the fifth consecutive week, but so far it has had limited influence on this year’s spring home purchase season, Freddie Mac commented.
The 30-year fixed rate mortgage increased by 5 basis points this week to 7.22%, tying a level last seen at the end of November, the Freddie Mac Primary Mortgage Market Survey found.
For April 25, the 30-year FRM was at 7.17%, while for the same week in 2023, it averaged 6.39%.
For the 15-year FRM, the average rose three basis points, to 6.47%, from 6.44% and a year ago at this time, the 15-year it averaged 5.76%.
“With two months left of this historically busy period, potential homebuyers will likely not see relief from rising rates anytime soon,” Sam Khater, Freddie Mac’s chief economist, said in a press release. “However, many seem to have acclimated to these higher rates, as demonstrated by the recently released pending home sales data coming in at the highest level in a year.”
According to LenderPrice data posted late morning on Thursday on the National Mortgage News website, the 30-year FRM was at 7.36%, nearly 10 basis points lower than it was at the same time last week, 7.457%.
One of the elements in pricing mortgages, the 10-year Treasury yield, has remained elevated, even though it was down from one week ago, when on April 25, it peaked at 4.74%. By April 29, it closed at 4.61%.
This reflects market conditions following the Federal Open Market Committee’s decision at its April/May meeting not to change short-term rates. Investors, who once thought a June cut was likely, have backed off that position.
Rates are likely to remain in the 7% range in the future, said Richard Martin, director, real estate lending solutions for analytics firm Curinos, which also tracks mortgage rate data. He added that while he expects rates to fall a bit by the end of the year, he is a little more bearish than Fannie Mae’s latest outlook.
In terms of the impact on mortgage rates, the Fed’s decision was anticipated and already priced in.
“I like to characterize it as no one predicted the level and pace of increases no one’s going to predict the level and paces of decreases,” Martin said. If the FOMC was to cut rates, it would likely be closer to the end of the year.
On April 30, the first day of the FOMC meeting, the yield moved higher again, by a little over 7 basis points to just shy of 4.68%. However, the next day, it went down to 4.60%.
As of mid-morning on Thursday, the 10-year yield was almost 4 basis points higher.
Where mortgage rates currently are makes the environment tough for mortgage originators and title underwriters, but is good for companies that are “servicing-heavy,” said Bose George in a commentary issued after the FOMC meeting.
“Despite the headwinds around mortgage volumes, stable home price appreciation should remain a positive for mortgage credit,” George said.
Martin expects rates to hold in the current range, as does Redfin’s economic research lead Chen Zhao.
“The Fed meeting is unlikely to push mortgage rates down — but the good news is that it won’t push them up, either, which could have happened if the Fed took 2024 rate cuts off the table,” Zhao said in a press release. “Even though housing costs shouldn’t climb much more, they will remain elevated for the foreseeable future, which could push more buyers away.”
Martin is leaning towards a mild recession occurring in the future, noting the U.S. economy is not yet out of the woods.
The 10-year Treasury is just one influence on mortgage pricing; the other is the primary-secondary market spreads related to securitization activity.
Federal Reserve Chairman Jerome Powell noted that the Fed will reinvest any proceeds from mortgage-backed securities run-off over $35 billion into Treasuries. That translates into lower purchase activity
“While this is in line with market expectations, we think this will continue to be negative technical for agency MBS,” George said.
It is not just those spreads that could influence pricing, Martin said, noting the record per-loan production losses originators suffered last year.
Homebuyers are still suffering from interest rate shock, said Jeremy Sicklick, CEO of real estate firm HouseCanary. “With mortgage rates creeping over 7%, many buyers and sellers alike seem to be holding out for rate cuts in the months ahead before jumping into the housing market,” Sicklick said in a press release.
HouseCanary data found the median price of all single-family listings rose 3.2% over a year ago, while closed listings rose 8%.
“With high mortgage rates and surging home prices tamping down market activity, we expect to see a subdued spring buying season continue throughout May, despite inventory increases,” Sicklick declared.
But besides higher rates, the problems around inventory and affordability remain.
“I think we’ve got to solve for those in concert,” Martin said. “Lower rates will help but I don’t think it’s enough to really materially move that needle.”
Source: nationalmortgagenews.com
Making the move from an apartment to a house is a significant step in many people’s lives. It often signifies a transition to a new stage, whether it’s starting a family, advancing in your career, or simply desiring more space and freedom. While apartment living has its perks, such as convenience and lower maintenance, upsizing to a house offers numerous advantages that can greatly enhance your quality of life.
Breaking down what upsizing truly means creates a less overwhelming experience.
One of the most obvious advantages of moving from an apartment to a house is the increase in living space. Houses typically offer larger rooms, additional bedrooms, and more storage options, allowing you to spread out and enjoy more privacy. This extra space is especially beneficial for growing families or individuals who work from home and need a dedicated office space.
With more space, however, comes more stuff. Kelly Dever, founder of Your Right Hand Mom, recommends setting intention into place before you upsize. “Begin your upsizing journey by downsizing your belongings,” Dever notes. “A thorough declutter session before you pack means you only bring items that add value and joy to your new home. This not only simplifies moving but also eases the organization process in the larger space.”
Dever also notes this will create ease around filling your new space. “As you settle into your new house, systematically assign a home for every item. This practice wards off the sprawl of random clutter and cultivates an environment where order prevails.”
Ronda Bowen, of The Well Caffeinated Mom, echoes that decluttering is important when moving into more space. “If you have boxes of random things (referred to as doom boxes), go through those boxes, declutter them, and repack them where they belong,” Bowen emphasizes. “When you arrive in your new space, do your best to unpack your home within the first couple of weeks of living there to avoid new clutter.”
Upsizing your home will allow for more space to show your creative side in design, Jamie Mitri, founder and CEO, of Moss Pure shares. “Upsizing creates the opportunity to add wall art to your wall space and do it in a unique and custom way. For example, you can own a larger, custom piece of wall art, like one by Moss Pure, instead of several smaller pieces of art,” Mitri explains.
“Moss Pure creates stunning spaces using live moss wall art that doubles as an art filter and stress relief device. The live moss stays alive in the patent-pending design indefinitely without needing watering, sunlight, or maintenance. And it’s totally customizable to your space.” Unique decoration opportunities, like Moss Pure, can transform your house into a personalized sanctuary that reflects your taste and style.
Going from small decorating and living space to almost double the space can also be challenging and overwhelming. Ana with Mrs. American Made, recommends not jumping immediately to buying a ton of new furnishings and decor. “My best advice is to decorate and organize with secondhand items,” Ana suggests. “It’s better for the environment and more eco-friendly. There are so many gently used unique, useful, and cute items out there that it doesn’t make sense to buy new and at full price.”
For those who prefer to ease their way into decorating a larger space, Shay Moné recommends starting with simply painting the walls. “Paint is the easiest way to elevate a space, and a fresh coat of any shade of white can do the trick,” Moné explains. Her top six creamy white paint colors are:
Many apartments lack outdoor space or have limited access to communal areas. Moving to a house often means gaining a backyard, patio, or garden where you can relax, entertain guests, and enjoy outdoor activities. Having your own outdoor space provides opportunities for gardening, barbecuing, or simply soaking up the sun on a lazy afternoon.
Houses typically offer greater privacy compared to apartment living, where you may share walls, floors, or ceilings with neighbors. With more space between you and your neighbors, you can enjoy a quieter and more peaceful environment, free from the noise and disturbances often associated with communal living.
Owning a house can be a smart long-term investment, as real estate tends to appreciate in value over time. Unlike renting, where your monthly payments only benefit the landlord, homeownership allows you to build equity and potentially profit from property appreciation.
While apartment complexes often foster a sense of community through shared amenities and social events, living in a house within a neighborhood offers a different type of community experience. You can get to know your neighbors, participate in local events and activities, and become involved in neighborhood associations or volunteer groups. Building relationships with your neighbors can enrich your life and provide a support network within your community.
Unlike renting, where maintenance and repairs are typically handled by the landlord, homeowners are responsible for maintaining their property. This includes tasks such as lawn care, snow removal, and regular upkeep of the house’s exterior and interior. While this additional responsibility requires time and effort, it also allows homeowners to take pride in their property and ensure it remains in good condition.
Upsizing to a house often comes with higher expenses compared to renting an apartment. In addition to mortgage payments, homeowners must budget for property taxes, homeowner’s insurance, utilities, and ongoing maintenance costs. It’s important to carefully evaluate your financial situation and create a realistic budget to ensure you can afford the additional expenses associated with homeownership before moving from apartment to house living.
While moving from apartment to house living or otherwise upsizing may induce stress, Megha with Crafts N Chisel reminds us of the beauty in this exciting life change. “Transitioning from an apartment to a house presents an exciting opportunity to elevate one’s design and decorating experience. A well-adorned environment fosters mental agility, with walls and tables adorned with vibrant art and uplifting themes promoting a healthy mind and body,” Megha shares. “Harmony is achieved by aligning the color scheme of artworks with that of furniture and furnishings while ensuring proportional sizing and placement. This balance enhances both the beauty of art and the space it inhabits.”
By taking the time to consider these factors and truly embrace the excitement of the upsizing adventure, you’ll be equipped to make a decision that feels right for you and your loved ones. Sure, there may be hurdles along the way, but the potential rewards of homeownership just might be worth it. From having more space to call your own to the joy of customizing every nook and cranny, owning a house can be a deeply fulfilling journey that enriches your life and creates lasting memories for you and your family.
Source: rent.com
Fort Wayne is a growing Midwestern city with a lot to offer. From one-of-a-kind festivals to innovative breweries, the city has options for anyone looking to find a home in the Fort Wayne area.
As the second-largest city in Indiana, Fort Wayne has developed a distinctive identity through its kind people and unique attractions. Whether you’re exploring its scenic parks, tasting its local flavors, or meeting the people, there’s always something memorable to discover.
Below is a list of ten of the top things that Fort Wayne is known for so you can see a whole new side of this Midwestern gem.
Fort Wayne Children’s Zoo is a family-friendly spot in the heart of the city. Known for its well-maintained animal exhibits and child-friendly activities, the zoo spans over 40 acres and houses hundreds of animals from around the world. It’s particularly famous for its African Safari journey where children can get up close with giraffes and zebras.
Each year, Fort Wayne pays homage to John Chapman, better known as Johnny Appleseed, with a festival that transports visitors back to the 1800s. The Johnny Appleseed Festival features period crafts, food, and music, celebrating the legendary figure who planted apple trees across the United States. This event has historical reenactments that offer a glimpse into the pioneer life.
The Fort Wayne TinCaps, a Minor League Baseball team affiliated with the San Diego Padres, play their games at the modern Parkview Field. This ballpark is a centerpiece of downtown Fort Wayne and has a fantastic family-friendly atmosphere. The name “TinCaps” references the tin pot that Johnny Appleseed famously wore on his head, linking the team to local lore.
Since opening its doors in 1914, Fort Wayne’s Famous Coney Island has been a landmark for classic American cuisine. Known for its coney dogs, the nostalgia-inducing diner transports patrons back in time with its vintage décor.
Science Central is a hands-on science museum located in a former power plant. It has over 200 exhibits ranging from a high-rail bike to a giant slide that teaches physics through play. Science Central is instrumental in providing STEM education in a fun environment, making it a must-visit for families and school groups looking to ignite a passion for science.
Named after the fiery General “Mad” Anthony Wayne, whom the city is also named after, Mad Anthony Brewing Company is a cornerstone of Fort Wayne’s craft beer scene. This brewery is famed for its unique selection of beers and a vibrant atmosphere. Whether you’re trying the seasonal specialties or the year-round favorites, Mad Anthony’s embodies the spirit of innovation and community in every pint.
The historic Embassy Theatre is a beautifully restored vaudeville house that is now one of Fort Wayne’s prime venues for performing arts. Hosting a range of events from Broadway shows to concerts and films, the Embassy Theatre remains a true hub for the arts in Indiana.
The Allen County Public Library houses one of the largest genealogy collections in the nation. Its expansive archives attract researchers from all over the country, making it a center for historical study. The library’s commitment to community enrichment through educational programs and resources makes it a pillar of Fort Wayne society.
Lakeside Park & Rose Garden is one of Fort Wayne’s most picturesque places. With beautifully landscaped gardens, a reflective pond, and a massive display of over 2,000 roses, it’s a real hotspot for photographers.
DeBrand Fine Chocolates is a luxurious chocolate company based in Fort Wayne, known for its high-quality confections and beautiful presentation. A tour of DeBrand offers insights into the chocolate-making process and ends with a tasting of their exquisite creations. This chocolatier is a favorite for locals and visitors looking for a sweet treat or a gourmet gift.
Have you been asking yourself, “Should I move to Minneapolis, MN?” Located along the banks of the Mississippi River, Minneapolis is a dynamic city with a unique blend of natural beauty and urban charm. Known for its picturesque lakes, thriving arts scene, and diverse neighborhoods, Minneapolis always has something exciting in store. Whether you’re drawn to the city’s music and theater scene, its abundance of outdoor activities, or its friendly community, Minneapolis has plenty to offer for those looking to put down roots in the Land of 10,000 Lakes. In this article, we’ll discuss the pros and cons of living in this city to help you decide if it’s the right place for you. Let’s jump in.
Walk Score: 71 | Bike Score: 83 | Transit Score: 55
Median Sale Price: $330,000 | Average Rent for 1-Bedroom Apartment: $1,560
Minneapolis neighborhoods | Houses for rent in Minneapolis | Apartments for rent in Minneapolis | Homes for sale in Minneapolis
Minneapolis is renowned for its vibrant arts scene. The city is home to the Walker Art Center, one of the most celebrated contemporary art museums in the U.S., and the adjacent Minneapolis Sculpture Garden, famous for the iconic “Spoonbridge and Cherry” sculpture. Additionally, the Guthrie Theater offers world-class theatrical productions, and the First Avenue nightclub has played host to countless legendary performances. These venues provide residents with endless opportunities for artistic exploration and inspiration.
The winters in Minneapolis are notoriously brutal, with temperatures often plummeting below zero degrees Fahrenheit. The city experiences heavy snowfall, which can disrupt daily life, from commuting challenges to the simple act of walking outside. The city has efficient snow removal and a well-designed network of skyways in downtown areas that help pedestrians avoid the cold. However, the winter months can still be daunting for those not accustomed to such extreme weather conditions.
One of Minneapolis’s most charming features is its abundance of lakes and parks. The city’s park system is consistently ranked as one of the best in the country, offering residents access to over 22 lakes and more than 200 parks. From sailing on Lake Harriet to biking around Lake Calhoun (also known as Bde Maka Ska), the opportunities for recreation and relaxation are virtually limitless. This access to green space is a significant advantage of living in Minneapolis.
Like many major cities, Minneapolis faces issues with traffic congestion, especially during rush hours. The city’s layout and reliance on a few major highways can lead to significant delays, particularly on I-35W and I-94, which are crucial routes for commuters. While public transportation options like the Metro Transit light rail and bus services offer alternatives, the traffic can still be a considerable inconvenience for residents.
Minneapolis boasts a robust job market, particularly in the fields of healthcare, education, and technology. The city is home to several Fortune 500 companies, including Target, UnitedHealth Group, and Best Buy, providing ample employment opportunities. Additionally, the University of Minnesota, based in Minneapolis, is a significant employer and contributes to the city’s focus on research and innovation. This economic environment offers locals a wide range of career paths and other opportunities.
Due to its lush environment and diverse plant life, Minneapolis can be a challenging place to live for people with seasonal allergies. Spring and fall are particularly difficult times for allergy sufferers as the pollen from trees, grasses, and weeds reaches peak levels. While the city’s green spaces are a significant asset, they can also contribute to discomfort for a portion of the population.
Minneapolis’s culinary scene offers an array of dining options that reflect the city’s multicultural population. From the traditional Scandinavian dishes that pay homage to the city’s Nordic roots to the thriving East African cuisine found in neighborhoods like Cedar-Riverside, there’s something for every palate. The city also boasts a growing number of farm-to-table restaurants and craft breweries, highlighting Minnesota’s rich agricultural heritage and innovative spirit.
While Minneapolis has made strides in expanding its public transportation system, options can still be limited. The Metro Transit system, consisting of buses and light rail lines, does not fully cover the metropolitan area. This can make it difficult for those without cars to access certain parts of the city and surrounding suburbs. This limited Transit Score of 55 can affect daily commutes and restrict access to certain amenities and job opportunities for those relying on public transit.
Minneapolis encourages an active lifestyle, with its extensive network of bike lanes and trails, public parks, and recreational facilities. The city has been named one of the best biking cities in America, with over 200 miles of bike trails and dedicated lanes for cyclists. Whether it’s kayaking on the Mississippi River or cross-country skiing in Theodore Wirth Park, Minneapolis provides ample opportunities to stay active and engaged with the outdoors.
Source: rent.com