realtor

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The Federal Reserve’s Federal Open Markets Committee (FOMC) held its short-term policy interest rate steady at a range of 5.25% to 5.5% for a fifth straight meeting on Wednesday.

“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,” the FOMC said in a statement. “In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.”

Earlier in March, Fed Chair Jerome Powell emphasized during his semiannual monetary policy testimony that the central bank needed “just a bit more evidence” that inflation was on the right path before implementing the first rate cut since March 2020. On multiple occasions Wednesday, Powell reiterated the central bank’s commitment to a target of 2% inflation.

Fed officials also unveiled their latest interest rate and economic projections for the first time since December. At that time, most officials agreed that inflation would fall from just above 3% at the end of 2023 to just below 2.5% at the end of 2024. Most penciled out three quarter-point rate cuts this year. 

But in the interval between the December and March meetings, inflation in both January and February came in higher than expected. Meanwhile, the unemployment rate continued to stay below 4%, companies still exhibited expanding payrolls, and workers boasted growth in real wages.

While the projections for the policy rate at the end of 2024 did not change, policymakers expect fewer rate cuts in 2025 and 2026 than they anticipated in December. In other words, interest rates are poised to stay higher for longer. 

Fed officials also expect inflation, excluding volatile food and energy prices, to end the year at 2.6% instead of 2.4%, a modestly higher level than they anticipated in December. As of Wednesday afternoon, investors were placing the probability of a cut by June at 74.4%, according to the CME Group. The Fed meets one more time before that, on April 30 and May 1.

What does a cautious approach mean for housing?

Mortgage rates have trended upward since the beginning of the year. As of March 18, mortgage rates were 30 to 40 basis points higher than on Jan. 1, 2024, according to Mike Simonsen, founder and president of Altos Research.

Experts still expect mortgage rates to come down in 2024 but not as fast as anticipated, hampering homebuyers’ prospects of improved affordability. New construction will continue to be a necessary source of housing options for buyers as the supply of existing homes remains limited. 

According to Realtor.com chief economist Danielle Hale, assumable mortgages — which allow a buyer to take over a seller’s existing mortgage terms — could become a more viable alternative. 

“A small share of the total outstanding mortgage pool is eligible for assumption, and the share of sellers who are aware of this feature and advertising it on their listings is even smaller, but in some of the markets where sellers are most likely to advertise this feature, Realtor.com research suggests that buyers can find mortgage assumption advertised on 1-3% of active homes for sale,” Hale said in a statement.

Source: housingwire.com

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Unstable borrowing conditions and a lack of affordable properties kept homeownership out of reach for many Americans in 2023. However, as the spring buying season approaches and signs that the market is recovering emerge, buyer sentiment is shifting. According to the National Association of Realtors®, national existing home sales in January 2024 were up year-over-year by 1.3%. Housing supply is also improving, with national inventory up by 3.1% year-over-year and 2% month-over-month. 

These positive changes are setting the stage for an active spring market in the US. But as competition increases, so do home prices. The national median price for a single-family home in the US increased by 5.1% year-over-year in January to $379,100. This begs the question: where can prospective homebuyers find the best deals this spring? 

To better understand where homebuyers can find pockets of affordability, Zoocasa analyzed home prices in 50 metropolitan statistical areas across the country to determine which are below the national median and where the most growth is happening. Median single-family home prices were sourced from the National Association of REALTORS® and are from Q4 2023, except the national median home price which is from January 2024. 

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It’s usually said that the further outside of an urban center you go, the more affordable the home price. But of the 33 metropolitan statistical areas with a median home price below the national median, 15 have populations above 2 million, and five have populations above 5 million. The largest urban center with a median home price below the national median is Chicago, IL with a median home price of $343,300 in Q4 of 2023. Despite the city experiencing year-over-year price growth of 6.2%, Chicago’s median home price is still $35,800 below the national median. 

Of the 50 markets we analyzed, Cleveland, OH came out on top for affordability. Cleveland’s median home price of $190,700 is an impressive $188,400 below the national median and is one of the few areas on our list where the median home price dropped from last year. Other markets where the median home price fell from last year include Myrtle Beach, SC, Houston, TX, San Antonio, TX, and Memphis, TN. Alabama’s capital, Montgomery, was the only other market on our list besides Cleveland with a median home price below $200,000. Homebuyers here can snag a home for approximately $185,700 below the national median. 

It’s worth noting that five out of the six markets that experienced year-over-year price growth of more than 9% have home prices below the national median. These markets include Rochester, NY, Hartford, CT, New Haven, CT, Oklahoma City, OK, and Cincinnati, OH. This means that homebuyers of all price ranges, including those purchasing lower-priced homes, can still expect to build a significant amount of equity. 

Markets that have experienced significant year-over-year price growth also present good investment opportunities. For instance, single-family homes in Philadelphia, PA have experienced year-over-year price growth of 7.2% and are still $20,100 below the national median price, making this sought-after city a good option for first-time investors. Kansas City, MO is an emerging market that would make a great first-time investment location. The city garnered a lot of media attention last year thanks to the city’s football team and frequent Taylor Swift visits, resulting in the median home price rising by 5.9% year-over-year. Despite its growing popularity, the median home price in Kansas City remains one of the lowest on our list at $315,800. 

Homebuyers with their hearts set on a particular destination, especially one of the largest and most sought-after cities in the US, would benefit from considering smaller markets relatively close to their dream location. While the Big Apple might be out of reach for the average buyer, with a median home price of $659,200, New York’s second and third-largest cities still maintain affordable prices. Buffalo and Rochester have median home prices of $243,500 and $230,500 respectively. This is nearly $150,000 less than the national median, compared to New York City, where the median home price is more than $280,000 above the national median. 

Though San Francisco, CA, and Los Angeles, CA have notoriously high home prices, at $1,251,000 and $884,400 respectively, California homebuyers still have affordable options. At just $26,600 above the national median, Fresno’s median home price is one of the more affordable options in California. But for savvy buyers looking for a deal in California, Bakersfield presents the best option with a median home price of $11,800 below the national median. 

In Florida, motivated buyers on the hunt for affordable prices will have to look outside of the vibrant Miami market, which has a median home price more than $200,000 above the national median. Tampa’s median home price exceeds the national median by just $30,900, while Daytona Beach and Tallahassee offer more affordable housing, with median prices $16,700 and $57,100 below the national median, respectively.

Planning to enter one of these markets this spring? It’s important to speak with a local realtor who is familiar with your local real estate market. Give us a call today to discuss your home-buying plans. 

Ready to join the spring market?

Our experienced agents can help!

Source: zoocasa.com

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Washington, DC
CNN
 — 

Amid a housing shortage and an affordability crisis, US homebuilding heated up in February as builders anticipate demand for new homes to stay strong.

One sure way to improve affordability is to increase the availability of apartments to rent and homes to buy. In areas of the country where there has been robust homebuilding, rents and home price increases have been more moderate.

The pace of new housing starts soared by 10.7% in February from the month before, after slumping in January, according to data released Thursday by the Census Bureau and the Department of Housing and Urban Development.

Starts rose to a seasonally adjusted annual rate of 1.521 million units last month, beating analysts’ estimates of 1.425 million. The pace rebounded from January’s revised pace of 1.374 million and was 5.9% above the 1.436 million pace a year ago.

Meanwhile, the pace of new building permits was up 1.9% from January, which was up 2.4% from a year ago.

Homebuyers look to new construction for much-needed inventory

While the number of existing homes on the market remains historically low, new construction has provided a critical alternative for homebuyers.

Mortgage applications for a newly constructed home were up a whopping 15.7% in February from a year ago, according to the Mortgage Bankers Association; and up by 1% from January. The average loan size jumped to its highest level since last March at almost $406,000, but it was still below the record high of more than $436,000 in April 2022.

“It is possible that we could see more wiggle room on pricing in the coming months, as the inventory of existing homes begins to expand,” said Lisa Sturtevant, chief economist at Bright Multiple Listing Service, in a statement.

Prospective homebuyers who are looking at new construction are still finding some builders offering concessions, upgrades, or favorable financing terms, she said.

But, according to the NAHB, fewer builders are offering price cuts.

Homebuilders are preparing for when rates are lower

The much lower mortgage rates that many homebuyers expected have yet to materialize, but builders want to be ready for when that does happen.

Mortgage rates have come down from their highest levels of last year — 7.79% in October — and are now about a full percentage point below that, at 6.74%.

“Lower mortgage rates are likely to bring buyers to the market in larger numbers, and builders are ramping up supply to meet this demand,” said Kelly Mangold of RCLCO Real Estate Consulting, in a statement.

While existing home inventory has ticked up lately, as is typical this time of year, there is still a historically low number of homes on the market as owners see the gap between their ultra-low rate and prevailing rates as still too wide.

That creates an opportunity for homebuilders who can provide inventory.

“Homebuilders continue to be bullish about the spring market as homeowners are still reluctant to list their homes for sale and new homes account for an outsized share of the active inventory,” said Sturtevant.

Homebuilder confidence improved this month even as mortgage rates climbed, according to a survey from the National Association of Home Builders released Monday.

The lack of existing inventory that continues to push buyers toward new home construction led homebuilder sentiment index to the highest level since July and marked the fourth consecutive monthly gain for the index.

Addressing the housing shortage

Housing affordability amid high inflation and elevated interest rates remains a hot-button issue for the White House as well as the Federal Reserve.

President Joe Biden is set to address the housing shortage Tuesday in a speech from Las Vegas, where the cost of rent has increased 30% from before the pandemic and the cost to buy a home has risen by over 40% since then.

Biden is expected to call on Congress to pass legislation that he says could result in the building and renovation of more than 2 million homes to close the housing supply gap and lower housing costs.

Housing experts agree there are not enough homes available to rent or own compared to the demand. But the size of that gap ranges from a shortfall of 1.5 million units (according to National Association of Home Builders) to 5.5 million units (according to the National Association of Realtors) or as many as 7 million (according to the National Low Income Housing Coalition and Realtor.com), depending on who is calculating it and what assumptions about housing are being made.

Source: cnn.com

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LOS ANGELES — More homeowners eager to sell their home are lowering their initial asking price in a bid to entice prospective buyers as the spring homebuying season gets going.

Some 14.6% of U.S. homes listed for sale last month had their price lowered, according to Realtor.com. That’s up from 13.2% a year earlier, the first annual increase since May. In January, the percentage of homes on the market with price reductions was 14.7%.

The share of home listings that have had their price lowered is running slightly higher than the monthly average on data going back to January 2017.

That trend bodes well for prospective homebuyers navigating a housing market that remains unaffordable for many Americans. A chronically low supply of homes for sale has kept pushing home prices higher overall even as U.S. home sales slumped the past two years.

“Sellers are cutting prices, but it just means we’re seeing smaller price gains than we would otherwise have seen,” said Danielle Hale, chief economist at Realtor.com.

The pickup in the share of home listings with price cuts is a sign the housing market is shifting back toward a more balanced dynamic between buyers and sellers. Rock-bottom mortgage rates in the first two years of the pandemic armed homebuyers with more purchasing power, which fueled bidding wars, driving the median sale price for previously occupied U.S. homes 42% higher from 2019 through 2022.

“Essentially, the price reductions suggest far more normalcy in the housing market than we’ve seen over the last couple of years,” Hale said.

The share of properties that had their listing price lowered peaked in October 2018 at 21.7%. It got nearly as high as that — 21.5% — in October 2022.

Last year, the percentage of home listings that had their asking price lowered jumped to 18.9% in October, as the average rate on a 30-year mortgage surged to a 23-year high of 7.79%, according to Freddie Mac.

Mortgage rates eased in December amid expectations that inflation has cooled enough for the Federal Reserve begin cutting its key short term rate as soon as this spring. Those expectations were dampened following stronger-than-expected reports on inflation and the economy this year, which led to a rise in mortgage rates through most of February.

That’s put pressure on sellers to scale back their asking price to “meet buyers where they are,” Hale said.

That pressure could ease if, as many economists expect, mortgage rates decline this year.

Source: triblive.com

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WATERTOWN, New York (WWNY) – It was an issue last year, and it’s an issue now. In 2023 mortgage rates were high – 8 percent or more at one time.

It could be a reason why the total number of homes sold in Jefferson County was down last year by nearly 250 compared to 2022, and down 500 from 2021.

In 2023, 1,126 homes were sold; 1,369 in 2022, and 1,626 in 2021.

Current mortgage rates on a 30-year fixed loan are around 7 percent. Last fall it was around 8 percent- some of the highest rates since 2006. Lance Evans with the Jefferson-Lewis Board of Realtors says it can mean fewer people are looking to sell.

“Less choice means first of all the prices are higher. Less choice also means that it’s harder to get a home,” he said.

The COVID pandemic was rough on the housing market but according to Evans, things are steadily improving. In 2023, houses spent less time on the market, and significantly fewer homes were for sale compared to 2022.

“Things are getting a little bit more healthy. It’s still a seller’s market, not a buyer’s market. There’s more buyers than there are sellers,” he said.

One thing that isn’t improving for buyers is the average price of a home. Since 2020, property costs have jumped significantly each year. In 2023, the average cost of a single-family home was nearly $200,000 in our area. As for mortgage rates, Evans says there’s a chance they could go down this year.

“The Fed (Federal Reserve System) has signaled that they may be dropping them later this year. I don’t know how much though since I’m not with the Fed and my crystal ball is cloudy,” he said.

In Thursday night’s State of the Union Address, President Biden proposed a mortgage relief credit that if passed could help first-time home buyers contend with interest rates.

Copyright 2024 WWNY. All rights reserved.

Source: wwnytv.com

Mortgage rates eased slightly this week, enough to reheat the homebuying momentum as the market heads into a traditionally busy season of the year, according to Freddie Mac. 

The average 30-year fixed-rate mortgage was 6.88% for the week ending March 7, according to Freddie Mac’s latest Primary Mortgage Market Survey. That’s a drop from the previous week when it averaged 6.94%. A year ago, the 30-year fixed-rate mortgage averaged 6.73%. 

The average rate for a 15-year mortgage was 6.22%, down from 6.26% last week and up from 5.95% last year.

The slight drop in borrowing costs led to a nearly 10% jump in mortgage applications, indicating that buyer interest is strong as the market heads into the spring homebuying season, according to the latest Mortgage Bankers Association Weekly Applications survey.

 “Evidence that purchase demand remains sensitive to interest rate changes was on display this week, as applications rose for the first time in six weeks in response to lower rates,” Freddie Mac Chief Economist Sam Khater said. “Mortgage rates continue to be one of the biggest hurdles for potential homebuyers looking to enter the market. It’s important to remember that rates can vary widely between mortgage lenders, so shopping around is essential.”

If you are looking to take advantage of the current mortgage rates by refinancing your mortgage loan or are ready to shop for the best rate on a new mortgage, consider visiting an online marketplace like Credible to compare rates and get preapproved with multiple lenders at once.

SOCIAL SECURITY: COLA INCREASING BUT MEDICARE COSTS RISING TOO IN 2024

Market waits for rates to drop 

While the Federal Reserve has said that the plan to reverse interest rate hikes is still in the works, the timeline for when those cuts will begin has been unclear. A reversal in interest rates is crucial in creating more affordability for buyers also dealing with record home price gains. 

However, housing supply is improving, according to a recent Redfin report. New listings rose 13% from a year earlier nationwide during the four weeks ending March 3, the most significant increase in nearly three years. And home prices have also lost some momentum. Roughly 5.5% of home sellers dropped their asking price, the highest share of any February since at least 2015, while the share of affordable homes on the market has increased, according to Realtor.com.

“Mortgage rates remain stubbornly high, and since there is no indication that the Fed will set interest rates meaningfully lower in the short term, it is unlikely that mortgage rates will fall much this year,” Voxtur Analytics Senior Vice President David Sober said in a statement. “If a potential homebuyer is waiting for a lower rate, with house prices still rising overall, they probably won’t get the deal they want anytime soon.”

If you’re looking to become a homeowner, you could still find the best mortgage rates by shopping around. Visit Credible to compare your options without affecting your credit score.

AMERICANS LIVING PAYCHECK TO PAYCHECK OWN 60% OF CREDIT CARD DEBT: SURVEY

Buyers should shop for the best rate

Despite the continued increase in rates, homebuyers could save on borrowing costs by shopping for the best rate with the right lender.

When mortgage rates are high, borrowers can save more by shopping around. Mortgage rate variability more than doubled in 2022 when rates exceeded 7%, according to Freddie Mac research. Borrowers who shopped for five different rate quotes could have saved more than $6,000 over the life of the loan, assuming the loan remains active for at least five years.

“The increase in rate dispersion means that consumers with similar borrower profiles are being offered a wide range of mortgage rates,” Genaro Villa, a macro and housing economics professional for Freddie Mac, said in the research brief. “In the context of today’s rate environment, although mortgage rates are averaging around 6%, many consumers that fit the same borrower profile could have received a better deal on one day and locked in a 5.5% rate, and on another day locked in a rate closer to 6.5%.”

If you are ready to shop for a mortgage loan or are looking to refinance an existing one, you can use the Credible marketplace to compare rates and lenders and get a mortgage preapproval letter in minutes.

SECURE 2.0: OPTIONAL PROVISIONS KICK IN TO HELP RETIREMENT SAVERS WITH EMERGENCIES AND STUDENT LOAN DEBT

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

Source: foxbusiness.com

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© David Gyung – iStock/Getty Images Plus

Recent swings in mortgage rates are helping to drag down contract signings, which fell 5% in January, the National Association of REALTORS® reported this week. Pending home sales, a forward-looking indicator of housing activity based on contract signings, were down 8.8% compared to a year earlier.

“The job market is solid, and the country’s total wealth reached a record high due to stock market and home price gains,” says NAR Chief Economist Lawrence Yun. “This combination of economic conditions is favorable for home buying. However, consumers are showing extra sensitivity to changes in mortgage rates in the current cycle, and that’s impacting home sales.”

In recent weeks, mortgage rates have started creeping back toward 7%. Freddie Mac reports the 30-year fixed-rate mortgage averaged 6.94% this week, marking a two-month high. “While this is still below the rates seen in the fall of 2023, it impacts home buyers’ excitement about entering a spring market,” says NAR Deputy Chief Economist Jessica Lautz. The monthly mortgage payment for a $400,000 home, assuming a 20% down payment, now translates to about $2,116, Lautz adds. “For first-time buyers who are the most price-sensitive, the rise in mortgage rates poses a cause for concern, as they may be priced out of the market.”

Indeed, “the recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for home buying,” adds Sam Khater, Freddie Mac’s chief economist. “While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential home buyers on the sidelines.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 29:

  • 30-year fixed-rate mortgages: averaged 6.94%, rising from last week’s 6.9% average. A year ago, 30-year rates averaged 6.65%.
  • 15-year fixed-rate mortgages: averaged 6.26%, dropping slightly from last week’s 6.29% average. Last year at this time, 15-year rates averaged 5.89%.

Source: nar.realtor

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TPO, Warehouse, Appraisal Mgt., Homeowner Engagement Tools; Credit Changes

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TPO, Warehouse, Appraisal Mgt., Homeowner Engagement Tools; Credit Changes

By:
Rob Chrisman

Fri, Mar 1 2024, 11:09 AM

As I watch it snow here in the Sierra, hey, if you’re going to watch one video this week, watch this 15-second classic (with sound) on how our banking system works. You’ll watch it at least twice, and let your kids figure it out. Since its all-time high of 30,456 in 1921, the bank population in the United States had declined to only 4,377 at the end of 2020, a decline of about 86 percent. Thousands of residential lenders hope they’re not involved in the same trend. I mention this because, speaking of numerical trends, the United States is producing more oil than any country has ever produced in the history of the world: 13 million barrels per day. It’s been economically punishing for the countries in OPEC+, which has seen its global market share drop to a new low of 48 percent. This is an interesting issue when it comes to inflation, which helps drive mortgage rates, and will be a very interesting issue in the next eight months when it is expected that two octogenarians will be vying for the top job. (Found here, this week’s podcast is brought to you by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products – nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics – unite the people, systems, and stages of the mortgage process. Hear an interview with Nerdwallet’s Kate Wood on housing market supply and advice for potential homebuyers.)

Lender and Broker Services, Products, and Software

To access the largest subset of home buyers in the market, lenders are redefining their go to market strategy. Milestones’ homeowner engagement solution goes well beyond a “What’s my home worth?” assessment. It enables lenders to proactively guide consumers through the entire homeownership journey with weekly touchpoints that are relevant and specific to their home. With essential resources for home services, home improvements, home document storage, and a homeowner dashboard to monitor and track their activity in one place, this platform is the one-stop shop for all things home. What sets them apart is its fully white-labeled capabilities that provides a seamless consumer experience that keeps YOUR lending products and partners top of mind. Adopt the ultimate homeowner engagement solution to connect more meaningfully with your prospects and borrowers and uncover new opportunities to boost your revenue. Book a meeting with sales today.

“Innovation-Powered Precision, Time-Tested Excellence! With a foundation built on 43 years of experience, PCV Murcor brings a deep understanding of our clients’ goals that complements appraisal modernization. Over our long history, we have honed our processes to provide reliable and unparalleled appraisal management services, setting the standard for excellence in the industry. Our use of state-of-the-art AI technology ensures precision and efficiency in every aspect of our service. AI’s ability to enhance efficiency, accuracy, and flexibility is reshaping the way properties are evaluated with distinct advantages. To learn more about our future-ready solutions for today’s appraisal management, visit here.”

“PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE: HTH), focuses on relationship-driven business with long-term success, by-the-way, have you heard about our BTW Services? We are pleased to offer all customers our Broker-Dealer, Treasury Management and Warehouse Lending (BTW) services. Our Broker-Dealers can help customers hedge their origination pipelines by buying and selling TBAs, specified pools and whole loan trading. Our Treasury Management team helps customers with escrow and cash management. Finally, the Warehouse Lending team provides customers with confidence to meet their loan funding needs. If you are interested in learning more about our BTW Services please contact Deric Barnett or Justin Tannen.”

TPO, Broker, and Correspondent Product News

“It’s been a busy first quarter for the Newrez Correspondent team! Delegated pilot programs for both 2nd Mortgages & Non-QM have been launched with more exciting news on the way. Enhancements to come include HomeReady® & Home Possible® $2500 grant products; FHLMC’s GreenCHOICE; FHA HUD 184/Heritage; Co-Issue offering, along with improvements to our Non-QM Smart Series programs, Enote expansion and more. Soon, our sales team will present our top 2023 clients their Premier Partner Plaques (PPP). This PPP award recognizes the partnership and is awarded to our lenders who finished at the top for loans funded in 2023. There are so many reasons to be aligned with a top tier partner, and Newrez Correspondent is that partner! For those not signed up with Newrez and looking to take advantage of these enhancements, or existing partners who want to become Premier, contact our sales team to learn more.”

Rocket Pro TPO has announced an update to its offerings, including its Credit Upgrade program. This initiative, previously exclusive, is now available to all partners. It provides a no-cost, rapid rescore service for clients with credit scores between 570 and 779, aiming to help them qualify for better loan products and rates. Additionally, Rocket Pro TPO offers a Home Equity Loan product that allows clients to protect their low mortgage rates while tapping into their home’s equity at a competitive rate. This option provides a fixed-rate, lump-sum payment, offering a stable alternative to variable-rate loans. For those interested in learning more about Rocket Pro TPO’s cost-saving products, the replay of their latest IGNITE Live seminar is available on their YouTube channel: IGNITE Live Replay. For more information on Broker or Non-Delegated Correspondent partnerships, contact Rocket Pro TPO to learn more.

Angel Oak Mortgage Solution is now offering Bank Statement Loans tailored specifically for self-employed individuals who have been in business for 1-year.

Reach more clients with LoanStream’s Non-QM Programs with loan amounts up to $4 Million. LoanStream NaNQ / Non-QM Programs are proprietary programs specifically created to fulfill mortgage program options for LoanStream brokers with non-prime programs.

The 5 Cs of Credit

A good trivia question for underwriters, or loan originators, is, “What are the 5 C’s?” The answer is character, capacity, capital, collateral, and conditions. Those are from a simpler time, but the fundamentals still apply despite all the hubbub about credit costs, scores, monopolies, hard pulls versus soft pulls, and… tri-merge versus bi-merge. I bring this up because it appears that the “new” scoring and bi-merge will be done at the same time, at the end of 2025. So, the industry has some to adjust and accommodate.

“Dear Stakeholders,

“Thank you for your continued engagement with FHFA’s Credit Score Initiative. As many of you likely saw, FHFA just announced a series of updates related to the implementation of the new credit score requirements for single-family loans delivered to Fannie Mae and Freddie Mac (the Enterprises). We are also pleased to announce the schedule for upcoming stakeholder forums to be hosted by FHFA, which is outlined below.

“Following valuable and thoughtful feedback gathered from the sessions held in late 2023, FHFA is aligning the implementation date for the bi-merge credit reporting option with the transition from the use of Classic FICO. This aligned transition is expected to occur in the fourth quarter of 2025. We expect this update will reduce cost and complexity for market participants.

“To better support the transition, the Enterprises are accelerating the publication of historical data on the VantageScore 4.0 model. This publication, originally targeted for the first quarter of 2025, is now expected early in the third quarter of 2024. FHFA and the Enterprises continue to work towards providing similar data to support the transition to the FICO 10T model.

“We would like to thank all those who participated in the stakeholder forums for sharing their perspectives on the sequencing of project milestones, as well as the expected uses of the historical data to support the new models. Your input helped inform the latest updates to the Credit Score Initiative.

“FHFA will be hosting the next series of virtual stakeholder forums in the coming weeks. The schedule is planned as follows: Bi-Merge Implementation Considerations (Tuesday, March 12, 3:00-4:00pm Eastern), Bi-Merge Implementation Considerations (cont’d) (Tuesday, March 26, 3:00-4:00pm Eastern), Transition Period Loan Delivery Considerations (Tuesday, April 9, 3:00-4:00pm Eastern), and Transition Period Loan Delivery Considerations (cont’d) (Tuesday, April 23, 3:00-4:00pm Eastern).

“As a reminder, these virtual stakeholder forums are open to the public, but they are not intended for media purposes. FHFA will provide agendas, materials, and links to access the sessions as they approach. Thank you again for your continued engagement. If you have further questions or thoughts, please contact us at [email protected].”

After 2023’s jarring price hikes, the credit bureaus and FICO are raising their credit reporting costs once again, passing this on to credit reporting agencies (CRAs). This latest price increase affects both hard and soft pull credit reports. In response, CRAs everywhere have updated their pricing options, allowing the customization of lender’s prequalification options to suit budgets.

And compliance departments noted that the FTC, which has authority to enforce the Equal Credit Opportunity Act (ECOA) against most types of non-depository financial services providers, issued a report in February describing its enforcement actions and related activity under ECOA during 2023: Annual Report on Its ECOA Enforcement and Policy Development Activity.

Capital Markets

The Fed has been preaching patience from markets when it comes to enacting rate cuts, a sentiment that was further bolstered yesterday after the central bank’s preferred price gauge rose in January at the fastest pace in almost a year (2.4 percent). Inflation rose 0.4 percent month-over-month compared to a downwardly revised 0.1 percent increase in December. The core rate increased 2.8 percent year-over-year. Personal Incomes rose 1.0 percent in January, which was also much higher than expected, driven primarily by growth in the annual cost of living increase in social security. Fed policymakers took the data in stride, repeating that easing can begin in the summer and there is room to be patient.

Yesterday also saw the release of a weaker-than-expected Chicago PMI for February and a disappointing Pending Home Sales report which came in down 4.9 percent for January. Initial jobless claims for the week ending February 24 increased to 215k, which is still a relatively low number for this series. Continuing jobless claims for the week ending February 17 increased by 45,000 to 1.905 million, which is the highest level for that series since November. It has become more challenging to find a new job right away, which indicates that the labor market is not running as tight as it once was. The four-week moving average for continuing claims of 1,879,750 is the highest since December 11, 2021

Today’s economic calendar contains no “first tier” scheduled market-moving news but has no fewer than seven Fed speakers scheduled. Go ahead and add in the final February S&P Global manufacturing PMI, ISM manufacturing PMI for February, January construction spending, and Michigan sentiment for February. (Unemployment data, normally released on the first Friday of the month, is next Friday.) After the 10-year yield rose 28 basis points in February, we begin March with the 10-year yielding 4.23 after closing yesterday at 4.27 percent, Agency MBS prices better about .125, and the 2-year at 4.59.

Jobs

Mark Pasternak appointed as the newest SecurityNational Mortgage Company VP to Spearhead Operational Excellence. In a significant move to bolster its leadership team, Security National Mortgage Company has announced the appointment of Mark Pasternak as Vice President of Mortgage Operations. Pasternak joins the company with over three decades of industry experience, including his most recent tenure serving as EVP of Operations at Academy Mortgage. His leadership background in both sales and operational management is sure to provide an operational edge for SecurityNational Mortgage. Andrew Quist, President of SecurityNational Mortgage Company, stated: “Mark is joining us with a wealth of experience and his innovative nature will be highly valuable to our operations team. Even in this challenging mortgage rate environment, SecurityNational is still dedicated to recruiting elite industry talent like Mark that align with our growth focused business objectives. We’re excited to see the impact Mark will have in our operations.” The addition of Mark Pasternak to the SecurityNational team underscores the company’s commitment to recruiting top talent to lead its strategic initiatives. With Pasternak at the helm of operations, SecurityNational is poised to enhance its operational capabilities and achieve new milestones in service and efficiency.

In the Northwest and California, Banner Bank is searching for Mortgage Loan Officers looking to create lasting Realtor and builder relationships at a bank focused on the market today. Banner has opportunities for lenders looking for local decision making with FHA, VA, USDA, state bond and true Portfolio lending opportunities along with servicing retained Fannie and Freddie loans to assist in client retention. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. Banner is the right fit for an established team, or the individual looking to grow their business and take the next step in their career. Please send resumes to Aaron Miller.

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Source: mortgagenewsdaily.com

Apache is functioning normally

The numbers: Pending home sales fell in January as rising mortgage rates pushed buyers out of the housing market.

Pending home sales fell 4.9% in January from the previous month, according to the monthly index released Thursday by the National Association of Realtors (NAR).

Pending home sales reflect transactions where the contract has been signed for an existing-home sale, but the sale has not yet closed. Economists view it as an indicator of the direction of existing-home sales in subsequent months.

The drop in pending home sales was the largest since August 2023, when they fell 5%.

The sales pace fell short of expectations on Wall Street. Economists were expecting pending home sales to increase by 1.5% in January.

Transactions were down 8.8% from last year.

Big picture: Mortgage rates began their ascent to 7% towards the end of January, when the market saw that the Federal Reserve would not be cutting interest rates in March.

Even slight increases in rates can affect how much some buyers can afford to buy a home. At 7%, the monthly payment on a $400,000 home would be roughly $2,700, and buyers would potentially need to earn $108,440 a year to afford that comfortably. 

Looking ahead, applications for purchase mortgages are trending down, as mortgage rates remain over 7% at the end of February. That indicates that sales activity may be muted in the coming months.

What the Realtors said: “The job market is solid, and the country’s total wealth reached a record high due to stock market and home price gains,” Lawrence Yun, chief economist at the NAR, said in a statement.

While “this combination of economic conditions is favorable for home buying,” he added, “consumers are showing extra sensitivity to changes in mortgage rates in the current cycle, and that’s impacting home sales.”

What they’re saying: “Pending home sales, or contract signings, measure the first formal step in the home sale transaction, namely, the point when a buyer and seller have agreed on the price and terms,” Hannah Jones, senior economic research analyst at Realtor.com, said in a statement. 

“Pending home sales tend to lead existing home sales by roughly one-to-two months and are a good indicator of market conditions,” she added. And “the recent uptick in rates could mean slower seasonally adjusted sales as the spring homebuying season kicks off.”

Source: marketwatch.com