Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Mortgage rates ticked up last week after weeks of declines while applications for home loans dropped in a sign that the housing market continues to struggle despite some recent signs of optimism.
The 30-year fixed rate inched closer to 7 percent for the week ending December 29, according to the Mortgage Bankers Association (MBA). Meanwhile, mortgage applications tumbled by more than 9 percent from two weeks earlier, lenders said.
“Markets continued to digest the impact of slowing inflation and potential rate cuts from the Federal Reserve, helping mortgage rates to stay at levels close to the lowest since mid-2023,” Joel Kan, MBA’s deputy chief economist, said in a statement shared with Newsweek on Wednesday.
The 30-year fixed mortgage ended 2023 at 6.76 percent, more than a percentage point lower than the peak of nearly 8 percent in October, he said.
“The recent decline in rates has given the housing market some cause for optimism going into 2024, but purchase applications have not yet picked up in response, with the overall level of purchase activity 12 percent lower than a year ago,” Kan said.
Economists say that activity in the housing market will ramp up if prices decline, which at the moment are elevated partly due to low supply. The existing homes market is still in the doldrums as sellers are reluctant to give up their low rates for new home loans that could cost them close to 7 percent in interest.
“The housing market has been hampered by a limited supply of homes for sale, but the recent strength in new residential construction will continue to help ease inventory shortages in the months in come,” Kan said.
Recent data shows that private residential construction moved up, according to the U.S. Census Bureau, to nearly $900 billion in November—a jump of more than a percent from the previous month, helped by spending on single-family home building.
“November was the first month in over a year when single-family construction spending rose compared to the year prior,” Yelena Maleyev, KPMG’s senior economist, said in a note shared with Newsweek on Tuesday. “Builders have become more positive about the single-family market as mortgage rates have come down from recent peaks and revived buyers’ interests.”
In a sign that rates may be entering some level of uncertainty, as the market looks to see how many rate cuts the Fed will institute in 2024, the average contract interest rate for 15-year fixed-rate mortgages decreased to 6.26 percent from 6.41 percent in the week ending December 29.
Fed policymakers held rates at 5.25 to 5.5 percent last month for the third time in a row and have suggested that they may cut rates to a possible 4.6 percent in 2024. It’s unclear yet when such cuts could come.
But declining mortgage rates could give a boost to the housing market, with builders feeling optimistic in the new year.
“Construction activity remains robust as strong demand for housing and infrastructure remain a tailwind for builders,” Maleyev said, noting that elevated rates could be a challenge for the sector in 2024. “Spending is expected to end the year on a high, with lower mortgage rates helping revive activity in the housing market.”
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Source: newsweek.com
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Thu, Dec 28 2023, 10:54 AM
If someone reports their company for tax evasion in the U.S., he or she will receive 30 percent of the amount collected. Have you ever loaned someone money and had them not pay you back? Here’s one thing that you can do to them (IRS’ 1099-C). While we’re on the general topic, despite strong retirement savings, Fidelity Investments’ Q3 2023 analysis reveals a surge in hardship withdrawals and 401(k) loans, addressing short-term financial challenges. By the numbers: 3 percent took hardship withdrawals (up from 1.8 percent in 2022). 8 percent tapped into 401(k) loans (compared to 2.4 percent last year). The silver lining? Retirement balances are on the rise, and savings rates remain steadfast. For those planning retirement, consider suggesting reverse mortgages as a game-changer. They offer an alternative, allowing access to funds without swiftly depleting hard-earned savings. If you haven’t set up reverse division at your shop, well, 10,000 people a day turn 62. Today’s podcast can be found here, and this week’s is sponsored by Gallus Insights. Mortgage KPIs, automated at your fingertips. Gallus allows you to go from data to actionable insights. If you can use Google, you can use Gallus. Hear an Interview with attorney Brian Levy on the NAR lawsuits and the implications for housing finance moving forward.
Broker and Lender Software, Products, and Programs
Are you a compliance nerd? A group of mortgage industry veterans has launched a software company for loan servicing that is getting a lot of attention. Keep your eyes and ears open for MESH software (Mortgage Enterprise Servicing Hub), which is their brand name for a series of software products aimed at loan servicers. The first product runs hundreds of compliance rules on loan portfolios daily, so servicers have a daily review of all loans against everything the CFPB, Agencies and States can throw at them. Look up “MESH Auditor”.
It’s time to start planning for the year ahead! Join the Computershare Loan Services (CLS) team from January 22 – 24 in The Big Easy for MBA’s Independent Mortgage Bankers Conference. With CLS’ originations fulfillment, co-issue MSR acquisition, subservicing, and mortgage cooperative, IMBs can streamline their operations, minimize expenses, and maximize profits. Contact the CLS team today to schedule a meeting in New Orleans.
Ring in the new year with a kinder outlook by joining us for the highly anticipated “Kind Mindset” event presented by Kind Lending. Taking place on January 16th, 2024, at The Buckhead Club in Atlanta, GA, this immersive event is designed to empower attendees with valuable insights on growth, success, and mindset. With an impressive lineup of speakers, including Kind Lending’s CEO/Founder, Glenn Stearns, and special guest Captain Charlie Plumb, 6-year Prisoner of War and former Fighter Pilot, this event promises to be a transformative and inspirational experience. Get ready to cultivate a “Kind Mindset” and embark on a journey of transformation and success. Register today.
Aging, Down Payments, and Housing Demographics
Do you think getting old is hard? The U.S. Census Bureau released a report showing that about 4 million U.S. households with an adult age 65 or older had difficulty living in or using some features of their home. About 50 million, or 40 percent, of U.S. homes had what were considered to be the most basic, aging-ready features: a step-free entryway into the home and a bedroom and full bathroom on the first floor. About 4 million or 11 percent of older households reported difficulty living in or using their home. The share increased to nearly 25 percent among households with a resident age 85 or older. Over half (about 57 percent) of older households reported their home met their accessibility needs very well, but only 6 percent of older households had plans to renovate their home in the near future to improve accessibility.
In general, Zillow expects home prices to remain roughly flat in 2024, with only a 0.2% increase in its housing market index. Existing home sales are expected to fall further to 3.74 million. Zillow does mention that this forecast does not take into account the latest forecast from the Fed, and the expectation for big rate cuts in 2024.
Falling mortgage rates have put some spring in the step of the homebuilders, according to the latest NAHB / Wells Fargo Housing Market Index. As one would expect, with mortgage rates down roughly 50 basis points over the past month or two, builders are reporting an uptick in traffic as some prospective buyers who previously felt priced out of the market are taking a second look. With the nation facing a considerable housing shortage, boosting new home production is the best way to ease the affordability crisis, expand housing inventory and lower inflation. But builders have lagged production for so many years…
Non-builder loan officers find the builder world a tough nut to crack. Many, if not most, big builders are dealing with the mortgage rate issue by subsidizing buy-downs. Builders generally build free upgrades into their models, and these funds are being used to buy down the rate. The builder gets full price for the house, loses a few points on the mortgage, which might have instead gone to upgraded countertops or something else.
Even if one can get approved for a loan, buying can still be prohibitively expensive. Receiving help from family and friends for that crucial down payment can be a major turning point for many consumers. In fact, nearly 2 in 5 homeowners (39 percent) have received down payment assistance, according to LendingTree’s Mortgage Down Payment Help Survey, of nearly 2,000 U.S. consumers. 78 percent of Gen Z homeowners reported some financial support for a down payment, mostly from their parents. 54 percent of millennials have received down payment help, followed by 33 percent of Gen Xers.
Almost a third (31 percent) of Americans think putting down 20 percent for a down payment is obligatory. However, 59 percent of current homeowners say their down payments were less than 20 percent of the home’s purchase price, and just 29 percent put down 20 percent or more. One in 10 Americans never took out a mortgage, while 15 percent had a mortgage but have since paid it off. Baby boomers are the most likely to have paid off their mortgages, at 29 percent.
As anyone shopping for a home can tell you, it’s slim pickings out there. For many years we have been seeing the biggest squeeze in the starter home category. It appears that for years part of the problem is a lack of confidence to move up to the next category. People in starter homes are staying put, which is keeping homes off the market.
Capital Markets
It was another slow news day yesterday without any meaningful economic data or news to move sentiment. However, investors are laden with optimism as a soft-landing for the economy comes into view and seem to be throwing caution to the wind with over 150 basis points of Fed Funds easing fully priced in for next year. In accordance with that, benchmark bonds rallied to fresh highs yesterday after the U.S. Treasury sold $58 billion in 5-year notes to excellent demand. The strong auction exposed some short positioning, and it invited additional late buying. That followed Tuesday’s $57 billion 2-year Treasury auction that attracted a record number of indirect buyers to snap up high yields before the Fed’s anticipated rate cuts, which are fully priced in to begin at the March meeting in just over 80 days. Yields on benchmark treasuries have dropped to levels not seen since the summer.
Today has a fuller calendar than the past two sessions in regard to economic news. We are under way with initial jobless claims (+12k to 218k, a little higher than expected), continuing claims, advanced economic indicators for November (goods trade balance, retail inventories, and wholesale inventories), none of which moved rates. Later today brings the NAR’s Pending Home Sales Index for November, Freddie Mac’s Primary Mortgage Market Survey, and another large amount of supply from the Treasury, headlined by $40 billion 7-year notes. We begin the day with Agency MBS prices worse a few ticks (32nds), the 10-year yielding 3.81 after closing yesterday at 3.79 percent, and the 2-year is down to 4.25.
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Source: mortgagenewsdaily.com
Austin has a reputation as a global live music capital, a hipster haven and an outdoor enthusiast’s dream come true. Best of all? The cost of living in Austin is still more affordable than most bustling metropolises.
Even though locals complain about skyrocketing prices, the overall cost of living in the Lone Star State capital is just a fraction higher — only 1.2 percent — compared to other cities.
The most expensive part of living in Austin is housing, but even that’s offset by savings on gas prices, transportation, utilities and food. It would be negligent not to mention the quality of life — which is impossible to put a price tag on — that Austinites will proudly tell you is one of the highest around.
We’ll deep dive into the data and highlight the cost of living and rent in Austin, but first, here’s a snapshot of year-over-year changes in the cost of living in Austin.
As you can see, in most categories, the cost of living has actually decreased. However, the average housing costs increased by almost 2 percent.
Now that we’ve highlighted annual changes from the past year, let’s look into each category so you can put together a living calculator and determine if this is one of the best places for you to call home.
How you feel about the housing market in Austin depends on where you’re coming from. New York City and San Francisco transplants will find property value refreshingly affordable, while those moving to Austin from smaller cities may find average rent surprisingly expensive.
Average rents for Austin apartments have increased compared to last year. A one-bedroom apartment in Downtown Austin is up 45 percent and costs an average of $1,523 per month. Of course, the cost of housing varies pretty dramatically depending on what part of Austin you’re in.
When you compare the cost of rent for a one-bedroom in Austin to a one-bedroom in San Francisco, you’ll realize the price difference. A one-bedroom in San Fran averages $3,368 a month.
Minutes from Downtown and a short walk to all things boutique and hip, Bouldin Creek rents average around $3,037 per month. Triangle Slate, Central Austin and Barton Hills have all seen price hikes for one-bedroom apartments and range from $2,146 to $2,588. These are some of the most popular neighborhoods and you’ll pay a higher price to live here.
More typical, however, are the family-friendly neighborhoods of Clarksville and Brentwood, with average rents ranging from $1,825 to $1,839, respectively.
For bargain hunters, it’s possible to find even better deals on rent, like $950 in Crestview or $1,000 a month for a one-bedroom in North Loop.
Homebuyers will probably not be surprised to find that the real estate market is hot and housing prices are competitive. Housing costs in Austin are 11.8 percent higher than the national average. Data shows the average cost of a home in the best neighborhoods of Austin is $565,000.
Of course, home prices vary, but one thing is certain — most are going well above the asking price. In fact, according to Redfin, homes in Austin are selling at the biggest premium in the country, seven percent above asking prices and are on the market for an average of 38 days.
Food costs vary from Houston to Dallas to Austin, but one thing is for sure — foodies have much to celebrate in Austin. From celebrity chefs to taco trucks, good eats await around every corner, at every price point.
Budget diners can enjoy Taco Tuesdays at Quality Seafood with $2 beers and $2 seafood tacos. On the higher end, Sunday brunchers can savor authentic Mexican fare at Fonda San Miguel for around $39 per person.
Groceries in Austin cost about 8 percent below the national average. A dozen eggs will set you back $1.56, a half-gallon of milk is $1.98 and everyone’s favorite morning beverage, coffee, will cost $4.04.
Overall, Austinites will pay less for groceries compared to other cities. In fact, the cost of food decreased by 0.22 percent since last year in the same location, according to coli.org data.
Austinites are an outdoorsy bunch, whether it’s kicking back at a music festival or taking care of business from a coffee shop patio. But don’t be fooled by the sometimes mild climate — this is a city that loves its air conditioning and is willing to pay for it.
Luckily, utilities are about 5 percent below the national average, totaling around $155.01 a month for your total energy bill.
When you calculate the average rent and cost of living in Austin, don’t forget to include the cost of utilities. Your average rent budget should account for the cost of electricity, water, sewage, gas and internet.
First, the good news: Transportation costs in Austin are about 14 percent lower than the national average. Now, the bad news: There’s a reason Austinites love to complain about the traffic.
With only two east-west interstates and no ring road around the metro, traffic in town is nothing to scoff at. Austin is often ranked in the top 10 worst commutes in the country, with average commute times around 40 minutes. One of the keys to happiness for life in this city is minimizing the time you spend on freeways.
The city has a fair transit score of 44 — primarily because of urban sprawl. Settling down in an area with access to public transportation can relieve some of the headaches of your daily commute. CapMetro is the local transit system, and it includes bus routes, light rail and university and airport shuttle buses.
Overall, CapMetro is an affordable option for getting around — if you’re not in a hurry. Kids under 18 ride free on all services, and the standard single-ride bus fare is $1.25. You can expect to pay $41.25 for a 31-day pass.
Even with the sweltering heat and sprawl, Austin’s overall walk score is 62. And with a bike score of 70, cyclists find Austin generally bike-friendly. However, the central parts of town are the most bikeable parts of the city and the most walkable: Downtown, Cedar Park, Central East Austin, all University of Texas areas, Hyde Park and Old West Austin. CapMetro buses and trains have bicycle racks that make it easy for folks to do a hybrid bike commute, even if they live in the suburbs.
Whether you’re using public transit to and from schools or your university or your job, renters can rely on public transit to get them around. Just don’t forget to account for this with your annual salary.
There are a handful of toll roads around Austin, which can significantly reduce driving times from the suburbs. The rates are confusing and vary dramatically, ranging from $0.62 to $2.79. For savings and convenience, a TxTag reduces tolls by about 25 percent and deducts from a prepaid account.
Driving is most people’s primary mode of getting around town, but it comes at a premium. Parking costs an average of $219 per month, and gasoline — while lower than the national average — still costs around $3.85 a gallon. Tire balancing costs about 10 percent less than the national average of about $43.10.
Always a hot-button issue, healthcare costs are one of those areas where your mileage may vary. Taking that into consideration, there are some general benchmarks that can give you an idea of overall healthcare costs in Austin.
A visit to an Austin dentist for a routine examination typically costs around $119, and a regular checkup with a family doctor will run you about $111.
If you’re paying out of pocket, expect to shell out around $473 for a prescription, which is right in line with the national average. But if an Ibuprofen is all you need, then you’re in luck — at $8.79 for a bottle, it’s a bargain.
Having covered the bare necessities, that leaves a world of non-essential — but not unimportant — spending to consider. Austin ranks well in this area, with goods and services just barely more than the national average.
Austin is a film buff’s dream — full of movie theaters showing everything from obscure classics to mega-blockbusters. An average movie ticket costs just $10.53, and if you’re at a BYOB backyard event, a six-pack of beer will set you back $10.12.
Staying fit and looking sharp is easy in Austin. Yoga studios dot the city, and the typical class fee is around $20, although monthly memberships will cut that fee in half or less.
Haircuts cost on average $28, and a visit to a beauty salon is usually around $50.
Even if you’re on a tight budget, you’ll find a ton of free entertainment and opportunities for physical activity in the many parks around town.
For anyone new to the great state of Texas, the big bonus is that there’s no state income tax, which everyone loves come tax time. Effectively, tax rates are non-existent.
State sales tax is 6.25 percent which makes up most of the 8.25 percent sales tax in Austin. So, if you drop $1,000 on a flat-screen TV, you’ll spend an extra $82.50 in tax.
However, there are four sales tax holidays each year in Austin, each offering breaks in different categories. April is for emergency preparation supplies, Memorial Day weekend is for EnergyStar appliances and water-efficient products and August is for back-to-school items. These are perfect opportunities to buy big-ticket items at considerable savings.
For overall financial stability and well-being, finance experts recommend that your rent should not exceed 30 percent of your budget. For an average $1,599 apartment, that means that your average salary is $63,960.
According to the U.S. Census Bureau data, the average Austin income is $71,576. Use our rent calculator to see for yourself how you might need to tweak your budget to afford the average rent for an apartment in Austin.
Most locals will tell you that life in the ATX lives up to the hype. “Come for the mild weather, stay for the Tex-Mex,” they say. OK, maybe nobody says that, but they definitely should.
Austin offers all the amenities of a big city — a booming economy, excellent food and world-class entertainment — while maintaining a famously small-town feel. From professional opportunities at tech companies to natural beauty, there’s always something more to explore in Texas’ capital city.
Regardless of your budget or tastes, there’s a home in Austin waiting for you. Check out the apartments for rent in Austin and find your landing spot today.
Source: rent.com
Both of the key metrics for residential construction, housing permits, and housing starts, beat analysts’ expectations in October. The U.S. Census Bureau and Department of Housing and Urban Development said permits rose 1.1 percent compared to September while housing starts increased by 1.5 percent.
Permits were issued at a seasonally adjusted annual rate of 1.487 million units compared to 1.471 million units in September. The September estimate was only a slight revision from the 1.473 million originally reported. Analysts polled by Econoday had estimated that permits would come in at 1.463 million units.
The permits issued in October 2023 were 4.4 percent fewer than the 1.555 million permits authorized in October 2022.
The annual rate of permitting for single-family houses was 968,000 units, 0.5 percent higher than the 963,000 units in September and an improvement of 13.9 percent year-over-year. Multifamily permits increased by 2.2 percent to 469,000 but dropped 27.9 percent compared to October 2022.
On a non-adjusted basis, there were 124,000 permits issued last month, 79,700 of which were for single-family houses, an improvement on the relative numbers in September of 116,700 and 76,500. Permits for the first nine months of 2023 total 1.252 million, down 13.8 percent from the same period last year. The 773,600 permits for single-family houses are a reduction of 10.6 percent from the same period last year and the 432,300 multifamily represent a decrease of 20.1 percent.
Privately-owned housing starts were at a seasonally adjusted annual rate of 1.372 million units compared to 1.346 million units in September, a downward revision from the 1.358 million units reported in October. Starts remained lower on an annual basis, in this case by 4.2 percent. Analysts had estimated that housing starts would be at a 1.350 million annual rate.
Single-family construction starts were at an annualized rate of 970,000 units, annualized, compared to 968,000 units in September and 858,000 units in October 2022, gains of 0.2 and 13.1 percent, respectively. Multifamily starts increased by 4.9 percent compared to September but were 31.8 percent lower year-over-year.
There were 115,400 residential construction starts in October, units 900 fewer than in September. Single-family starts were flat at 81,400.
Thus far in 2023, there have been 1.194 million residential units started, 11.3 percent fewer than by the end of October 2022. Single-family starts have declined from 884,200 to 790,600 and multifamily starts at 392,00 are down 12.4 percent.
Robert Dietz, chief economist of the National Association of Home Builders (NAHB) commented on the Census Bureau report. “Despite higher interest rates in October, the lack of existing home inventory supported demand for new construction in the fall. NAHB is forecasting improving conditions for single-family home building, as the 10-year Treasury rate has returned to near 4.5 percent, with an outright gain for single-family starts in 2024.” NAHB, however, is forecasting a decline for multifamily construction in 2024.
There were 122,200 homes completed in October, including 85,400 single-family houses and 36,000 multifamily units. Completions for the year-to-date total 1.190 million units, a 5.0 percent annual increase. Single-family completions are down 1.7 percent to 819,600 units but 361,000 multifamily units have come online, a 23.6 percent increase.
At the end of October, there were 1.674 million residential units under construction, 669,000 of which were single-family houses. There were an additional 281,000 permits outstanding, exactly half of which were for single-family units.
In the Northeast region, permits were 15.6 percent higher than in September and 12.5 percent above the October 2022 rate. Starts dropped by 14.5 percent from the previous month and 24.5 percent compared to a year earlier. Completions were 1.0 percent higher than the prior October.
The Midwest saw a decline in permits of 10.6 percent for the month and 21.8 percent year-over-year. Starts were 28.4 percent and 5.2 percent higher than the two earlier periods. Nine percent fewer units came online than in October 2022.
Permitting rose in the South by 3.1 percent but lagged the prior October rate by 5.3 percent. Construction starts fell 6.8 percent and 8.1 percent. Completions were down 1.7 percent on an annual basis.
There was a 1.7 percent dip in permitting in the West, but the rate rose 3.6 percent on an annual basis. Starts grew 12.5 percent from the prior month’s level and were 4.7 percent higher than in October 2022. Completions dropped 16.6 percent year-over-year.
Source: mortgagenewsdaily.com
Homebuyers finally got some relief as 30-year fixed mortgage rates dropped significantly last week.
After steadily climbing for most of the year, rates slid from 7.86% to 7.61% — the largest one-week decline in over a year — according to the Mortgage Bankers Association.
The decline follows recent signs that the economy is cooling, with a weaker-than-expected jobs report and an uptick in unemployment. Lenders tend to lower mortgage rates when there’s a sign of an economic slowdown or recession.
With mortgage rates dropping, monthly homeownership costs will become more affordable. However, home prices have risen by 30% since 2020, which has squeezed out many buyers.
Despite a brief dip in early 2023, the median U.S. home price has risen to $431,000, per the latest U.S. Census Bureau data.
Assuming that you can afford a 20% down payment on a $431,000 home, the monthly payments for a 30-year fixed mortgage with a 7.61% rate work out to $2,437.
If you’re a potential homebuyer, you can use CNBC Make It’s mortgage calculator to figure out how much your monthly mortgage payments would be based on the prevailing interest rate.
Just remember that the calculator doesn’t include additional expenses like insurance, property taxes and private mortgage insurance, which is typically required for mortgages with less than a 20% down payment.
Source: cnbc.com
Did you know that for the median sale price in Spokane on a 30-year fixed-rate loan will cost buyers more than one million dollars?
SPOKANE, Wash. — Interest rates, home prices, and a lack of inventory are some of the reasons lenders said are why fewer people are applying for home loans in the last year. This means, for the median sale price in Spokane on a 30-year fixed-rate loan will cost buyers more than one million dollars.
A new snapshot report from the Spokane Association of Realtors shows inventory of homes on the market was up 2% in the month of September, despite the small increase, there is still not enough supply.
“There’s not enough homes on the market right now, to be able to drive down the prices,” said Troy Clute, Senior Vice President of Numerica’s Home Loan Center.
Clute said climbing interest rates are causing a trickle down effect, potential sellers who don’t want to let go of their low rates and buyers waiting for more options to open up.
“So a lot of people are on the sidelines, and they’re just going to wait until rates start to come down before they put their house on the market. So that continues to keep inventory at a low,” Clute said.
If interest rates are causing sellers and buyers to holdout, the question is, are rates today really out of the ordinary? Rocket Mortgage has tracked interest rates since the early 70’s.
You may be surprised to learn rates in the past have been much higher.
In the early 80’s interest rates nearly reached 13%, then through the early 2000’s interest rates actually hovered between 8-9%.
It wasn’t until the 2010’s when interest rates drop to 5% and then to, as low as 3% in the early 2020’s.
We have a whole generation now of people that that’s all they know, because it’s been a couple of decades. And these people entering the market right now are not conditioned to, to those types of rates. And neither is the market,” said Jennifer Hentges, SNAP Housing Counseling Program Manager.
It’s this shock, Hentges hears from people coming into SNAP for help buying a home.
“We have a lot of people coming in to the home buyer education courses, and they’re all enthusiastic. And when they start learning what it’s going to take, they get discouraged.”
The U.S. Census Bureau reports the average household income in Spokane is about $64,000.
For those looking to buy a home with that income Hentges said people will not be approved for the median home price.
“That income will buy you probably somewhere between 250 and maybe not even $300,000 house,” Hentges said.
This is the challenge for home buyers, the Spokane Association of Realtors report the median home price as of September was $409,000.
“The house payment for that amount at today’s rates is about $3,335, which is a huge payment,” Hentges said.
Hentges said this means a household needs to make about $115,000 to afford a home. However, it’s not just the monthly payment, over the life of the loan people will pay a lot more in interest.
The median home price in Spokane in September of 2020 was $315,000. The interest rate then was 2.93% for a 30-year fixed-rate loan.
This means over the life of the loan someone would pay about $474,000 with a monthly payment of about $1,300.
Today the median home price in Spokane is about $410,000. The interest rate is about 8.6% for a 30-year fixed-rate loan. A large portion is interest and the monthly payment more than doubled from 3 years ago, now more than $3,000 per month.
This is the number that may surprise you, at today’s interest rates you’ll pay more than one million dollars over the life of the loan.
“That’s not to say they can’t refinance. But it does make a very big difference in what they can expect to pay over the life of the loan,” Hentges said.
Lenders say you shouldn’t bank on it, and expect to pay the rate you receive for a while. The good news, homes in this market continue to appreciate in value.
“So I think getting in right now and buying a home. Even with a higher interest rate, you have the option of refinancing later,” Clute suggested.
SNAP offers home buyer education courses to help people navigate the process and connect them to down payment assistance programs.
“It’s amazing to watch people get a home when they didn’t think they were going to have a home, save their home from foreclosure when they thought there was no hope,” Hentges said.
Lenders said the days of 3% interest are behind us, it could be a while before we see rates like that again, if ever.
Their best advice to home buyers, ask for help from a loan counselor and make the move when the numbers make sense for your budget.
Watch the full interview with Troy Clute, Senior VP of Numerica Home Loan Center
Source: krem.com
While existing homebuyers have been battling high mortgage rates for months — which are now at 8% — the builders are wooing buyers with lower rates and incentives. Today, the new home sales data beat expectations and surprised people. However, sales have been rising slowly for some time.
Using a low bar of sales from last year, the builder’s incentives have created more sales growth and their significant advantage is that they’re offering lower rates to move homes. Imagine what the existing home sales market would look like if mortgage rates were below 6%. We certainly wouldn’t be trending below 4 million existing home sale today if that was the case.
From Census: New Home Sales: Sales of new single‐family houses in September 2023 were at a seasonally adjusted annual rate of 759,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.3 percent (±16.6 percent)* above the revised August rate of 676,000 and 33.9 percent (±22.9 percent) above the September 2022 estimate of 567,000..
As you can see in the chart below, new home sales are slowly growing, There’s nothing gangbusters here, but new home sales have been slowly moving higher for some time. This is very different from the housing bubble years, where sales were booming like crazy and got close to 1.4 million. Currently, the seasonal adjusted annual rate of sales is just 759,000.
From Census: For Sale Inventory and Months’ Supply The seasonally adjusted estimate of new houses for sale at the end of September was 435,000. This represents a supply of 6.9 months at the current sales rate.
Here’s my model for understanding the builders.
We have been able to build more single-family housing, and single-family permits have been slowly rising, which offsets the multifamily weakness that should be here for some time now, as we can see in the chart below. The monthly supply of new homes is falling from the recent peak but needs more work to return to pre-COVID-19 levels.
One of the things I like to do is break down the monthly supply data into subcategories. We have a lot of homes in the pipeline that still need to get built; this is why the builders are making deals. As we see in the monthly supply data, they had a spike last year and are forced to create incentives to move homes. Here’s how the supply breaks down:
One of the data lines that very few people know about, but is critical to the inventory story in the U.S., is how many new homes are built and ready for sale! It’s not a lot now, nor has it ever been a lot. Even during the housing bubble crash years, we never got above 200,000. Most active listings’ inventory growth comes from the existing home sales market.
Keep things simple with today’s new home sales report: the builders confidence has been falling for months as rates have risen; many builders can’t pay down rates, and the ones that do are taking a hit on their profit margins.
However, the builders’ profit margins are still higher today than in the previous decade. This is the first time this century that we have seen a noticeable gap between purchase application data and new homes because, as we all know, the builders are singing: Baby, it’s cold outside…come inside for lower rates.
Source: housingwire.com
The Big Apple is one of the most iconic places on Earth. New York City residents even go as far as to associate the concrete jungle with who they are as a person. With world-class museums, accessible public transportation, delicious restaurants, influential theatres and many famous landmarks, the city is truly a tourist’s paradise.
But while visiting is fun, moving to New York City may feel overwhelming. Between apartment hunting, navigating steep annual rent and the various boroughs of the city, the city feels like no other city.
In this guide, we’ll break down what you need to know before you pack your bags and set off to become a New Yorker.
New York City is the most populous city in the United States. Thinking of the city might conjure up images of the Empire State Building, the Statue of Liberty and the bright lights of Broadway.
However, there’s much more to the city than the tourist hotspots. New York City is divided into five boroughs: Manhattan, Brooklyn, Queens, the Bronx and Staten Island. Each has a distinctive personality, with different cultural influences and attractions.
While each area is different, here are some key figures to give you a glimpse of the city overall.
Between all five boroughs, New York City has hundreds of neighborhoods to explore. But don’t let this intimidate you. They’re all connected by New York’s world-famous transit system, so you can peruse them at your leisure. Here are a few of our favorite neighborhoods to get you started.
New York, the city that never sleeps, holds a unique place in the hearts of its residents. There’s no place in the world quite like New York City and few cities that even come close to comparable. Here are just a few of the reasons that people love living in this city.
More languages are spoken in NYC than in any other American metro. With its long, rich immigration history, the city hosts a colorful blend of traditions, cuisines and lifestyles. Especially through the distinct boroughs of New York City, which each have its own unique personality and cultural identity.
From the vibrant energy of Manhattan to the artistic ambiance of Brooklyn, the historical charm of Queens, the green serenity of the Bronx and the island spirit of Staten Island, no matter where you go in New York, you’ll always have the opportunity to learn about a different culture.
New Yorkers love to complain about their subway system. However, even they secretly know they have it better than most people in the other cities. New York City’s subway serves more than 400 stations, making it a breeze to get where you need to be.
The subway map shows the subway also connects to numerous bus lines, ferry stops and commuter trains, giving riders even more options. From the Upper West Side to Staten Island, the subway is the easiest way to get around your new city.
Getting bored in NYC just might be impossible. The city boasts hundreds of restaurants, bars, museums, theaters and places to shop. New York City also has excellent parks, scenic riverfront trails and even beaches. Whether your ideal Saturday is spent at the Metropolitan Museum or taking a subway ride to walk the Brooklyn Bridge, you will never run out of places to explore.
Of course, no city is perfect. Here are a few downsides that you should consider before you move to New York.
New York City is one of the most expensive cities in America. Here, you can expect everything from your monthly rent to your groceries to cost a bit more. Space is also at a premium, so even expensive rentals tend to be smaller than what newcomers might be used to. Even your security deposit will be a tad pricier than you are probably used to.
NYC is the most densely populated city in America. As such, it can be hard to avoid the crowds when you’re out and about. Neighborhoods in midtown and downtown Manhattan can get particularly packed, so plan accordingly. Consider neighborhoods like Staten Island and Brooklyn when opting for a less densely populated area in New York, with all the same perks and amenities.
Living in any big city can take some getting used to and New York is no exception. The city can be noisy, dirty and downright overwhelming. If you’re coming from a smaller city or town, New York may feel like a different planet. It’s best to visit the Big Apple during your apartment hunt to really get a feel for the space and pace of the city.
New York is a city that’s in constant motion. But for the people who live here, no place feels more like home. If you’re ready to make New York your home, we’re here to guide you every step of the way. Find your perfect New York City apartment here, and get ready for your journey to the city that never sleeps.
Rent prices are based on a rolling weighted average from Apartment Guide and Rent.’s multifamily rental property inventory of one-bedroom apartments. Data was pulled in October 2023 and goes back for one year. We use a weighted average formula that more accurately represents price availability for each individual unit type and reduces the influence of seasonality on rent prices in specific markets.
Population and income numbers are from the U.S. Census Bureau. Cost of living data comes from the Council for Community and Economic Research.
The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.
Source: rent.com
When the housing market was searing hot, buyers faced intense competition — bidding wars, cash investors, and buy/sell decisions made on rapid deadlines. Now that real estate has cooled, there are fewer homes for sale, two-decade-high interest rates, and stubbornly elevated house values.
It’s rarely easy to buy a home. And if you can find a house you love, the question becomes: Is now a good time to buy?
Looking for the perfect time to buy? Fewer than one in five consumers surveyed by Fannie Mae in July 2023 thought that it was a good time to buy a home. Yet, timing the housing market is more complicated than timing the stock market. Which is impossible. There are few “just right” Goldilocks real estate markets.
But you’re not buying the market. You’re buying a house in a city, neighborhood, and block where you want to live. Hopefully, for quite a while.
We all know this story. Interest rates have risen — and mortgage rates are no exception. The Federal Reserve has been raising short-term interest rates for well over a year in an effort to shrink inflation — the rise in consumer prices. Not only do the Fed’s rate increases immediately lift short-term mortgage rates such as variable-rate loans, but they also tend to influence long-term mortgage rates upwards as well eventually.
And though we don’t live in a 2%-3% world these days, mortgage rates are near their 52-year historical average.
Since April 1971, the 30-year mortgage rate has averaged 7.74%, based on data collected by Freddie Mac.
Of course, that’s little comfort to homebuyers today who remember when rates were under 3% for much of 2021. Conversely, the highest rate on record was a whopping 18.63% in October 1981.
According to Zillow research, the trend of mortgage rates — whether interest rates are generally rising or falling — may influence whether existing homeowners would consider selling their existing house to move into another. With so many existing homeowners paying a much lower mortgage rate, the study found it would take rates to fall somewhere to between 4% and 5% before they would sell the home they’re in and buy another.
This rate gridlock is contributing to the lack of existing homes for sale.
Take action: Consider the interest rate strategies below until (and if) mortgage rates fall significantly lower for an opportunity to refinance.
There is a little good news, though. Higher mortgage rates have softened the real estate market, and the increase in home prices is moderating.
The rise in existing home values is slowing. Home values are lower year-over-year in almost half (23) of the 50 largest metro areas, according to a Zillow analysis.
Take action: Look for homes with price reductions where you want to live. Then negotiate even harder.
But listings for existing homes are far fewer. For more than 12 months, new listings have been down year-over-year. The number of new listings of homes for sale is down more than 20% from pre-pandemic levels, according to Realtor.com.
Take action: Consider expanding your search to more affordable areas close to your favorite neighborhood if it’s too pricey.
New home inventory is rising. Construction of new homes is showing promise of growth, according to the U.S. Census Bureau. However, builders are still wary of oversupplying the market, concerned that consumer demand could sag as potential buyers shy away from rising mortgage rates.
Take action: If you want to buy a house now, consider new construction. You may be able to choose some finishes or make an even better deal on a spec home that’s been on the market for a while.
Buying a home is more than considering macroeconomic factors. It’s an important life decision based on your personal and financial situation.
When you rent, the decision to move is broken down into six months, or a year or two at a time, as your lease renews. But every dollar-related detail makes a home purchase a medium- to long-term investment. Buying a house includes various costs: the down payment, closing costs, and financing fees, moving expenses, property taxes, and perhaps selling your existing place.
Homeownership requires a years-long timeline. How you make a living, your friends, family, and even community amenities all come into play.
A primary consideration: your job. Will it require a location change anytime soon, or can you live where you please? Is your income steady and all but assured?
One of the significant factors that will qualify you for a home loan is your credit score. It’s important to know it before applying for a mortgage.
For the most common loan, a conventional mortgage not backed by a government agency, you generally need a FICO score of 620 or better.
FHA loans can allow a credit score as low as 580 with 3.5% down. VA loans issued to qualified military service members and veterans don’t officially have a minimum credit score, though some lenders will require a FICO score of 620.
As a benchmark to where you stand, the median credit score on a new mortgage in the second quarter of 2023 was 769, according to the New York Federal Reserve.
Of course, minimum scores are the entry-level to qualifying; the higher your score, the better the loan terms you’ll be offered. Most importantly, that can mean you’ll pay a lower annual percentage rate over the life of the loan. You may also have more room to negotiate on fees.
A primary financial metric lenders will use to determine your creditworthiness is your debt-to-income ratio.
Fannie Mae, a government-sponsored entity that provides liquidity to the home loan market, looks for a maximum total DTI ratio of 36% of “the borrower’s stable monthly income.” Exceptions can allow for total DTIs up to 50%, but it’s usually best to avoid working on the edges of qualification if you can.
You can calculate your DTI by dividing your total recurring monthly debt by your gross (before taxes and other deductions) monthly income.
Include debt such as monthly mortgage payments (or rent), real estate taxes, and homeowner’s insurance. Also, add any car payments, student loans, and the monthly minimum due on credit cards. Remember any personal loan payments and child support or alimony.
Do not include debt such as monthly utilities — like electricity, water, garbage, or gas bills — or car insurance, television streaming subscriptions, or cell phone bills. You can also exclude health insurance costs and miscellaneous expenses such as groceries or entertainment.
Having a cash cushion in the form of emergency savings shows lenders that you are prepared for the unexpected. Of course, that savings account should also include …
A large chunk of your savings account should be dedicated to the down payment. A minimum of 3% down is required in order to qualify for a conventional loan targeted to first-time homebuyers — or ideally, 20% to avoid private mortgage insurance. Yes, zero-down options exist if you are eligible for a VA- or USDA-backed loan.
According to Realtor.com, the average down payment in the first quarter of 2023 was 13%.
Buying a house when interest rates are high can require some financial finesse to enhance affordability.
1. Buying discount points
Prepaying interest in order to lower your ongoing mortgage rate is called buying discount points. One point is equal to 1% of the loan amount. However, lenders sometimes add a point or two to a mortgage proposal to make their loan offer appear more enticing. But you’re actually paying for the discount with an upfront fee.
When shopping for a loan, compare loan offers with zero points. Then, you can decide whether to buy points to lower your interest rate. It is important to note that buying one point (paying 1% of the loan amount upfront) will generally reduce your interest rate by only one-quarter of a percentage point.
2. An interest rate buydown
Borrowers can lower their mortgage interest rate for the first few years at the beginning of the loan term with a buydown. Home builders, sellers, and some lenders sometimes offer an interest rate buydown to boost sales.
While you get a short-term break on the interest rate, your payments and total interest may actually be higher. It’s a strategy that requires running the numbers on the long-term benefits.
If you’re paying for the buydown, compare a mortgage both with and without a buydown. By the way, lenders will qualify you based on the permanent interest rate, not the temporary buydown rate.
3. An adjustable-rate mortgage
A mortgage product that increases in popularity whenever rates begin to rise is back: the adjustable-rate mortgage.
ARMs have a fixed interest rate for an introductory period, often five to 10 years, and then the rate changes regularly, usually once or twice a year. Tips when shopping for an ARM:
Look for an introductory rate that is lower than a fixed-rate mortgage.
Choose a term you feel comfortable with, perhaps in line with how long you plan to stay in the home.
Make sure you budget for possible increases in your monthly payment if the interest rate moves higher after the end of the introductory rate period.
4. A shorter-term mortgage
Are you more comfortable with an interest rate that never changes, even if your monthly payment is slightly higher than you’d like? Consider a shorter-term loan. Mortgages with 20- or 15-year fixed terms, as opposed to the traditional 30-year term, typically come with lower interest rates. The lower rate and shorter term combination means you’ll gain equity in your home faster, too.
Buy smart and shop a lot. Relentlessly shop mortgage rates and lenders for the best loan offers and justified fees. Get a written preapproval from your lender, then shop for a house you can love and can afford. Your home buying competition is.
According to Zillow, when it comes to first-time buyers versus repeat buyers, first-timers are more likely to reach out to at least three lenders and three real estate agents.
Source: finance.yahoo.com
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Thu, Oct 12 2023, 11:10 AM
Today is 101223. Of course you know, by looking ahead to the last day of 2023, that it will be 123123. By then, how many times do you think you’ll hear, “Due to a strategic decision, we’ve decided to…”? Those lenders looking at volumes for the next several months may be wary or even frightened. As if volumes aren’t scary enough, there are only 19 days until Halloween! Where are you going to be trick-or-treating this year? There are some good candidates out there that my cat Myrtle may fly into on her broomstick: Tombstone (AZ), Slaughter Town (LA), and Seven Devils Town (NC) are at the top of her list. The U.S. Census Bureau reports that there are roughly 128.5 million occupied U.S. housing units that could be potential stops for trick-or-treaters. If you’re at one of those and are expecting trick-or-treaters, there are 3,227 U.S. confectionery and nut stores and 726 U.S. formal wear and costume rental establishments. (Today’s podcast can be found here. This week’s is sponsored by NotaryCam, your partner for The Perfect Close! Ease of use, additional closing compliance, better borrower experience, reduced timelines, and cost savings, what is stopping you from getting on the RON train with NotaryCam? Listen to an interview with NotaryCam’s Suzanne Singer on why Remote Online Notarization (RON) hasn’t taken off like many would have hoped.)
Lender and Broker Software, Products, and Services
“Harness insights from the upcoming MBA Annual Convention and Expo by creating a meaningful strategy for innovation! It can be difficult to buy advancing industry technology anytime during the year, but this can be the best time to introduce a simple, sophisticated, easy-to-implement solution that will solidify your vision for 2024. Our recent blog, ‘Tapping Innovation to Ignite Change Automation for Mortgage Servicing,’ highlights smart workflow, what you’re missing if you haven’t embraced digitization, and how to leverage AI while avoiding the risk of emerging technology. These are important elements of surviving and competing in today’s complex and volatile mortgage landscape. Don’t miss the chance to embrace industry-proven innovation: Let CLARIFIRE® do your heavy lifting while you capture a better approach, better results, and better software… today!”
“We know your #1 goal for next week’s MBA Annual23 is finding the best Philly cheesesteak. So, what’s #2 on your list? If it’s streamlining your mortgage lending or unlocking cost-saving strategies, then this is your sign to schedule time with Certified Credit at MBA Annual23! Backed by the power of automation, Certified Credit’s Cascade solutions can speed up your time to close, improve borrower satisfaction, and standardize your operations. Their Cascade products automate your lead generation, VOE, UDM, borrower retention, and more. By delegating these tasks to technology, you can spend more time managing and growing your market share and less time on manual processes. Paired with milestone ordering, Cascade’s automation can take your operational efficiency to new heights with customized workflows for your unique operation. Make your solutions work for you, not the other way around with Certified Credit!
“We’re hearing that lenders are focusing on ramping up their tech stacks and (most importantly) focusing on the quality of the data powering that technology. Budgeting for 2024 has already begun, and you may be considering taking your company’s tech stack to the next level as part of next year’s activities. You need to look for a property data provider that delivers the most comprehensive data through the best channels to meet your unique business needs. That’s why we’re highlighting First American Data & Analytics. They’re more than just a data provider – they offer end-to-end solutions for the mortgage lifecycle. From detecting fraud and risk to providing valuation solutions, First American Data & Analytics enables lenders to make informed, data-driven decisions. If you’re ready to have access to the most accurate, complete, and current data, reach out to the team and get a free sample of their data sets.”
“Working to Provide the Best Homeowner Experience! Cenlar is more than just a mortgage subservicer. We strive to be our clients’ trusted partner each and every day. And a big part of that is how we care for our clients’ homeowners. A home is most likely someone’s largest asset. That’s why we are continuously evolving to provide the best homeowner experience. Whether that’s the regular cycle of onboarding, escrow, monthly payments and year-end or challenges facing homeowners like natural disasters, we are responsive, anticipatory and always caring. Let’s discuss how Cenlar can meet the mortgage servicing needs of your organization. Call 1-888-SUBSERV (782-7378) or visit here. We want to be your trusted partner, each and every day.”
FundingShield, the market leader in wire-fraud prevention, released its Q3-2023 Fraud Report showing 49.2 percent of transactions had deficiencies last quarter. Q3 yielded an all-time high for closing agent insurance coverage issues indicating more parties failed to maintain coverage per lender requirements. FundingShield’s CEO, Ike Suri, commented, “Tech-innovations that have been deployed by mortgage companies have helped bring down closing costs, however emerging technologies being introduced such as AI -driven microservices continue to add new vulnerabilities and gaps that can be exploited by threat actors. We expect this trend to continue to rise.” FundingShield Announced its Partnership with SitusAMC delivering integrated wire- fraud prevention services. FundingShield’s live ecosystem of escrow/title/settlement agent source bank data is the largest in the industry with 95 perecent+ coverage. Clients of SitusAMC’s warehouse lending platforms ProMerit and WLS now benefit from direct access to FundingShield’s cost-saving, risk-reducing, live ecosystem via API and data integrated solutions delivering bank account verifications, data integrity and counterparty compliance. Contact us.
VIPs get the best seats, the best service, and the best tech. From securitization to servicing, Wolters Kluwer gives you the VIP experience with integrated eMortgage technology solutions. Wolters Kluwer provides you with expert solutions to increase your lending efficiencies and support regulatory compliance efforts, at the right size and level of service for your business. From document preparation with eSign technology to eVault and eRecordation, Wolters Kluwer’s integrated suite of digital solutions is supported by decades of compliance expertise. Arrange a brief meeting with an expert today to learn more and become a Wolters Kluwer VIP. Or, meet with us at MBA Annual next week and drop by booth 903 to learn more.
The Consumer Finance Protection Bureau in the News
As noted in yesterday’s Commentary, the regulatory environment is something that lenders, and vendors, must deal with constantly. The CFPB suing Freedom Mortgage is an example of that. The CFPB is doing other things as well, like…
The CFPB announced threshold adjustments under TILA (Regulation Z) issuing a final rule amending the official interpretations for Regulation Z, which implements the Truth in Lending Act (TILA). These adjustments are applicable January 1, 2024, consistent with relevant statutory or regulatory provisions.
The CFPB announced it is beginning a rulemaking process to remove medical bills from Americans’ credit reports. The CFPB outlined proposals under consideration that would help families financially recover from medical crises, stop debt collectors from coercing people into paying bills they may not even owe, and ensure that creditors are not relying on data that is often plagued with inaccuracies and mistakes.
The CFPB Advisory Opinion (AO) clarifies that certain fees charged by banks to fulfill consumer information requests violates the Consumer Financial Protection Act (CFPA). The CFPB views these fees as impeding a consumer from exercising its right to receive account information in a timely manner. The CFPB has already addressed surprise overdraft, insufficient (NSF), and return check fees in an October 2022 compliance bulletin. In a 2021 report, the CFPB stated that overdraft and NSF fees, periodic maintenance fees, and ATM fees represented about 83 percent of all checking account fees. The AO would eliminate fees that represent a portion of the other 17 percent of checking account fees.
Capital Markets
For over two decades, MCT has been a leading source of innovation for the mortgage secondary market. From architecting modern best execution loan sales to launching the most successful and advanced marketplace for mortgage-related assets, MCT continues to revolutionize how mortgage assets are priced, locked, protected, valued, and exchanged. MCT Marketplace is liquidity. We connect buyers and sellers in a unique, digital auction regardless of counterparty approval status. Through our patent-pending technology, sellers have access to the most robust set of take-outs, while buyers are seamlessly connected to the largest community of sellers in the U.S. Join MCT’s Phil Rasori, Paul Yarbrough, and Justin Grant on October 25 at 11 A.M. Pacific for a practical guide to maximizing your loan trading profits during a one-hour webinar. You’ll leave ready to analyze performance and make actionable changes to boost profitability.
Striking workers, whether they are writers or MGM workers in Las Vegas or, now, UAW Ford truck workers walking out on Wednesday in Tennessee, negatively impact the economy. And that can slow things down, indirectly doing the Fed’s work for it. Interestingly, rates have indeed come down. After strong payrolls to close last week sent the benchmark U.S. 10-year Treasury note (though we discussed on yesterday’s weekly Mortgage Matters show how a better benchmark is the 5-year or 7-year) 20 basis points higher to 4.78 percent and the 30-year yield climbing 24 basis points to 4.94 percent, the highest level since September 2007, rates have dropped this week in response to both geopolitical turmoil in the Middle East and dovish remarks from Federal Reserve officials.
Loan originators know, however, that mortgage price makers didn’t really chase the rally, choosing to leave recipes as is. The narrative has shifted from how high rates need to go to how long rates need to be kept at restrictive levels for inflation to fall to an acceptable level for the Fed. The Minutes from the September FOMC meeting were released yesterday and revealed that U.S. Federal Reserve policymakers agreed that policy should remain restrictive for a while to come, though noting that the risks of overtightening had to be balanced against keeping inflation on a path toward 2 percent. As a result, the probability of a 25-basis points rate hike at the November 1 FOMC meeting slid to below 10 percent.
Are markets getting ahead of the Fed again? The market looked past a view from those FOMC Minutes that a majority of participants judged one more rate hike would likely be appropriate at a future meeting. That was despite learning yesterday that inflation at the wholesale level (the change in the price of raw or intermediate inputs as they enter the production process) is rising faster than expected, reflecting rising commodity prices, particularly energy (approximately 40 percent of the increase was attributed to gasoline). The Producer Price Index rose 0.5 percent month-over-month and 2.2 percent year-over-year. Before we view the report too negatively, it’s much better than the 11.7 percent annual rate that PPI hit in March 2022. Markets are looking for no hike at the upcoming Fed meeting knowing that the jump in long-term rates since the last FOMC meeting has effectively done the Fed’s rate hike work for it, as several Fed officials have alluded to in recent remarks.
Today’s economic calendar began with the all-important Consumer Price Index report for September (+.4 percent versus +.3 expected; core +.3 percent; up 4.1 percent year over year) and weekly jobless claims (209k, so employment is still strong; 1.702 million continuing claims). Treasury then announces the auction sizes for next week’s reopened 20-year bonds and 5-year TIPS before auctioning $20 billion reopened 30-year bonds, and we’ll receive remarks from Atlanta Fed President Bostic and Boston Fed President Collins. We begin the day with Agency MBS prices roughly unchanged from Wednesday evening and the 10-year yielding 4.59 after closing yesterday at 4.59 percent.
Employment
Are you settling for a process that isn’t working, leaving you frustrated, tired and unmotivated? Would you benefit from having the same team on every loan you send through the pipeline? To deliver the best borrower experience, Atlantic Bay Mortgage Group utilizes a one-team approach which means our Mortgage Bankers work with the same Underwriter, Processor, and Closer on every loan. And that same one-team approach has led to an overall Net Promoter Score of 96.84 percent! “Having one team has been super beneficial. Being able to communicate with certain people and knowing who’s covering and handling specific items has helped me ensure seamless transactions.” – Matt Bullins, NMLS #1805439. From production to leadership, opportunity is always around the corner when you work with the team National Mortgage News named the “Best Large Mortgage Company To Work For” in 2023. Request a confidential phone call to learn more about Atlantic Bay.
“First Community Mortgage (FCM) is on an impressive growth trajectory, having tripled its sales staff in the past 15 months. Despite challenging market conditions, FCM continues to thrive and expand. As a federally chartered lender, FCM loan officers can originate in 48 states, unlocking a world of opportunities. We understand that transitioning to a new opportunity can be overwhelming, which is why we provide a dedicated transition team to support you during your crucial first 120 days, ensuring a seamless and successful journey. FCM offers an ideal blend of flexibility and support, providing you with an economic advantage that goes beyond what you would typically receive. Our commitment to enhancing your experience is evident in our substantial investments in technology, aimed at simplifying your workload and maximizing your potential for business growth. Come along with us and discover the possibilities. Contact Bret Head or visit us online.”
“In a time when loan production has never been more challenging, Planet Home Lending stands out in new product innovation. Our novel products are attracting MLOs and branches eager for a secure, progressive future in the mortgage industry. Fortify your career and market position by moving to the Top 10 lender that values professionalism and innovative thinking. Contact VP of Talent Peter Briggs or 435-709-6287. All inquiries will be held in strict confidence.”
A 25-year-old wholesaler has secured capital for growth and expansion, and has begun the hunt to acquire/merge some non-QM talent and/or non-QM companies into the existing, well-run, well-capitalized institution. This is a stand-alone company that doesn’t need capital for typical organic growth and sustainability but is searching for an ongoing group(s) to add. Please send Chrisman LLC’s Anjelica Nixt a confidential note (principals only) for forwarding to the CEO of the wholesaler, please specify this opportunity.
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Source: mortgagenewsdaily.com