Pennymac Financial Services earned a profit of $39.3 million in the first quarter of 2024, the California-based multichannel lender and servicer announced Wednesday.
The company’s pretax gain in the first quarter was $43.9 million. That was less than the $38.1 million figure it posted during the same period last year but a significant improvement from the pretax loss of $54.2 million it incurred in fourth-quarter 2023.
“PennyMac Financial reported strong operating earnings in the first quarter, with an annualized operating return on equity of 15 percent in what is expected to be the one of the smallest quarterly origination markets of this cycle,” chairman and CEO David Spector said in a news release. “Strong volume increases in our consumer and broker direct channels drove continued profitability in our production segment.”
The company’s loan production pretax income was $35.9 million during the first quarter, down from $39.4 million in Q4 2023 but up from a pretax loss of $19.6 million in Q1 2023. Production revenue totaled $184.7 million, up 5% from the prior quarter and up 52% year over year.
Pennymac reported that the quarterly increase in production revenue was primarily tied to higher net gains on loans held for sale at fair value due to higher volumes in its direct-to-consumer channel. Meanwhile, the revenue growth compared to Q1 2023 was largely due to higher overall origination volumes and margins.
The total value of its loan acquisitions and originations dropped to $21.7 billion in unpaid principal balance (UPB), down 19% on a quarterly basis and 5% below year-ago levels.
During an earnings call on Wednesday, chief financial officer Daniel Perotti said that “Pennymac maintained its dominant position in correspondent lending in the first quarter” as it acquired $18 billion in volume. That was down from $24 billion in the prior quarter and was “driven by our focus on profitability over volatility,” he said.
In the wholesale channel, Perotti noted that locked loans were up 20% and funded loans were “essentially unchanged” from the prior quarter. But broker-channel margins grew from 79 basis points to 103 basis points during that period.
“The number of brokers approved to do business with us at quarter end was over 4,000 — up 36% from the same time last year,” Perotti said. “And we expect this number to continue growing as top brokers increasingly look for a strong second option.”
Pennymac’s servicing portfolio continues to grow. Its owned mortgage servicing rights (MSR) portfolio had a UPB of $386.6 billion on March 31, up 3% from the end of Q4 2023 and up 18% from the end of Q1 2023.
In response to an analyst’s question during the earnings call, Spector said he expects the company’s servicing channel to lead to more refinance opportunities when mortgage rates eventually decline.
“We have built a really great model in terms of growing the servicing portfolio as a byproduct of our organic growth strategy,” Spector said. “And as we continue to lead in the correspondent space and continue to grow our presence in the broker-direct space, I expect that our servicing will continue to grow at probably even a little faster clip. … I don’t see a melting ice cube scenario anytime in the future.”
Last year, Pennymac earned net income of $144.7 million, a decline of nearly 70% from the $475.5 million profit it posted in 2022. And in fourth-quarter 2023 alone, the company lost $36.8 million.
Its net revenues shrank from $2 billion in 2022 to $1.4 billion in 2023. Its overall profit was largely due to the strong performance of its servicing portfolio.
Legal troubles with Black Knight contributed to the loss in Q4 2023. Late in the year, an arbitrator awarded Black Knight $155.2 million in damages tied to a breach of contract claim in a four-year dispute involving the companies. Black Knight accused Pennymac of copying its mortgage servicing platform.
At the close of the market on Wednesday, Pennymac’s stock price was $92.07, up 4.86% since the start of the year.
Two former New Jersey-based mortgage loan originators have been charged with conspiracy to commit bank fraud by the U.S. Attorney’s Office, District of New Jersey according to an announcement by the U.S. Department of Justice (DOJ) and U.S. Attorney Philip Sellinger.
Christopher Gallo has been recognized as a top-producing loan originator, at one point being named Scotsman Guide‘s fourth-ranked LO in America. Gallo previously shared perspectives with HousingWire on his business strategy for 2023 after enduring challenges in 2022. At the time, Gallo was employed by NJ Lenders Corp, which primarily operates in New Jersey, New York and Pennsylvania.
Alongside Gallo, Mehmet Elmas was also named in the complaint, filed by a special agent working under the Office of the Inspector General (OIG) at the Federal Housing Finance Agency (FHFA). The complaint says that Gallo and Elmas were employed by the same company at the time of the alleged offense, with Elmas working as Gallo’s assistant.
Gallo and Elmas have each been released on a $200,000 bond after appearing before a magistrate judge in Newark federal court, the DOJ said.
“From 2018 through October 2023, Gallo and Elmas used their positions to conspire and engage in a fraudulent scheme to falsify loan origination documents sent to mortgage lenders in New Jersey and elsewhere, including their former employer, to fraudulently obtain mortgage loans,” the DOJ alleges.
The pair allegedly “routinely mislead mortgage lenders about the intended use of properties to fraudulently secure lower mortgage interest rates,” adding they “often submitted loan applications falsely stating that the listed borrowers were the primary residents of certain proprieties when, in fact, those properties were intended to be used as rental or investment properties,” the complaint alleges.
The alleged scheme misled lenders about the “true intended use of the properties,” and “Gallo and Elmas secured and profited from mortgage loans that were approved at lower interest rates,” the DOJ claimed.
The alleged conspiracy also included falsifying property records, including “building safety and financial information of prospective borrowers to facilitate mortgage loan approval,” the DOJ alleged.
In a statement, NJ Lenders Corp told HousingWire that it is cooperating with law enforcement as the investigation progresses.
“NJ Lenders is proud of its 33 years of successfully assisting homeowners with integrity and professionalism. We are fully cooperating with law enforcement and the ongoing investigation of two former employees,” said Mark Tabakin, an attorney for NJ Lenders.
“The actions of these former employees appear to have been coordinated to benefit them financially while taking advantage of the reputation and trust of the firm,” he continued. “NJ Lenders’ work will continue uninterrupted as we provide the highest level of service to our clients.”
Gallo originated more than $1.4 billion in loans between 2018 and October 2023, according to the DOJ. When listed as the fourth top-producing LO in 2022 by Scotsman Guide, the publication placed his total volume at $1.175 billion for that year alone. One-third of his loans were purchases, with the remainder being refinances.
“The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense, whichever is greatest,” DOJ said.
Gallo joined CrossCountry Mortgage in October 2023, according to NMLS licensing information. His webpage at CCM was taken down on Wednesday, and a spokesperson for the Cleveland-based retail lender did not immediately return a request for comment.
This story has been updated with a statement from NJ Lenders Corp.
The following is a sponsored partnership with Kudos. Have you heard about Kudos – the free AI-powered wallet that helps you get more out of your credit cards? In this Kudos Review 2024, I’ll explain how this desktop browser extension and iPhone app helps you earn the maximum rewards and benefits when shopping online. With…
The following is a sponsored partnership with Kudos.
Have you heard about Kudos – the free AI-powered wallet that helps you get more out of your credit cards? In this Kudos Review 2024, I’ll explain how this desktop browser extension and iPhone app helps you earn the maximum rewards and benefits when shopping online. With the average Kudos member earning $750 per year, you won’t want to miss out on this game-changing tool!
With Kudos, you can always choose the best card for maximum rewards at checkout, easily autofill your card information (including CCV) with just one click, find new cards that match your shopping preferences, and more.
Plus, Kudos has helped its members earn $150 million in rewards and counting!
The best part? Kudos is completely free. That’s right—no hidden fees. Just shop like you normally do, and Kudos automatically helps you during checkout to maximize your rewards.
If you don’t want to leave money on the table, there’s no reason not to use Kudos to take the guesswork out of deciding which credit card to use for each online purchase.
Personally, I find Kudos incredibly helpful. As someone with multiple rewards credit cards, each with their own unique benefits, Kudos saves me a ton of time by instantly identifying the best card to use for each transaction. This not only simplifies my life but also helps me earn more money!
This is great so that you are using the full potential of your credit cards.
And, even if you only have one credit card, Kudos is still helpful! This is because, at many online stores, you can still double your rewards for using the Kudos browser extension and earn points to put towards free gift cards.
You can download Kudos for free by clicking here.Plus, use code “CENTS” to earn $20 back after your first eligible Boost purchase.
Key Takeaways from this Kudos Review 2024
Kudos is a free AI-powered wallet that maximizes your credit card rewards when you shop online, whether you’re buying groceries, clothing, travel packages, furniture, or anything else—all with a single click.
With Kudos, you no longer have to guess which credit card to use for each purchase. Just shop like normal and Kudos will automatically recommend the best card to make sure you always earn the highest cashback, points, or miles on every transaction.
Kudos supports over 2 million stores, so you’re virtually guaranteed to find your favorite retailers and maximize your rewards with them.
Even if your credit card doesn’t typically offer rewards, you can still earn rewards by shopping through the Kudos browser extension at participating merchants.
Kudos is compatible with all major desktop browsers (Chrome, Safari, Edge) and is also available as an iPhone app, making it easy to boost your credit card rewards across every device.
Kudos Review 2024
Below is my Kudos review.
What is Kudos?
Kudos (also known as Kudos Technologies, Inc.) is a helpful AI-powered browser extension and app designed to help you make the most of your credit cards, particularly when shopping online. It was founded by Tikue Anazodo and Ahmad Ismail, and Kudos has been featured on Forbes, Yahoo Finance, Bloomberg, The Motley Fool, Nasdaq, and more.
Think of it as a smart wallet for your browser. Driven by the complex world of credit card rewards, the Kudos team created this tool to simplify the process.
Here’s how it shines: Select the cards you commonly use (without the need for any sensitive bank details) and Kudos tells you which one to use at checkout. You see, your cards might be packed with potential rewards for different spending categories—travel, groceries, or dining.
Different credit cards have so many different benefits (such as the rewards percentage, extended warranties, purchase protection, insurance, and more), which can be difficult to keep track of.
Kudos makes sure you’re using the best card possible to earn the most rewards, which is especially useful if you have more than one rewards credit card.
Members have collectively earned over $150 million in rewards with Kudos. On a personal level, you could boost your annual shopping rewards by an average of $750 just by using Kudos.
Plus, Kudos is super user-friendly. You can add it to your preferred desktop browser (Chrome, Safari, Edge) or use it on your iPhone, and it’s completely free. The service makes money by earning a small commission when you shop at participating stores or sign up for a card through their recommendations.
When you shop without Kudos, you could be missing out on opportunities to earn rewards with your purchases. Why miss out on potential earnings when Kudos provides a free and simple solution?
Kudos also has a really helpful Instagram account full of helpful credit card tips. I highly recommend checking that out here.
How Kudos works
Imagine you’re online shopping, ready to checkout, and you pause, thinking, which credit card do I use? That’s where Kudos steps in, always there to give you the best advice.
Kudos knows your cards and suggests which one to use at checkout. But how? First, you add your credit cards to the Kudos wallet. It’s safe and simple. When it’s time to buy something, Kudos pops up and says, “Hey, use this card!” Why? Because it’s the card that will give you the most rewards or savings for that purchase.
Here are the steps to get started:
Download the Kudos browser extension (takes less than a minute to do) on your desktop browser (Chrome, Safari, Edge) or iPhone. You’ll also answer basic questions like your name and the type of credit card you have (such as the Chase Freedom card).
Shop like you normally do.
Once you’re ready to checkout, Kudos will automatically appear to let you know which credit card you should use to get the most rewards and benefits.
Click the card you want to use and Kudos will then autofill the card info, making checkout a breeze.
What stores does Kudos work on?
Kudos works at over 2 million online stores and with over 3,000 credit cards – so there’s a very good chance that it’ll work for you.
Don’t see a store supported or can’t find your card? Their support team is super responsive and will help you out!
Kudos vs. other rewards tools: What sets Kudos apart?
When it comes to maximizing credit card rewards, Kudos stands out from other popular tools like Rakuten, Honey, and Capital One Shopping.
While these platforms primarily focus on providing cashback offers or coupon codes, Kudos takes a more comprehensive approach to optimize your entire credit card strategy.
What sets Kudos apart is its AI-powered technology that analyzes your specific credit cards and spending habits to recommend the best card for each purchase.
This makes sure that you’re not only earning cashback but also maximizing your points, miles, and other card-specific perks. By considering factors like bonus categories, statement credits, and exclusive benefits, Kudos helps you get the most value out of your credit cards.
Key Features of Kudos
When shopping online, you want to stretch your dollar as far as it can go. Kudos has features that make this easy by helping you get the most out of your credit cards such as:
Maximize your credit card rewards
When you’re shopping online, Kudos helps you pick the best card to use to maximize your rewards and benefits.
With Kudos, you no longer have to guess which credit card to use. This AI-powered wallet automatically recommends the best card for each purchase, making sure you always receive the highest cashback, points, or miles possible.
I personally didn’t even know that one of my credit cards had some of the benefits that Kudos listed, and I can’t believe I had been wasting so much money by skipping out on such a valuable benefit! Kudos makes it very easy for me to see my card’s benefits all in one easy place.
Plus, if you’d like, you can add your credit card information to Kudos, and Kudos will autofill your card info (including CCV) to make checking out fast.
Another way that Kudos helps you earn more rewards is because Kudos helps you build your Dream Wallet so you can get the most out of your everyday purchases. You’ll go through a quick quiz to help Kudos gather information about your needs.
Double your rewards with Kudos Boost
With Kudos, you can increase the amount you can get in credit card rewards with just one click.
If you usually earn 4% cash back when shopping at sites like Walmart or Sephora, you’ll now earn a total of 8% back with Kudos Boost. The best part? You can earn Boost at participating stores even if your card doesn’t offer its own rewards.
Kudos Boost are reward points you earn by shopping at Boost merchants.
It works like this:
Shop at one of Kudos’ 15,000 participating Boost merchants
Click “Activate Boost” on the bottom right corner of the screen
Use Kudos at checkout – At checkout, Kudos will find your best credit card to use, autofill the payment forms, and match your credit card rewards.
Redeem rewards for a gift card
You’ll receive an email from Kudos around 1-2 days after completing an eligible transaction. After the store confirms your purchase it usually takes between 60 to 120 days for your rewards to be available, and you can then find your rewards on your Activity page on Kudos.
When you’ve earned 1,000 Kudos Boost points (equal to $10.00 USD), you can exchange them for an Amazon gift card.
Receive personalized credit card recommendations
Stop wasting time opening up credit card application pages on incognito. You can receive access to elevated card offers on Kudos’ Explore Tool through their partnership with The Points Guy.
So, if you are looking for a new credit card, use Kudos to help filter the best one for you and your situation and compare different cards in one easy place.
For example, Kudos member Christina L. was able to get 150,000 Membership Rewards points after spending $6,000 on the Amex Platinum card within the first three months of account opening. That’s almost double the 80,000 points after spending $8,000 found on the American Express website!
Answer all your credit card questions with MariaGPT
Maria GPT is an AI-powered, personalized assistant designed to answer all your credit card questions, available on the Kudos mobile app.
She can help you understand the benefits of your current cards and offer personalized suggestions for new cards based on your spending habits, goals, and objectives.
Frequently Asked Questions about Kudos Review 2024
Below are common questions about Kudos, the free AI-powered wallet.
Is Kudos free to use?
Kudos is free to use.
How does Kudos make money?
Kudos earns a small affiliate commission when you make an online purchase at one of their participating merchants. Additionally, if you use the Kudos Explore Tool to apply for a new credit card, Kudos may receive a payment from the credit card issuer.
Is there a Kudos referral code?
Yes! Sign-up for Kudos for free and use the Kudos referral code “CENTS” to earn $20.00 back after your first eligible Boost purchase.
How much can you earn with Kudos?
On average, Kudos members earn $750 per year in rewards by using the app to maximize their earnings.
Do I need to provide my credit card numbers to use Kudos?
No, you don’t need to enter your credit card numbers to use Kudos. Simply select the cards you have in your wallet, and Kudos will help you maximize your benefits at checkout. Providing your credit card information is optional if you want to speed up the checkout process.
Can I use Kudos with other browser extensions?
If you use Kudos Boost and then activate another rewards program like Rakuten, Honey, Capital One Shopping, or others during the same shopping session, Kudos may not be able to earn an affiliate commission. To make sure you get maximum rewards, it’s best to use Kudos exclusively during your online shopping.
Is Kudos wallet legit?
Yes, Kudos is a legitimate browser extension and app used by over 200,000 shoppers who have earned over $150 million in rewards. You can find genuine user reviews on trusted platforms like Trustpilot, Chrome Web Store (4.8/5 stars from 667+ reviews), and the Apple App Store (4.7/5 stars from 3,500+ reviews).
Is Kudos safe and secure?
Yes, Kudos prioritizes user security and employs industry-leading protocols, including bank-grade 256-bit encryption, to safeguard your data. Kudos handles your personal and financial information with the utmost care and never sells or shares it with third parties. You can feel confident and secure when using the Kudos browser extension and app.
My Kudos Review 2024: Final Thoughts
I hope you found this Kudos review informative and helpful in understanding how this AI-powered wallet can help you maximize your credit card rewards.
Navigating the world of credit card rewards can be overwhelming, but Kudos simplifies the process with its intelligent recommendations. By analyzing a database of over 3,000 cards, Kudos ensures you always use the best card for each purchase, boosting your rewards effortlessly.
In addition to its AI-driven recommendations, Kudos streamlines your online shopping experience with a one-click autofill feature. This not only saves you time but also guarantees that you’re always using the card with the most advantageous benefits for each transaction.
Personally, I find Kudos to be a must-have shopping tool. As someone with multiple rewards credit cards, each with their own unique perks, trying to determine which card to use for every purchase can be time-consuming and confusing. Kudos eliminates this hassle by automatically identifying the best card for each transaction, allowing me to maximize my rewards efficiently.
Even if you only have a single credit card, Kudos can still help you earn more rewards. By shopping through the Kudos browser extension at thousands of participating online stores, you can accumulate points that can be redeemed for free gift cards. This means that regardless of how many credit cards you have, Kudos enables you to optimize your rewards earning potential.
Kudos also helps users find new credit cards through its partnership with The Points Guy, a well-known credit card rewards and travel website. By using the CardMatch service, Kudos helps users find the best credit card offers tailored to their specific needs and spending habits. This feature is particularly useful for those looking to expand their credit card portfolio and maximize their rewards earning potential across multiple cards.
You can sign up for Kudos for free by clicking here.
Do you use Kudos? What other questions do you have for this Kudos review?
Even homeowners who have paid off their mortgage may be finding that their available equity is not enough to downsize, according to a story published Saturday by The New York Times. The article also notes that reverse mortgages are a potentially valuable tool for seniors in the current housing environment.
Roughly 80% of older adults live in the homes they own, but housing costs and interest rates have combined to create a challenging scenario for some older people seeking to downsize into a more manageable home. The prices for smaller townhouses or condominiums can, in some cases, outweigh the prices for larger single-family homes.
“[T]he traditional notion that a house with a paid-off mortgage can serve as an A.T.M. to help fund retirement living is shifting, economists report. Homeownership no longer is an unqualified benefit for some seniors,” the story explained.
Urban Institute research economist Linna Zhu rhetorically asked if seniors were “aging in place, or stuck in place.”
According to data from Harvard University’s Joint Center for Housing Studies (JCHS), the share of older adults carrying mortgage debt rose significantly between 1989 and 2022, going from 24% to 41%. During that same period, the typical amount owed on these mortgages rose from $21,000 to $110,000.
These larger mortgage balances, combined with elevated interest rates, have made impacted seniors “cost-burdened,” according to 2023 data from the JCHS, meaning they spend at least 30% of their income on housing costs.
But with rising home prices have also come higher levels of home equity, which recently led Boston College’s Center for Retirement Research (CRR) to reduce “its estimate of the proportion of American households at risk of being unable to maintain their standard of living after retirement,” the Times reported.
The CRR’s so-called “retirement risk index” fell to 39% in 2022, down from 47% in 2019. The organization “bases its calculations on older homeowners tapping their home equity with reverse mortgages,” the Times explained.
A profiled couple obtained a Home Equity Conversion Mortgage (HECM) sponsored by the Federal Housing Administration (FHA) in 2020, which allowed them to “pay off their existing mortgage, afford cataract surgery and complicated dentistry (neither one was covered by Medicare, in this instance), replace a 22-year-old car and upgrade their plumbing, all while keeping their retirement savings intact,” the Times stated.
Zhu of the Urban Institute told the Times that reverse mortgages are “a very effective way to tap home equity,” but product adoption by seniors — as is true with many equity-tapping options — remains low.
Housing researcher Jennifer Molinsky noted that home equity is seen as “a nest egg” for those in later life, but many seniors are hesitant to tap it as a financial resource. Instead, many seniors see it as more of an emergency resource, only to be tapped when no other options exist.
“Besides, accessing home equity isn’t always simple or possible,” the Times stated. “With federally insured reverse mortgages — officially [HECMs] — the upfront costs are high […] and the paperwork substantial. In 2022, only 64,500 older applicants received reverse mortgages through the federal program.”
One researcher said that the situations of older adults could be bettered by “improving and streamlining the federal HECM program, broadening the criteria for refinancing and [home equity line of credit (HELOC)] loans, and encouraging the development of more housing, including homes and apartments suitable for older buyers and tenants.”
The Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Department of the Treasury, is sounding the alarm over challenges faced by elder financial exploitation (EFE).
In a newly released trends report, FinCEN highlighted more than $27 billion worth of “suspicious activity” across more than 155,000 filings of Bank Secrecy Act (BSA) data with FinCEN between June 15, 2022 and June 15, 2023.
The data is linked to elder financial exploitation, “or the illegal or improper use of an older adult’s funds, property, or assets.” Within the $27 billion-plus in reported suspicious activity, EFE could include both actual and attempted transactions that “may affect personal savings, checking accounts, retirement savings, and investments, and can severely impact victims’ well-being and financial security,” the report stated.
This is a follow-up to a prior notice issued by FinCEN in June 2022, which aimed to alert financial institutions of a rising trend of EFE. FinCEN noted that companies should be aware of these activities and attempt to counteract them through both internal mechanisms and reporting to authorities.
“FinCEN has long recognized the threat that [EFE] poses and the need to protect the older adult population from financial abuse,” FinCEN Director Andrea Gacki said in a statement. “FinCEN’s analysis highlights the critical role of financial institutions in helping to identify, prevent, and report suspected [EFE]. We are grateful for their vigilance and for the BSA information they have filed — and continue to file — in response to FinCEN’s 2022 advisory.”
Seventy-two percent of all EFE filings included in the data were filed by banks, with two banks alone accounting for 50,670 (33%) of all filings. The most commonly cited typology of the EFE incidents were “account takeovers,” and adult children of the elder victims were the most common perpetrators, according to the report.
“BSA filers reported adult children as the perpetrators of elder theft in nearly 40% of cases, based on a manual review of EFE-related filings,” the report explained.
Perpetrators also relied primarily on what FinCEN refers to as “unsophisticated means,” or those that “minimize direct contact with financial institution employees” and which include “using previously compromised identifying information and/or passwords, guessing passwords, or mass spam emails that elicit replies containing sensitive information.”
This is because direct involvement with financial institution personnel would increase the likelihood of being caught, since workers at these institutions “would likely identify EFE activity more frequently if victims or perpetrators conducted transactions in person, and presumably not permit the requested transactions.”
Financial institutions also filed significantly more reports related to scams targeting seniors, most frequently including “tech support” scams in which a perpetrator falsely claims to offer technical assistance, or “romance scams” in which a perpetrator attempts to present themselves as a potential romantic partner to the victim.
Real estate scams are also included in the typology of the report, although it does not mention reverse mortgages specifically. The U.S. Department of Housing and Urban Development (HUD) Office of the Inspector General (OIG) previously identified reverse mortgage scams as a potential vehicle for perpetrators to target elderly victims.
Late last year, the FBI warned the public about a problematic rise in instances of elder financial abuse. Seniors are common targets of financial scammers, and authorities consistently warn the public to safeguard the financial accounts and assets of their loved ones.
The average 30-year and 15-year mortgage rates have risen for the third week in a row, according to Freddie Mac. The increases over the past week were more substantial than over the previous two weeks, making it feel disheartening for aspiring home buyers who expected rates to go down in 2024.
Higher inflation numbers are keeping mortgage rates high for now. For the Federal Reserve to cut the federal funds rate — a move that typically also leads to lower mortgage rates — inflation needs to get closer to the central bank’s target of 2%. In March, inflation was up 3.5% year over year, according to the latest Consumer Price Index (CPI) report. This was a slightly higher increase than economists had predicted.
It’s unlikely that mortgage rates will significantly rise or fall during the spring and summer home-buying season, so you may not want to wait for rates to drop to buy a house. Instead, focus on factors you can control: Figure out how much house you can afford and improve your finances if necessary to get the lowest rate possible.
Learn more: The credit score needed to buy a house in 2024
Current mortgage rates
Mortgage rates are up across the board this week. The national average 30-year mortgage rate is 7.10%, which is 22 basis points more than last week and 71 points higher than this time in 2023.
The average 15-year mortgage rate is 6.39%. This is 23 basis points higher than last week and up 63 points since a year ago.
How mortgage interest rates work
A mortgage interest rate is a fee for borrowing money from your lender, expressed as a percentage. You can choose from two types of rates: fixed or adjustable.
A fixed-rate mortgage locks in your rate for the entire life of your loan. For example, if you get a 30-year mortgage with a 6.75% interest rate, your rate will stay at 6.75% for the entire 30 years unless you refinance or sell.
An adjustable-rate mortgage locks in your rate for a predetermined amount of time, then changes it periodically. Let’s say you get a 7/1 ARM with an introductory rate of 6%. Your rate would be 6% for the first seven years, then the rate would increase or decrease once per year for the last 23 years of your term. Whether your rate goes up or down depends on several factors, such as the economy and housing market.
At the beginning of your mortgage term, most of your monthly payment goes toward interest. Your monthly payment toward principal and interest stays the same throughout the years — however, less and less of your payment goes toward interest, and more goes toward the mortgage principal or the amount you originally borrowed.
Learn more: 5 strategies to get the lowest mortgage rates
Which mortgage term length should you get?
A 30-year fixed-rate mortgage is a good choice if you want a lower mortgage payment and the predictability that comes with having a fixed rate. Just know that your rate will be higher than if you choose a shorter term and will result in paying significantly more in interest over the years.
You might like a 15-year fixed-rate mortgage if you want to pay off your mortgage quickly and save money on interest. These shorter terms come with lower interest rates, and since you’re cutting your repayment time in half, you’ll save a lot in interest in the long run. But you’ll need to make sure you can comfortably afford the higher monthly payments that come with 15-year terms.
Read more: How to decide between a 15-year and 30-year fixed-rate mortgage
An adjustable-rate mortgage could be good if you plan to sell before the introductory rate period ends. Adjustable rates usually start lower than fixed rates, but there’s always the chance that the rate will increase once the rate-lock period is over. But if you get a 10/1 ARM, for example, and plan to sell before the 10-year period is up, you get to enjoy a lower rate and monthly payment without worrying about your rate increasing later.
Expert predictions for mortgage rates in 2024
In Fannie Mae’s latest rate forecast, the government-sponsored enterprise said it expects 30-year fixed rates to end 2024 at 6.4%. This is less optimistic than its February forecast when Fannie Mae expected rates to dip to 5.9% by the end of the year.
When the Federal Reserve lowers the federal funds rate, mortgage rates typically go down in response. However, according to the CME FedWatch Tool, there’s roughly a 98% chance that the Fed will not lower its rate at the central bank’s next meeting on May 1. So we probably won’t see significant changes anytime soon. If you’re ready to buy a house but holding out for rates to plummet first, it might not be worth the wait.
Learn more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards
Daily average mortgage rates jumped to their highest level since last November after last week’s disappointing inflation report
SEATTLE, April 18, 2024–(BUSINESS WIRE)–(NASDAQ: RDFN) —The median U.S. home-sale price increased 5% from a year earlier during the four weeks ending April 14, bringing it to $380,250—just $3,095 shy of June 2022’s all-time high. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
The average daily mortgage rate this week surpassed 7.4%, the highest level since last November, after a hotter-than-expected inflation report and the Fed’s confirmation that interest-rate cuts will be delayed. The combination of high mortgage rates and prices have brought homebuyers’ median monthly housing payment to a record $2,775, up 11% year over year.
There are signals that buyers are out there touring homes despite rising rates. Mortgage-purchase applications are up 5% week over week, and Redfin’s Homebuyer Demand Index—a measure of requests for tours and other buying services from Redfin agents—is near its highest level in seven months. Chen Zhao, Redfin’s economic research lead, said some house hunters are hoping to buy now because they’re concerned rates could rise more, and others have grown accustomed to elevated rates and pushed down their home-price budget accordingly.
“Home sales are slower than usual, but there are still people buying and selling because if not now, when?” said Connie Durnal, a Redfin Premier agent in Dallas. “I’ve had a few prospective buyers touring homes for the last several years, since mortgage rates started going up, and they wish they would have bought last year because prices and rates are even higher now. My advice to them: If you can afford to and you find a house you love, buy now. There’s no guarantee that rates will come down soon.”
For more of Redfin economists’ takes on the housing market, including how current financial events are impacting mortgage rates, please visit Redfin’s “From Our Economists” page.
Leading indicators
Indicators of homebuying demand and activity
Value (if applicable)
Recent change
Year-over-year change
Source
Daily average 30-year fixed mortgage rate
7.41% (April 17)
Up from 7% one month earlier; highest level since November 2023
Increased 5% from a week earlier (as of week ending April 12)
Down 10%
Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)
Up 8% from a month earlier (as of week ending April 14)
Down 11%
Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Touring activity
Up 33% from the start of the year (as of April 14)
At this time last year, it was up 23% from the start of 2023
ShowingTime, a home touring technology company
Google searches for “home for sale”
Unchanged from a month earlier (as of April 14)
Down 17%
Google Trends
Key housing-market data
U.S. highlights: Four weeks ending April 14, 2024
Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
Four weeks ending April 14, 2024
Year-over-year change
Notes
Median sale price
$380,250
4.7%
Median asking price
$413,225
6.4%
Biggest increase since Oct. 2022; all-time high
Median monthly mortgage payment
$2,775 at a 6.88% mortgage rate
10.6%
All-time high
Pending sales
86,086
-2.3%
New listings
93,332
10.8%
Active listings
832,748
9.6%
Months of supply
3.3 months
+0.4 pts.
4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions.
Share of homes off market in two weeks
42.6%
Down from 44%
Median days on market
35
-1 day
Share of homes sold above list price
29.2%
Essentially unchanged
Share of homes with a price drop
5.9%
+1.6 pts.
Average sale-to-list price ratio
99.2%
+0.2 pts.
Metro-level highlights: Four weeks ending April 14, 2024
Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
Metros with biggest year-over-year increases
Metros with biggest year-over-year decreases
Notes
Median sale price
Anaheim, CA (24.8%)
Providence, RI (14.6%)
Nassau County, NY (14.3%)
West Palm Beach, FL (13.5%)
New Brunswick, NJ (13.1%)
San Antonio, TX (-1%)
Declined in just 1 metro
Pending sales
San Jose, CA (25.6%)
San Francisco (11.2%)
Oakland, CA (7.1%)
Columbus, OH (6.7%)
Seattle (6.4%)
Nassau County, NY (-14.9%)
Atlanta (-13.6%)
Houston (-11.6%)
Riverside, CA (-10.8%)
Fort Lauderdale, FL (-10%)
Increased in 14 metros
New listings
San Jose, CA (46.6%)
Sacramento, CA (27.6%)
Phoenix (27.4%)
Jacksonville, FL (27.2%)
Dallas (22.9%)
Newark, NJ (-12.4%)
Providence, RI (-6.3%)
Milwaukee (-4.6%)
Chicago (-4.5%)
Detroit (-3.1%)
Declined in 9 metros
To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-home-prices-mortgage-rates-increase
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country’s #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release distribution list, email [email protected]. To view Redfin’s press center, click here.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240418348073/en/
Mortgage rates posted a big jump last week after Wednesday’s release of a higher-than-expected inflation report.
As a result, HousingWire’s Mortgage Rates Center showed the average 30-year fixed rate for conventional loans at 7.24% on Tuesday, up from 7.16% one week earlier. That’s roughly 40 basis points above the rate at the start of the year. At the same time one year ago, the 30-year fixed rate averaged 6.42%. Meanwhile, the 15-year fixed rate averaged 6.64% on Tuesday, up from 6.41% one week earlier.
As the market enters the peak homebuying season, last week’s above-consensus inflation figures brought the mortgage market back to a sour reality: The average 30-year fixed mortgage rate may be close to or above the 7% level for longer than previously expected.
“As mortgage rates increase, it’s never good news for the housing market, especially when more sellers are in the mix,” HousingWire lead analyst Logan Mohtashami said. “We saw a bounce in demand early in the year as rates fell. However, just like last year, when mortgage rates headed higher, it limits sales growth.”
As of April 12, there were 526,000 active single-family listings on the market, up 2.6% from the previous week, according to Altos Research. This uptick in inventory is a function of high and rising mortgage rates, according to Mike Simonsen, founder and president of Altos Research.
Additionally, there were 66,000 new listings unsold last week plus another 20,000 immediate sales for 86,000 total new listings, up 32% from the same week a year ago.
Last week, the U.S. Bureau of Labor Statistics reported that consumer prices were up 3.5% in March compared to a year earlier. Investors reacted by adjusting their expectations for the number of rate cuts from the Federal Reserve this year.
At the end of 2023, many investors anticipated six rate cuts for the year. A few weeks ago, three cuts became the expected norm. Now it’s two or fewer cuts, and some experts — like former Treasury Secretary Lawrence Summers — have included a rate hike in their scenarios, although the likelihood of that remains low.
In remarks made Tuesday in Washington, D.C., Federal Reserve Chair Jerome Powell said that multiple measures of inflation will need to move “sustainably toward 2% before it would be appropriate to ease policy.“
“That said, we think policy is well positioned to handle the risks that we face,“ Powell said. “If higher inflation does persist, we can maintain the current level of restriction for as long as needed. At the same time, we have significant space to ease should the labor market unexpectedly weaken.”
This report was updated to include comments from Federal Reserve Chair Jerome Powell.
Because of certain persistent reputational challenges faced by the reverse mortgage industry, it can be challenging for borrowers to find objective informational sources about the product category.
That’s what drove a listener of the podcast “The Indicator from Planet Money,” a production of National Public Radio (NPR), to ask hosts Wailin Wong and Darian Woods about the product during a recent episode.
“I was wondering if you guys could explain reverse mortgages,” the listener asked the group. “I’m trying to understand all things housing with the market being so crazy these days.”
Wong and Woods introduced the segment by talking about notable reverse mortgage ad spokesmen like Tom Selleck and Henry Winkler, before offering an overview of the Home Equity Conversion Mortgage (HECM) product backed by the Federal Housing Administration (FHA).
“[A] reverse mortgage is a loan where you can borrow money against the value of your house,” Woods explained. “So, the house’s title is still in your name, but you’re receiving payments while you start to owe more and more to the lender.”
Woods went on to explain the factors that determine the loan’s proceeds, including interest rates, the home’s value and age of the primary borrower.
“But theoretically, a borrower could get anything from a few hundred dollars to a few thousand tax-free dollars a month while also not needing to pay their mortgage,” he said.
The pair then discussed the perceptions of the products, with Wong asking if it was “too good to be true.” Woods said that such a loan isn’t “free money,” but added that it could be a viable solution for the right borrower.
“It is definitely appealing to folks who are strapped for cash day to day, but their home is maybe the only big asset that they have. But we should mention reverse mortgages don’t have the best reputation,” he said.
The show then played audio from a segment on “The Daily Show” that aired last year, which took a flippant look at reverse mortgages without an abundance of factual rigor, saying that most reverse mortgages end “with you losing your house, or dying and losing your house, or dying and losing your house and saddling your kids with debt.”
Woods, however, was quick to specify the context.
“This is a bit of an exaggeration for comedic effect,” he said. “Debt doesn’t go across generations, but it is up to whoever managed the estate to figure out how to pay this debt back. And usually, it’s by selling the house.”
The pair then asked Cora Hume with the Consumer Financial Protection Bureau(CFPB) to weigh in. Hume said that reverse mortgages can be expensive compared to other home equity-tapping tools.
“A lot of older adults are very surprised about how quickly the amount they owe grows and how quickly their equity that they have in their home decreases,” Hume said on the show.
Woods also cited a 2023 CFPB report that said a majority of reverse mortgage direct-mail advertising is sent to “more financially vulnerable consumers, those of low or moderate income.”
Woods ended the segment by reiterating that reverse mortgages can work for people in the right situation, with Wong adding “people should do their homework” and “read the fine print.”
Reverse mortgage industry professionals have spoken for months about the consequences of high interest rates on their ability to pursue business, and now AARP has taken a closer look at the impacts.
While higher rates are bad news for the mortgage industry in a broad sense, the impact on reverse lending is more nuanced, Bruce Simmons of American Liberty Mortgage in the Denver area explained to AARP.
“If a reverse mortgage can help your situation, it still makes sense for a lot of people,” Simmons told the organization. “There are so many people who can benefit from this today, even with the rates the way they are.”
These sentiments echo what Simmons shared with RMD at the beginning of this year when asked about how business is progressing after the general tumult observed in 2023. Inconsistent interest rate forecasts have made things challenging in his business, but different kinds of marketing — including a refocusing exercise on his existing marketing efforts — have helped to improve things, Simmons told RMD in February.
But a rise in interest rates also impacts the amount of money owed on the negatively amortizing loan, observed Stephanie Moulton, a longtime reverse mortgage academic researcher from Ohio State University.
“It might accelerate the growth of the balance and reduce, potentially, the equity when your heirs go to sell the home, because your balance is going to grow faster,” she told AARP.
But the utility of eliminating a forward mortgage payment still has the potential to add value for reverse mortgage borrowers, along with a raft of disbursement options such as a standby line of credit or monthly term payments, Simmons added.
Bruce McClary, senior vice president of the National Foundation for Credit Counseling (NFCC) also shared that while reverse mortgages can add value for borrowers in certain situations, the fee structure of a home equity line of credit (HELOC) could potentially make more sense for some seniors. But certain situations may make a reverse mortgage a better idea for some individual borrowers.
“[It] depends on an individual’s capacity to borrow, the reasons for borrowing and what they’re going to use the money for,” McClary told AARP. “The answers will be different depending on people’s financial circumstances and their goals.”