Home Equity Gains Unlikely in 2021 As Delinquencies Expected to Rise

Home price growth is expected to slow over the next 12 months as delinquencies rise, according to new data from CoreLogic. This comes despite the rise in equity American homeowners enjoyed during the second quarter of 2020. Despite the strong home-purchase activity in Q2, unemployment is expected to remain high for the rest of the year, thereby slowing home price growth and increasing delinquencies. Delinquent mortgages are home loans for which borrowers have failed to make timely payments as stipulated by the loan documents. Typically, delinquent mortgages are those where the payments are 90…continue reading →

South Leads New-Home Sales in August

New-home sales in the closing week of August are at a far higher level than expected. This is largely due to really attractive mortgage rates. Riding on a very high demand in the South, new single-family homes sold 4.8% more than the last month, corresponding to an annualized pace of 1 million. This is about 12.25% higher than the expectation of economists, according to the Bloomberg survey.  The Bloomberg data is the freshest in the line of data emphasizing the current momentum in real estate. Not only are the people being attracted by…continue reading →

Mortgage Rates Come Up, Could Go Down Again

Freddie Mac believes that the mortgage rates that have climbed by three basis points could come down near record lows shortly. Freddie Mac's chief economist, Sam Khater, stated in a press release that the "Mortgage rates set several record lows over the last few months and have remained low into September. While there is room for rates to decrease even more, higher home prices and low inventory could potentially stifle the high demand that we've been seeing." For the week closing on 24 Sep, the 30-year fixed-rate mortgage sat at an average of…continue reading →

Ginnie Mae Proves to be the Forbearance Exception

The number of borrowers on the Coronavirus-forbearance are down but the Ginnie Mae market is proving to be an exception to the rule. The weekly report of the Mortgage Bankers Association for the week closing Sep 13 revealed a drop of 8 basis points for loans under forbearance. However, Ginni Mae’s securitized loans inched up by 3 basis points over the same period.  Ginnie Mae’s hike in forbearance share implies a retardation in the job market’s comeback, believes Mark Fratantoni, the Chief Economist of MBA. Covid-19 has thrown off-kilter the main clients of…continue reading →

Digital Closing Helpful but Chinks Remain

Remote online notarization (RON) has been on a high since the pandemic hit the town. Digital closings have allowed the housing industry to operate in times of social distancing and lack of in-person contact. However, Kimberly Smathers, Snapdoc’s Head of Information Security and Compliance stated during National Mortgage News Digital Mortgage conference’s panel discussion that the growth in this new design could lead to resource-constrained new products. "Are there enough engineers to create the product?" she asked. "Is there a rigorous security process built into how that product is developed? I think that you…continue reading →

Housing Starts in August Spoil July’s Optimism

Housing starts have performed below expectations in August, signaling lesser construction of apartments. This does not bode well for the broader economy because the housing industry is one of the few ignitions it has in the corona-infested 2020. Residential starts have come down by 5.1% compared to July, says a government report. Bloomberg had anticipated 1.49 million but all we have managed to get in August is 1.42 million. Fewer permits, to the tune of 0.9%, have been granted in August for multifamily homes. July’s surge of 17.9% was a first of its…continue reading →

Mortgage Originations May beat 32 Years’ Record in 2020

2020 may just turn out to be a classic year for mortgage originations, feels Fannie Mae. Refinancings, riding on the back of low mortgage rates along with unexpectedly high activity in new and existing homes may see to this. Fannie Mae believes that mortgage originations in ‘20’ are likely to be close to $3.87 trillion, beating any number Fannie has tracked for the last 32 years. Doug Duncan, Fannie Mae’s Chief Economist stated in a press release that "As expected, the pace of economic recovery is slowing, but housing remains highly supportive. The…continue reading →

Affordability Rears its Head Again

Many affordable housing markets have seen a hike in home prices, making them a tough grab for the buyers, says Redfin. Daryl Fairweather, Redfin’s Chief Economist, stated in a press release that "Home price growth this high is making the housing market especially difficult for first-time homebuyers right now. Rising prices are just one more reason for people to leave expensive urban neighborhoods behind." "Price growth may slow in 2021, but even if it does, high prices are going to continue to make affordability a concern for buyers," added Fairweather. For the four…continue reading →

Mortgage Credit Availability Hits Lowest Point in Six Years

Mortgage credit availability has declined considerably, reaching the lowest point it has reached in six years, according to the Mortgage Bankers Association (MBA). The Mortgage Credit Availability Index (MCAI) dropped to 120.9 in August, which is a 60.8 point decrease from August 2019 (181.7). MCAI Trend (Source: Mortgage Bankers Association) Joel Kan, the MBA’s Vice President of economic and industry forecasting, remarked that uncertainty around the job market and its future was likely to be the reason behind tightening credit. When lending standards become tighter, fewer mortgages are available and fewer still borrowers…continue reading →

Pandemic Changes Homebuyers’ Preferences

TD Bank surveyed 380 borrowers from the South, 240 from the West, 210 from the Northeast, and 170 from the Midwest. To add, 6% of those surveyed were born in or before 1945. 39% were Millennials, and 27% from the Gen X, and 28% Baby Boomers. The 1000 borrowers, surveyed in June, provided revealing insights into how the pandemic was shifting homebuyers’ preferences. It was interesting that 7% of the respondents were keen to raise their housing expenses while 29% wished to bring down the housing payments. 64% of the respondents were just…continue reading →