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ATTOM: Mortgage Market Might Not Be Cooling, But it Has Reversed Course
Fri, 03 Dec 2021 21:25:37 GMT

A new report from ATTOM says that the number of mortgage originations dropped sharply in the third quarter. The company says there were 3.59 million residential mortgages originated during that period, a 3,2 percent increase over the 3.48 million during the same quarter in 2020, but an 8.4 percent decline from the 3.92 million originations in the second quarter of 2012, the largest quarterly dip in more than a year. The quarter-over-quarter slide followed another in Q2 and marked the first time in more than two years that total lending decreased in two consecutive quarters. ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

TILA Appraisal Exemption Threshold Moves Higher
Thu, 02 Dec 2021 16:26:03 GMT

Like a rising tide, rising prices are pushing a lot of other financial elements higher. Earlier this week surging home prices drove a near $100K increase in conforming loan limits, now regulators have raised the dollar threshold for an exemption to the Truth in Lending Act (TILA) based on rising wages. Section 129H of TILA establishes special appraisal requirements for "higher-risk mortgages," termed "higher-priced mortgage loans" or "HPMLs" in the agencies' regulations. The Consumer Financial Protection Bureau (CFPB), the Federal Reserve Board, and the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Federal Housing Finance Agency (FHFA) jointly issued final rules implementing these requirements, effective January 18, 2014. The rules, however, exempted several loan types from the appraisal requirements, among them transactions of $25,000 or less. The rule allowed for annual adjustments of that amount and this year the threshold was $27,200.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Residential Construction No Longer Dominating Spending
Wed, 01 Dec 2021 21:55:13 GMT

National spending on construction spending rose slightly in October, but for the second month in a row, the increase wasn't driven by the residential sector. The U.S. Census Bureau reported that construction put in place during the month was at a seasonally adjusted annual rate of $1.598 trillion, an 0.2 percent increase from September and up 8.6 percent compared to October 2020. On a non-adjusted basis, spending totaled $141.911 billion, down from $145.746 billion in September. For the year-to-date (YTD) spending totals $1.373 trillion, 7.5 percent more than the $1.231 spent to the same point in 2020. Privately funded construction fell by 0.2 percent from the previous month to a seasonally adjusted rate of $1.245 trillion. This represents an 11.1 percent increase from the prior October....(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Rates Rise, Refi Share Drops to Eight Month Low
Wed, 01 Dec 2021 16:05:05 GMT

Thanksgiving week, a three-day business week for many, saw the usual sharp decline in mortgage activity although purchase applications remained seasonally strong. The Mortgage Bankers Association (MBA) says its Market Composite Index, a measure of mortgage application volume, fell 7.2 percent on a seasonally adjusted basis from one week earlier and was down 37 percent on an unadjusted basis. The Refinance Index decreased 15 percent during the week which ended November 26 and was 41 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 59.4 percent of total applications from 63.1 percent the previous week. It was the lowest share for refinancing since early April. The seasonally adjusted Purchase Index increased 5 percent week-over-week. The unadjusted Purchase Index decreased 30 percent compared with the previous week and was 8 percent lower than the same week one year ago.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Mortgage Profits Rebound from Q2 Slide
Tue, 30 Nov 2021 17:55:05 GMT

While the profits were nowhere near 2020 levels, independent mortgage banks and mortgage subsidiaries of chartered banks reported their third quarter 2021 gains did improve on those in Quarter 2. The report from the Mortgage Bankers Association (MBA) on mortgage bankers' performance showed an average net gain of $2,594 on each loan that was originated during the quarter. This was up from a reported gain of $2,023 per loan in the second quarter of 2021, Total production revenue (fee income, net secondary marking income and warehouse spread) increased to 396 basis points (bps) in the third quarter, up from 375 bps in the previous period. This equated to $11,734 per loan compared to $10,691 in Q2. Net secondary marketing income increased to 310 bps from 297 bps or $9,300 per loan compared to $8,500. The average pre-tax production profit was 89 bps in the third quarter of 2021, up from an average net f 73 bps in the second quarter of 2021, and down from 203 basis points on a year-over-year basis. Over the period stretching from the third quarter of 2008 to the Q3 of 2021 pre-tax production profits averaged 56 basis points....(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

2022 Conforming Limits Rise 18 Percent to $647,200
Tue, 30 Nov 2021 17:52:37 GMT

The new conforming loans limits for mortgages that can be acquired by Fannie Mae and Freddie Mac were announced this morning by the Federal Housing Finance Agency (FHFA). As expected, the changes reflect the nearly unprecedented price gains over the last year. Earlier today FHFA posted third quarter changes in its Housing Price Index (HPI). Between the third quarter of 2020 and 2021 the expanded-data index (slightly different than the regular HPI) had grown by an average of 18.05 percent. The baseline conforming limit will be higher by that same percentage. The limit for single-family residential units in most U.S. counties, effective January 1, 2022, will be $647,200. This is an increase of $98,950 from the $548,250 limit this year. The baseline limit for properties containing two units will be $828,700 and for three-units, $1,001,650. A loan for a four-unit dwelling in most counties will be limited to $1,244,850....(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Case-Shiller Calls "Deceleration" its September Keyword
Tue, 30 Nov 2021 16:29:02 GMT

The old adage about waiting for the kettle to boil could be applied to the widely predicted deceleration of home price appreciation. It seems to be happening, but it isn't fast. The S&P CoreLogic Case-Shiller price indexes showed slightly lower monthly and annual gains in September than in August while the Federal Housing Finance Agency's (FHFA's) House Price Index (HPI) was unchanged from the previous report on an annual basis but down fractionally month-over-month. Case-Shiller's National Home Index, covering all nine U.S. census divisions, reported a 19.5 percent annual gain in September, down from 19.8 percent in August. The 10-City Composite grew by 17.8 percent compared to 18.6 percent in the previous month and the 20-City Composite posted a 19.1 percent year-over-year gain, a half-point below the August appreciation rate.    ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Pending Sales Shoot Up, Realtors View Increase as Defensive
Mon, 29 Nov 2021 16:05:48 GMT

The number of signed contracts for the purchase of existing homes made another significant about face in October. The National Association of Realtors® (NAR) said its Pending Home Sales Index (PHSI), a measure of those new contracts, increased 7.5 percent from September to a reading of 125.2. The index had recovered from three straights months of losses in August, rising 8.1 percent, only to slip back in September by 2.3 percent. The increase still left the PHSI behind the index level of a year earlier by 1.4 percent. Analysts had expected the index to rise, but by a much more modest amount. Those polled by Econoday had a consensus estimate of a 0.7 percent gain. Forecasts ranged from a 1.0 percent decline to growth of 2.9 percent.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Delinquencies Still Double Pre-Pandemic Rate
Fri, 26 Nov 2021 15:40:49 GMT

Freddie Mac reported this week that its total mortgage portfolio increased at an annualized rate of 15.7 percent in October compared to a 17.4 percent gain in September. The portfolio balance at the end of the period was $3.179 trillion compared to $3.137 trillion the prior month and $2.669 trillion a year earlier. Purchases and Issuances totaled $109.333 billion, and Sales were ($855) billion. The September numbers were $112.333 billion, and ($498) billion, respectively. Single-family refinance loan purchase and guarantee volume was $59.1 billion in October compared to $59.8 billion in September, representing a 60 percent share of total single-family mortgage portfolio purchases and issuances, up from 58 percent in both August and September.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Refinance Share Increases as Borrowers Try to Outguess Fed
Wed, 24 Nov 2021 18:51:30 GMT

The Mortgage Bankers Association (MBA) reports that the volume of loan applications submitted during the week ended November 19 increased slightly, continuing the weekly up and down pattern that has prevailed since the beginning of October. MBA says its Market Composite Index, a measure of that volume, increased 1.8 percent on a seasonally adjusted basis from one week earlier and was 0.1 percent higher on an unadjusted basis. The Refinance Index increased 0.4 percent from the previous week and was 34 percent lower than the same week one year ago. Refinancing's share of mortgage activity increased to 63.1 percent of total applications from 62.9 percent the previous week. The seasonally adjusted Purchase Index rose 5 percent from one week earlier, but volume was down 0.4 percent on an unadjusted basis from the previous week and was 4 percent lower than the same week one year ago....(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

New Home Sales Rose in October. Sort of.
Wed, 24 Nov 2021 15:47:13 GMT

New home sales improved slightly on the unexpected, reported surge in September and still managed to disappoint. The U.S. Census Bureau and the Department of Housing and Urban Development report that sales of new single-family homes ticked up 0.4 percent in October to 745,000 seasonally adjusted annual units but that change was from a downwardly revised September rate of 742,000 units. September's sales were originally reported at an 800,000 rate. October's sales were 23.1 percent below the October 2020 rate of 969,000. Analysts polled by Econoday had expected a much better outcome. They had a consensus of 745,000 based on estimates that ranged from 735,000 to 820,000 units.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Existing Home Sales Rise Slightly but Inventory Tightens Again
Mon, 22 Nov 2021 16:11:31 GMT

Existing home sales moved higher in October, the second consecutive month of growth. The National Association of Realtors® (NAR) said sales of pre-owned single-family houses, townhomes, condos and cooperative apartments was at a seasonally adjusted annual rate of 6.34 million units.  This was 0.8 percent higher than the rate of 6.290 million in September but 5.8 percent below the 6.73 million rate a year earlier. Single-family home sales increased 1.3 percent from 5.59 million in September to a seasonally adjusted annual rate of 5.66 million, but this lagged the October 2020 sales by 5.8 percent. Condo and co-op sales fell 2.9 percent month-over-month to 680,000 units and were 5.6 percent lower an on annual basis. Sales were slightly higher than estimated by analysts polled by Econoday and Trading Economics. Both had projected a consensus of a 6.2 million rate.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Fannie Mae Sees Supply Chain, Inflation as Economic and Housing Risks
Fri, 19 Nov 2021 17:45:03 GMT

The ink wasn’t dry on Fannie Mae’s October economic forecast when the month’s Consumer Price Index (CPI) was published showing an inflation rate two-tenths higher than the company’s economists had predicted. Fannie Mae’s November forecast now says their already upwardly revised Q4 2021 forecasts of 6.2 and 4.6 percent for annual topline and core CPI respectively, are likely too low and they think a longer lasting inflationary period is now more likely. This leads them to conclude the Federal Reserve will stop purchasing securities for their portfolio by mid-year and begin raising the Federal Funds rate target in the fourth quarter of 2022. They continue to expect 4.8 percent growth this year, 3.7 percent in 2022, and in their first forecast for 2023, they expect a GDP of 2.1 percent and an unemployment rate of 3.7 percent. They also expect both the CPI and the core level to be near 3.0 percent by the end of 2023 and that the Fed will hike their funds rate in 25-basis point increments starting in the fourth quarter of next year. They see little possibility that those increases will start while the Fed is still tapering security purchases but are open to the possibility that tapering will be accelerated.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Refinancing Share Dominated September Originations
Thu, 18 Nov 2021 16:22:51 GMT

Refinancing continued to account for the largest share of mortgage originations in September, 53 percent of the total compared to 52 percent in October. ICE Mortgage Technology's Origination Insights Report said this was the largest share for refinancing since last April. Conventional loans continue to be the overwhelming choice of borrowers, accounting for 80 percent of originations during the month, unchanged from August. The shares of FHA and VA loans, 12 percent and 5 percent, respectively, are also the same as in August. The time to close a purchase loan increased from 49 days to 50 days which accounted for an increase of one day in all closing times, to 47 days. The time to close also increased for each loan type by one day compared to August, to 52 days for FHA loans, 46 days for conventional, and 53 days for VA loans. All increases were due to longer purchase timelines....(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Housing Starts Flatten, Permits Promise Future Improvement
Wed, 17 Nov 2021 15:31:30 GMT

Residential construction numbers were mixed in October. The U.S. Census Bureau and Department of Housing and Urban Development report an increase in construction permits but a small decline in construction starts. Overall, however, both single-family and multi-family production are running well ahead of their 2020 results. Permits for residential construction were issued at a seasonally adjusted annual rate of 1.650 million compared to 1.586 million in September, an increase of 4.0 percent. The September rate was a slight downward adjustment from the 1.589 million units originally reported. The October permit rate was 3.4 percent above the pace in October 2020.  ...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

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