Renting

Apache is functioning normally

Pending home sales fell another 7.7 percent in April according to the National Association of Realtors® (NAR). NAR’s Pending Home Sales Index (PHSI) for the month was 72.3 compared to 78.3 in March. Based on purchase contracts for previously owned single-family homes, townhouses, condominiums, and cooperative apartments, the Index was also down 7.4 percent from its level in April 2023.

“The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market,” said NAR Chief Economist Lawrence Yun. “But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.”

The slowdown in the home sale market is clear when looking at the national PHSI since the Federal Reserve started raising interest rates. The index averaged 115.2 in 2022 and 91.9 in 2023. It has not exceeded 78.5 at any point in 2024.

All four major regions lost ground for the month and year-over-year. In the Northeast, the PHSI level of 62.9 was down 3.5 percent from March and 3.1 percent on an annual basis. The Midwest index dropped 9.5 percent to 70.7 percent, a decline of 8.7 percent from one year ago.

The South lost 7.6 percent and 8.2 percent compared to the two earlier periods to a reading of 88.6. The West’s Index was at 55.9, a decline of 8.5 percent from March and 7.3 percent from the previous April.

“Home prices are hitting record highs, but the pace of gains should decelerate with more supply,” said Yun. “However, the prospect of measurable home price declines appears minimal. The few markets experiencing price declines will be viewed as second-chance opportunities for buyers to enter the market if those regions continue to add jobs.”

The PHSI is considered a leading indicator of existing home sales over the next two months. An index of 100 is equal to the level of contract activity in 2001. The NAR will release existing home sales numbers for May on June 21.

Source: mortgagenewsdaily.com

Apache is functioning normally

Breck Dumas
May 30, 2024 at 12:05 PM

Mortgage rates increased this week for the first time in a month, returning above 7% as the home affordability crisis continues to hurt demand in the housing market.

Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage rose to 7.03% this week from 6.94% last week. The average rate on a 30-year loan was 6.79% a year ago.

A “New Listing” sign outside a home in Napa, California, US, on Monday, May 6, 2024.

The average rate on the 15-year fixed mortgage also climbed to 6.36% from 6.24% last week. One year ago, the rate on the 15-year fixed note averaged 6.18%.

READ ON THE FOX BUSINESS APP

Original article source: Mortgage rates increase to 7.03%

Source: aol.com

Apache is functioning normally

Walmart’s partnership with Capital One ended after the retail giant filed a lawsuit alleging that the McLean, Virginia-based bank failed to meet certain customer service standards.

Bloomberg

The demise of the short-lived and acrimonious credit card partnership between Walmart and Capital One Financial is raising new questions about the retail giant’s ambitions to compete with banks.

The two companies announced Friday that their relationship was coming to an end, which gives  Walmart options as it seeks to get better plugged into its shoppers’ wallets. One potential avenue is to find a new bank for a run-of-the-mill credit card partnership.

The more aggressive route by Walmart would be to take on banks by becoming a one-stop financial services provider. It could do that with the help of an outside fintech firm, but analysts think it’s more likely that it will look internally through its majority-owned fintech, called One. One runs a debit card, is testing out buy now/pay later options, and, with the addition of a credit card, could be closer to becoming the financial super-app Walmart has long sought.

“It might be time for One card to rule them all,” quipped Richard Crone, head of Crone Consulting.

Walmart declined to comment on its plans. But executives at the retail giant have long been eyeing an expansion into banking services, undeterred by the company’s failed 2006 attempt to gain a bank charter.

Walmart wants to “centralize all financial solutions on one platform so it doesn’t feel like it’s 25 different things,” Julia Unger, a top Walmart’s financial services executive, said at the American Banker Payments Forum in 2022. She said the retailer’s vast shopping and payments data from its 4,600 stores and its website enables it to perform alternative underwriting on loans beyond traditional credit scores.

“The strategy isn’t to give everyone credit but give them a path to credit,” Unger said. 

In 2021, Walmart partnered with the fintech investment firm Ribbit Capital to launch what’s now known as One. The joint fintech venture made two acquisitions in 2022: the early wage access firm Even Responsible Finance and One Finance, which offered savings tools, ATM access and mobile financial tools. 

The One debit card offers 3% cash back at Walmart stores and a 5% rate on savings.

The retailer also separately offers buy now/pay later loans through a partnership with the fintech Affirm that dates back to 2019. But CNBC reported in April that One had started offering those services at some Walmart stores, raising the prospect that Walmart could scrap its Affirm partnership. 

Affirm has declined to comment on the CNBC report. Asked about the issue on a recent Morning Brew podcast, Affirm’s chief financial officer said the company’s focus is “making sure we delight the consumer and … drive better business outcomes for our merchants.”

Alex Johnson, founder of the Fintech Takes newsletter, said Walmart’s severing of ties with Capital One may be continuing the retailer’s pattern of “using partners until they can find a way to do it directly.”

To offer a credit card, Walmart would still need to partner with a bank, much like its current debit card partnership with Coastal Community Bank in Everett, Washington. But Walmart, long known as a tough negotiator, would get the flexibility to design a “more tailored set of products that prioritizes the financial health of their customers,” Johnson said. 

Big banks’ partnerships with retailers often involve a “push and pull,” Johnson said. Banks and merchants can earn more interest from customers who carry balances each month. But those customers’ higher interest payments can strain their finances — giving them less spending room to make more purchases at stores like Walmart.

Through its majority-owned fintech, Walmart can design a set of products that fits its “big and diverse customer base,” Johnson said. It could launch a higher-tier card for customers who regularly pay off their balances while directing shoppers with lower credit scores to buy now/pay later options and offering rewards-based debit cards to those who might not qualify for BNPL loans.

“In a classic co-branding model, the retailer or the merchant would have not a ton of flexibility,” Johnson said. So now some big retailers are “trying to exert a great deal more control” over their card programs, he explained.

The breakup of the Walmart-Capital One relationship followed a lawsuit in which the retailer argued that its bank partner was not fulfilling the terms of their arrangement. Walmart said last year that the McLean, Virginia-based bank “was consistently unable to meet” certain customer service standards related to payment processing, card issuance and transaction posting.

Capital One disputed Walmart’s claims, arguing that the retail giant was trying to wiggle out of a contract when it found the economic terms unpalatable. It also argued that Walmart had fallen short of its obligations to market the card to more customers.

“Walmart is positioning itself to compete directly with Capital One to provide credit and payment products to Walmart customers,” Capital One said in a court filing last year.

In March, a federal judge sided with Walmart, writing that the contract between the companies clearly dictated that the bank’s “repeated customer service failures entitled Walmart” to end the partnership.

It was not the first time that a Walmart credit card partnership went south. Capital One took over the partnership after Walmart sued its prior partner, Synchrony Financial.

Under the termination deal between Walmart and Capital One, the bank is hanging onto an $8.5 billion loan portfolio as well as servicing responsibilities.

For now, the user experience for holders of Capital One-Walmart cards will remain the same. A Capital One spokesperson said the company will “convert existing eligible Walmart Card customers” to a Capital One credit card. The bank is “actively shutting down new applications for the Walmart card” and will communicate any changes to existing customers well in advance, the spokesperson said.

Analysts who cover Capital One said that the breakup will have a small impact on the bank, since the Walmart portfolio makes up a small portion of Capital One’s total loans. If anything, the analysts were positive about the news.

Capital One will be able to “pick from the better quality customers” in the $8.5 billion portfolio, Moshe Orenbuch, an analyst at TD Securities, wrote in a research note. And rather than sharing revenues with Walmart, Capital One will get to keep all of the income from its newly converted card customers, he noted.

The fact that Walmart didn’t have another bank lined up to take over the portfolio “also speaks to the industry’s discipline” in declining to accept less-than-stellar terms, Orenbuch wrote.

If Walmart does strike out on its own, it will face the formidable challenge of managing everything that running a credit card entails — underwriting, billing, handling complaints and the vast range of rules surrounding credit card programs.

Walmart will have to close customer accounts or decline applications, perhaps risking that upset customers will end up preferring to shop at Target, said Brian Riley, a consultant and co-head of payments at Javelin Strategy & Research. And it will have to decide just how much credit risk it wants to absorb on its own balance sheet, rather than Capital One’s.

“It’s not as easy as it looks,” Riley said. “And that’s something that Walmart has to be very wary about.”

The Wall Street giant Goldman Sachs, which expanded into credit cards by partnering with General Motors and Apple, struggled in the business and has since scaled back. It’s also faced scrutiny from regulators over credit card management.

In 2021, Walmart hired two former Goldman executives who were key to its consumer push: Omer Ismail and David Stark.

Running a credit card is easier said than done, but Walmart’s sheer size helps, said Aaron Press, research director at Worldwide Payment Strategies.

“It’s hard to pull off,” Press said. “It’s a heavy lift, but they have a lot of resources.”

Source: nationalmortgagenews.com

Apache is functioning normally

Compliance, LOS, Best-Ex, MSR Valuation Products; 2nd Mortgage and Conv. Conforming News

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Compliance, LOS, Best-Ex, MSR Valuation Products; 2nd Mortgage and Conv. Conforming News

By:
Rob Chrisman

1 Hour, 27 Min ago

Hey, there is plenty of competition among lenders and among vendors. But, to the best of my knowledge, vendors and lenders aren’t doing this to one another. “There oughta be a law against it!” At the MBA Secondary Conference last week, MBA CEO Bob Broeksmit railed about the regulatory knots that bind the mortgage industry. Attorney Brian Levy agrees that’s a big problem, but disagrees with Bob’s solution in his Mortgage Musings. (Levy also gives some more thoughts on the CFPB funding case.) Regulations, and complying with them, certainly add to the cost of home loans, which in turn are passed onto borrowers of course. For lenders, cutting costs is a full-time gig. The biggest cost, of course, is personnel and LO comp, usually for several thousand dollars per loan. Of course, business models factor into it… How do you produce a loan? What about orginators who aren’t productive? Paying producers who do one loan a quarter… The money has to come from somewhere. (Found here, this week’s podcasts are sponsored by American Financial Resources, the mortgage lender that’s shaking things up by streamlining processes, bringing on the best humans in the business, and putting the customer experience front and center. Hear an interview with Angel Oak’s Tom Hutchens on how loan originators can navigate a competitive market with the increasing demand for niche products like non-QM loans and bank statement HELOCs.)

Training, Products, and Software

“In the movie ‘The Matrix,’ Trinity reminded Keanu Reeves’ character, ‘The answer is out there, Neo, and it’s looking for you, and it will find you if you want it to.’ Chances are she was not talking about MSR valuations, but we are. This is your sign to unlock the “MSR Matrix,” and join Optimal Blue on June 5 at 1 p.m. CT for our MSR 101: How to Value the MSR Asset webinar. MSR experts Vimi Vasudeva, Brad Eskridge, and Tony Paciente will discuss the different assumptions that factor into MSR valuations and how MSR assets can help you optimize profitability. Attendees will gain a thorough understanding of the asset from a valuation perspective, along with the differences between various valuation approaches. It’s time to optimize your MSR assets and retain the most profitable loans in your pipeline. Don’t be a glitch: register for the webinar today!”

The Base Rate Generator is a tool that helps mortgage lenders generate rate sheets in their pricing engine using back-end pricing. It’s as simple as going to the rate sheet tab in MCTlive! and clicking Generate.” In this latest video, MCT’s Director of Product & Pricing, Luke Chang, describes key features of the Base Rate Generator, including specs being passed through the aggregator rate sheet, the best execution process, and advanced granularity benefits. By combining live agency API connections, co-issue executions, aggregator pricing, and custom TBA indications, the MCT Base Rate Generator allows mortgage lenders to improve margin management and competitive performance. Originators interested in learning more about the industry-first features included in Base Rate Generator should register for the upcoming webinar on June 4th.

Vaporware. That’s when you’re sold software that doesn’t end up delivering a fraction of what was promised. Want to supercharge your LOS with software that delivers? Read these reviews on the ICE Mortgage Technology™ Marketplace.

Compliance Experts Report on Q2 2024 Mortgage Compliance Outlook! Join ACES Quality Management’s EVP of Compliance, Mandy Phillips and Ballard Spahr’s Richard J. Andreano, as they share their expert knowledge on the hot topics of mortgage compliance. on June 6th at 11:00AM PDT as they discuss the Supreme Court update and Townstone, FTC banning of non-compete agreements, CFPB view of UDAAP abusive prong, and a Fair lending update. Reserve your spot.

Conventional Conforming Pricing and Processing Changes

Fannie Mae updated Selling and Servicing Guide pages. All topics have new URLs, with temporary redirects in place until January 2025. To avoid disruptions, please update your bookmarked links as soon as possible.

Fannie Mae posted the May Appraiser Quality Monitoring (AQM) list to Fannie Mae Connect. The monthly list will also be available on the AQM page through July 30, 2024, when Fannie Mae Connect will be required for viewing.

On May 19, the 2024 area median incomes (AMIs) were implemented in Desktop Underwriter® (DU®), Loan Delivery, and the Area Median Income Lookup Tool. At a FIPS-level, 79.6 percent of AMIs increased for 2024, meaning more borrowers may meet AMI requirements. AMI is also used to determine eligibility for certain loan-level price adjustment (LLPA) waivers. Lenders may use this information to determine income eligibility for HomeReady and other loans with AMI requirements. Read the Fannie Mae Selling Notice for additional information.

Pennymac Announcement 24-52 describes Conventional LLPAs update effective for all Best Efforts Commitments taken on or after Friday, May 24, 2024.

AmeriHome Mortgage posted a reminder in 20240513-CL Product Announcement as to the GSEs recently published policy updates related to property insurance requirements. Sellers are reminded that these changes are effective for all Mortgage Loan applications taken on or after June 1, 2024, but are encouraged to implement these changes earlier.

Second Mortgage Programs

The word during the recent capital markets conference was that investors and large lenders will continue to rollout HELOC and 2nd mortgage products. There’s so much equity out there! For example…

Closed-End Seconds (Fixed Rate Home Equity Seconds) are available through Pennymac TPO. While the Pennymac Correspondent Group (PCG) does not currently offer the product, approved PCG clients are eligible to obtain it through its wholesale division, Pennymac TPO. PCG stated they are seeing rates for Fixed Rate Home Equity Seconds mostly in the 8.5-9.5 percent range while they offer a dedicated rate sheet specific to second mortgages that does not expose pricing on other products. Guidelines are straightforward and an appraisal is not required in many cases. You can sign up to broker the product in a few simple steps. Login to P3 for more information.

Recently, Plaza Home Mortgage® rolled out a new program that can significantly benefit your borrowers. Plaza’s Closed-End Seconds program is tailored to help borrowers tap into their property’s equity without affecting their existing first mortgage offering substantial cash-out potential, providing your borrowers with the means to enhance their financial stability. Please note, this program is available in all states except Texas.

Capital Markets

Fixed-income security prices, and therefore interest rates, are driven by supply and demand. The main news this week as far as capital markets staff are concerned has been lackluster sales of new Treasury notes and bonds. Tuesday brought a lousy bond auction of 5-year notes, which sent the 10-year yield back above 4.5 percent. The U.S. Treasury completed this week’s note auction slate yesterday with a poorly received $44 billion 7-year note offering, which pushed the 10-year yield to a monthly high at 4.64 percent.

Like Tuesday’s 5-year auction, the 7-year auction tailed 1.3 basis points, which means that the buyers who barely got the bonds paid much less than the others, a sign of weak demand. As a quick reminder, a “tail” is the difference between the average price and the cut-off price (the lowest price that a bond is sold for). Put another way, a tail indicates a difference between the yield in the auction and the yield in pre-auction trading, meaning that the Treasury had to offer a premium to entice investors to buy the debt.

Both the weak demand for Treasuries and hawkish Fed “speak” this week has forced investors to pivot toward “risk-off” mode, which has pushed rates higher. Yesterday traders also sifted through the Fed’s latest Beige Book, which said economic activity continued expanding from April to mid-May at an uneven pace with most Districts reporting slight or modest growth. Retail spending was little changed while auto sales were also essentially flat. Travel and tourism improved while demand for non-financial services also grew. Lending growth remained constrained by high rates and tight standards, though housing demand rose modestly. The release comes on the heels of Minneapolis Fed President Kashkari saying earlier in the week that Fed policymakers haven’t entirely ruled out rate hikes.

Mortgage rates certainly impact overall origination volume. If you recall, we learned last week that existing home sales fell 1.9 percent in April as higher mortgage rates reduced demand and forced some potential buyers to the sidelines. Supply grew to 3.4 months’ worth over the course of the month, which is up from 3.0 months’ in February. New home sales fell 4.7 percent during the month and new home supply was up to 9.1 months.

Anecdotal data suggest that builders have once again stepped up their use of incentives and interest rate buydowns to lure buyers back to the market. That comes as messaging from the Fed continues to reiterate the “higher for longer” mantra, as it is taking longer than anticipated for FOMC members to gain confidence that inflation is on a sure path to two percent. If there is a rate cut this year, it will likely not be until the fourth quarter.

The second look at Q1 GDP (+1.3 percent) kicked off today’s economic calendar. Real GDP growth in the first quarter of 2024 was expected to be revised lower to 1.4 percent in the second estimate’s release, from 1.6 percent originally, reflecting downward revisions to consumer spending. The GDP Price Index was +3.0 percent on an annualized basis, slightly lower than expected. Core PCE was +3.6 percent, as expected. Initial Jobless Claims were +219k, also about as expected. Overall, there were no surprises.

Later today brings the Pending Home Sales Index for April, Freddie Mac’s Primary Mortgage Market Survey, and two Fed speakers are currently scheduled: New York President Williams and Dallas President Logan. We begin the day with Agency MBS prices slightly better than Wednesday’s close, the 10-year yielding 4.59 after closing yesterday at 4.62 percent, and the 2-year at 4.95.

Employment

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

Kind Lending appointed 40-year industry vet Tammy Richards as its new Chief Operating Officer. (She remains the CEO of LendArch, a consulting firm she founded in 2021.) Tammy will “leverage her deep industry expertise and proven history of success to oversee all operational aspects of the company. Her focus will be on scaling Kind Lending’s infrastructure and processes to support its rapid growth while ensuring the company upholds its commitment to social impact.”

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

The big and bummer news this week:

Interest rates remain at a 23-year-high, and they’re likely to stay that way for longer than anticipated.

The Federal Reserve met earlier this week and, unlike some earlier expectations, decided to hold rates steady. While the Fed typically meets every 6.5 weeks (8 times a year), they’re expected to maintain this stance for several upcoming meetings.

This shift comes as a surprise. Back in January, analysts and investors predicted a decrease in rates by now. Discussions even centered on whether the drop would happen in Q2 vs. Q3.

Nobody is talking about that anymore.

Inflation hasn’t cooled as much as hoped. As of March, the consumer price index stood at 3.5 percent, well above the Fed’s target 2 percent. (April’s CPI data will become available on May 15).

The Fed released a statement on Wednesday citing “a lack of further progress toward the Committee’s two percent inflation objective” in their decision to hold rates steady.

Until inflation drops, interest rates are likely to stay high.

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High interest rates are keeping both homeowners and renters in a bind.

Homeowners Handcuffs vs. Tenant Trifecta

The rapid rise in interest rates is creating a logjam in the housing market.

The national average 30-year fixed rate on a mortgage is 7.75 percent, according to USA Today.

Around 70 percent of homeowners have mortgage interest rates that are more than 3 percentage points below the current rate.

This creates a golden handcuffs scenario — a “lock-in effect” due to the financial penalty that comes from selling.

While this might sound like a ‘champagne problem’ — a problem of abundance — the reality is that many homeowners are reluctant to change jobs, relocate for work or family, or make other moves that would be beneficial to their lives.

The result? A 57 percent plunge in existing home sales last year, according to a report from the Federal Housing Finance Agency.

This drop in supply is one reason why nationwide home prices rose 5 percent last year.

Rising home prices makes life tougher for renters, who feel increasingly shut out of the housing market.

Any renter who aspires to own a home faces a tough trifecta: high interest rates, high home prices, and low inventory.

It’s the opposite side of the coin. Both renters and homeowners face a problem that stems from the same source: a constrained housing market.

There’s not enough supply.

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What can you do?

If you’re a renter who aspires to own:

Househack. Buy a duplex, triplex, or 4-plex, which will offset some of the high housing costs you face.

If you live in an area that lacks multiunits, buy a single-family home and retrofit a portion of it into an autonomous dwelling. Convert the basement or garage into a separate unit. Build an accessory dwelling unit (ADU), which in some regions is called a casita, in-law suite or granny flat.

This holds a dual benefit: you contribute to the solution (creating more supply), while also collecting income to offset your housing costs.

This email won’t cover everything, but a few days ago, I did a YouTube livestream in which I answered a question from a VIP List subscriber who wants to househack. This person calculated that their out-of-pocket housing costs would come to $300 per month. They asked for feedback. Here’s what I said. [Starts at 8 min, 15 seconds]

If you’re a homeowner feeling trapped:

Feeling trapped in your home but the desire to move is strong? Let’s break it down.

First, how urgent is the move? Is it a non-negotiable career or family situation? (These are big reasons to move). Or is it more about wanting a bigger space? (This can potentially wait.)

If moving is crucial, consider becoming an accidental landlord. Here’s the idea:

  • Hold your current home and rent it out.
  • Find a rental place in your new city as you save for a downpayment on your next home. (Bonus: reduced transaction costs; higher likelihood of buying after rates decline, which eliminates the cost and hassle of a refi).

Don’t sweat squeezing every last dollar out of your accidental rental. This isn’t a dedicated investment property; avoid the “comparison trap” if you chat with experienced rental investors.

Focus on finding a good tenant who takes care of the place. The rental income should primarily help cover your costs, not maximize your profits.

The profit-maximizing properties are bought with that intention. This is a holding, not an acquisition.

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Jobs boom, stocks soar … yet inflation stays high, money is expensive to borrow, and both homeowners and renters feel stuck.

Confused by mixed economic signals? Listen as I break it down in this First Friday podcast episode.

Enjoy!

— Paula

Source: affordanything.com

Apache is functioning normally

Amid ongoing uncertainty over the direction of interest rates, Canada’s mortgage market has seen a significant shift in borrower and lender behaviours. Anticipating a potential rate decline, both parties have adjusted their strategies, leading to increased discounts on fixed-term mortgages and a surge in demand for shorter-term mortgages.

“Persisting high inflation and uncertainty around the potential decrease in the Bank of Canada’s interest rate had cooling effects across the country in 2023,” the Canada Mortgage and Housing Corporation (CMHC) said in its Residential Mortgage Industry Report released Wednesday.

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Canada’s residential mortgage debt reached $2.16 trillion in February 2024 — an increase of 3.4 per cent from the previous year, and the slowest growth rate in nearly 23 years.

The CMHC attributes the slowdown in mortgage growth to several factors, including high inflation and speculation about potential interest rate cuts by the Bank of Canada. As a result, there has been a softening of resale activity in the housing market and declining home prices in various regions.

“Despite the increasing discount, most borrowers remain unwilling to lock in for the traditional five-year mortgage term as they remain uncertain of the short- to medium-term mortgage rate outlook,” CMHC said in the report.

However, the report suggests a potential reversal of this trend, with expectations of higher home sales and prices in the coming years. The anticipated growth is driven by declining mortgage rates, robust population growth, and increases in real disposable incomes.

“Increasing discounts for fixed-term mortgages in the first two months of this year indicate lenders foreseeing potential rate cuts by the Bank of Canada occurring sooner than they anticipated last year,” the agency said.

Article content

In July 2023, the Bank of Canada’s interest rate settled at five per cent, a level it has maintained for five consecutive announcements. The next interest rate announcement is scheduled for June 5.

Recommended from Editorial

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  2. Why saving for a downpayment is next to impossible

Meanwhile, CMHC reports a notable resurgence in demand for variable-rate mortgages. They accounted for 15 per cent of all lending for newly-extended mortgages by federally regulated financial institutions in February 2024, a stark increase from the record-low levels experienced last summer.

Despite the changing landscape, three- to five-year terms remained the preferred option, capturing the lion’s share of the market. “They accounted for nearly 40 per cent ($9.0B out of $23.0) of all newly-extended mortgage lending by federally regulated institutions in February 2024,” the CMHC said.

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Source: financialpost.com

Apache is functioning normally

New loan application activity decreased for the first time in four weeks, dropping to its lowest mark in over two months, the Mortgage Bankers Association said. 

The MBA’s Market Composite Index, a measure of weekly application activity based on surveys of the trade group’s members, fell a seasonally adjusted 5.7% for the period ending May 24. The dropoff came as mortgage rates also saw their first uptick in four weeks and followed a rise in activity of 1.9% seven days earlier. On a year-over-year basis, volumes were 3.6% lower. 

“Both purchase and refinance applications fell, pushing overall activity to the lowest level since early March,” said Joel Kan, MBA vice president and deputy chief economist, in a press release.  

The conforming 30-year fixed-contract rate for mortgages with balances eligible for sale to the government-sponsored enterprises edged up 4 basis points to 7.05 from 7.01% among MBA lenders last week. Meanwhile, borrower points used to help buy down the rate climbed up to 0.63 from 0.6 for 80% loan-to-value ratio applications.

“Borrowers remain sensitive to small increases in rates, impacting the refinance market and keeping purchase applications below last year’s levels,” Kan added.

Similarly, after three straight weeks of elevated activity, particularly for government-backed transactions, the Refinance Index saw a 13.6% tumble from the prior survey. But the index still ended up higher by 12.4% compared to subdued levels of one year earlier. 

The steep pullback in refinances led their share in volume relative to overall activity to also shrink to 31.3% compared to 34% the previous week.

The seasonally adjusted Purchase Index took a more muted 1.1% fall, but still ended up lower for the third week in a row. On a year-over-year basis, purchase-application volumes decreased 10.4%, as housing market trends stymie would-be buyers.

“There continues to be limited levels of existing homes for sale, and many buyers are struggling to find listings in their price range that meet their needs,” Kan said. The MBA’s latest data correlates with recent trends reported by the National Association of Realtors, which said existing-home sales declined for the second straight month in April.

A retreat among borrowers in the federally sponsored lending market noticeably drove overall activity downward during the seven-day period. The seasonally adjusted Government Index dropped 12.4%, fueled by a significant plunge in Department of Veterans Affairs-backed refinance loans, MBA found.

The percentage of federally guaranteed loan volume also diminished in tandem, with VA-sponsored loans narrowing to a 12% share from 13.7% in the previous survey. Federal Housing Administration-backed applications edged back to 12.7% from 12.8%. The small slice of mortgages coming from U.S. Department of Agriculture programs grew to 0.4% from 0.3% week over week. 

Average mortgage rates among MBA members finished higher across the board to end last week. Like the conforming rate, the mean contract average of the 30-year jumbo loan also increased 4 basis points to 7.22% from 7.18% seven days earlier. Borrowers typically took 0.43 in points, down from 0.44. 

The 30-year FHA-backed mortgage came in at an average fixed rate of 6.85% rising from 6.77% in the prior survey period. Points climbed up to 0.95 from 0.88 the previous week for 80% LTV-ratio loans.

The average 15-year fixed-contract rate took a 24 basis point leap to 6.66% from 6.42%. Points used to buy down the rate rose to 0.69 from 0.54.

The contract 5/1 adjustable-rate mortgage averaged 6.64%, up from 6.48% one week earlier. Points finished at 0.77, rising from 0.55 for the loans, which start at a fixed term for 60 months before becoming variable.

At the same time, the share of ARM applications overall decreased to 6.4% from 6.6% seven days earlier, with the weekly slowdown also hitting the adjustable-rate mortgage market. MBA’s seasonally adjusted ARM Index fell 8.1%.

Source: nationalmortgagenews.com

Apache is functioning normally

Higher interest rates helped to wipe out three weeks of gains in mortgage application activity. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that activity, decreased 5.7 percent on a seasonally adjusted basis and 6.3 percent before adjustment during the week ended May 24.

The Refinance Index plummeted by 14.0 percent from the previous week’s level but stayed 12.0 percent higher than during the same week one year ago. The refinance share of mortgage activity decreased to 31.3 percent from 34.0 percent.

The seasonally adjusted Purchase Index declined for the third straight week, slipping 1.0 percent on a seasonally adjusted basis and 3.0 percent on an unadjusted basis. Purchase loan applications were down 10.0 percent compared to the same period in 2023.  

“Mortgage rates increased for the first time in four weeks, with the 30-year fixed rate up to 7.05 percent and all other loan types also seeing increases. The uptick in rates led to a decline in mortgage applications heading into Memorial Day weekend,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.  “Both purchase and refinance applications fell, pushing overall activity to the lowest level since early March. Borrowers remain sensitive to small increases in rates, impacting the refinance market and keeping purchase applications below last year’s levels. There continues to be limited levels of existing homes for sale and many buyers are struggling to find listings in their price range that meet their needs.”

Highlights from MBA’s Weekly Loan Application Survey.

  • Last week we referred to loan sizes, an indicator of home prices, as a “see-saw.” The up and down pattern has continued now for four weeks but the overall trend is negative. Since the last increase, the average has lost more than $4,000 and purchase loans have retreated by $6,000.
  • The FHA share of total applications dipped to 12.7 percent from 12.8 percent and the VA share fell 1,7 percentage points to 12.0 percent. The USDA share of total applications returned to its usual 0.4 percent share after falling off that pace fractionally the prior week.
  • The 7.05 percent average rate for conforming 30-year fixed-rate mortgages (FRMs) was 4 basis points higher than the prior week with points increasing to 0.63 from 0.60.
  • The rate for jumbo 30-year FRM moved to 7.22 percent from 7.18 percent and points ticked up to 0.43 from 0.44.
  • Thirty-year FRM backed by the FHA saw an average increase of 8 basis points to 6.85 percent, with points increasing to 0.95 from 0.88.
  • The rate for 15-year FRM averaged 6.66 percent with 0.69 point. The previous week the rate was 6.42 percent, with 0.54. point.
  • The average contract interest rate for 5/1 adjustable-rate mortgages (ARMs) rose to 6.64 percent from 6.48 percent. Points moved 0.22 higher to 0.77. The ARM share of activity decreased to 6.4 percent of total applications from 6.6 percent.

Source: mortgagenewsdaily.com

Apache is functioning normally

South Carolina home sales climbed in April, and growing inventory levels combined with a recent decline in mortgage rates could help keep the market stable through the summer. 

The number of homes for sale throughout the state surged 40 percent in April, more than doubling the market selection in 2022.

Homebuyers now have more than 22,000 options to choose from and the advantage of slightly lower borrowing costs heading into summer. 

The upturn is welcome after homes sales statewide got off to an iffy start in 2024 and heading into the busy spring season. Residential purchases rose 7.2 percent in April after a nearly double-digit dip in March, according to monthly data by South Carolina Realtors.

Last month marked the first positive April since 2021.

Overall, 7,906 homes changed hands across the Palmetto State in April at a median sales price of $340,000 — up 5.4 percent from a year ago.

Several submarkets reported double-digit jumps in sales, with the two largest-volume markets in Charleston and Myrtle Beach up 8 percent and 2.1 percent, respectively.

The greater Greenville area spiked 15.8 percent and Columbia rose 13.9 percent.

Spartanburg saw the second-biggest leap in April with an 18.5 percent rise in sales — second only to Beaufort, where closings surged 27.2 percent.

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The Florence-based Pee Dee region took one of the hardest hits along with Cherokee County, with sales dropping 17.1 percent and 18.8 percent year over year, respectively.

As for prices, Hilton Head remains the highest-priced market with median home sales reaching $550,000. Charleston follows steadily behind at $425,700.

Home sales in the city of Greenwood — about 50 miles south of Greenville — fell 5.7 percent year over year. Prices soared 32.3 percent, however, putting the small city on par with the Aiken and Spartanburg markets.



Home sales across South Carolina rose 7.2 percent year over year in April after a rocky March that saw nearly double-digit declines.


Staff


Mortgage rates continue to be one of the biggest hurdles for homebuyers, but a dip for the second consecutive week will offer a bit of breathing room heading into the summer, according to Sam Khater, Freddie Mac’s Chief Economist.

“Given the news that inflation eased slightly, the 10-year Treasury yield dipped, leading to lower mortgage rates,” Khater said. “The decrease in rates, albeit small, may provide a bit more wiggle room in the budgets of prospective homebuyers.”

As of Thursday, the average 30-year fixed-rate mortgage fell to 6.94 percent from 7.02 percent a week earlier, financier Freddie Mac reported. The comparable but shorter-term 15-year home loan also fell, landing at 6.24 percent from 6.28 percent. 

“May has been a better month for the mortgage market, with the last three weeks showing declining mortgage rates and increasing applications,” said Bob Broeksmit, CEO of the Mortgage Bankers Association. “Rates below 7 percent are good news for prospective buyers, and MBA expects them to continue to inch lower this summer.”

The Federal Reserve remains undecided on when or whether it will cut its key interest rate this year, which would trickle down to mortgages.

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Source: postandcourier.com

Apache is functioning normally

Delinquencies are trending down again, with the number of home loans past due by 90 days or more hitting its lowest level in nearly 19 years. 

The national delinquency rate, for all mortgages 30 or more days past due but not in foreclosure, was 3.09% at the end of April, according to Intercontinental Exchange. It’s the second-lowest figure on record behind a 2.92% rate in March 2023. April’s late payment metrics featuring widespread declines are a contrast from a recent, small spike last month.

Serious delinquencies fell to their lowest level since August 2005, ICE reported. The 417,000 total properties with mortgages 90 days or more past due, but not in foreclosure, fell by 84,000 properties year-over-year.

In all, 1,658,000 homes nationwide are late on their mortgage payments. However, the number of borrowers who missed a single payment fell by 30,000, while those at least 60 days late fell by 6,000, a 10-month low. 

Private mortgage insurers cited homeowners’ rising levels of equity as reason for delinquencies which have stayed relatively quiet in the past two quarters. Despite nearly $17 trillion in equity, Attom Data Solutions recently reported an uptick in the number of properties underwater on their loans.

Other reports have noted upticks in delinquencies for segments such as non-qualified mortgages and Department of Veterans Affairs-backed loans. Late payments for VA loans shot up to 4.66% in the first quarter amid a foreclosure moratorium. 

Delinquency cures were down in April for both early and late-stage delinquency, ICE noted. At the same time, the inflow of new 30-day late payments was healthier than in March. 

Foreclosure starts were up 4% annually, and sales were up 1.5% in April, with 5,900 transactions. ICE said the sales figure remains roughly half of pre-pandemic norms. Altogether, the foreclosure pre-sale inventory rate continues to recede to just 0.37% in April. 

Prepayments shot up to their highest level in eight months, and are up 18% from the same time last year, according to ICE. The firm explained the rise to a 0.52% national rate due to the spring homebuying season despite affordability challenges.

Source: nationalmortgagenews.com