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Apache is functioning normally

Fears over turbulence in commercial real estate is creating opportunities for well-capitalized investors, according to Blackstone Inc. co-head of global real estate Kathleen McCarthy. 

“When sentiment gets really negative, prices decouple from fundamental value,” she said in a Bloomberg Television interview with Francine Lacqua. “We have a practice of trying to quiet that noise and look at the information in front of us.”

High vacancy rates in U.S. office markets and the impact of rising interest rates on property values in Europe have prompted a brutal selloff in publicly traded real estate stocks and bonds. The depth of the downturn implies investors are expecting prices to collapse, though a standoff between buyers and sellers means the pain has yet to fully filter through to asset values. 

Blackstone has deployed about €3.5 billion ($3.8 billion) in Europe so far this year, sticking mostly to properties where it sees the best potential for rents to rise and offset higher borrowing costs, like warehouses, student housing and lab space, McCarthy said. 

“We have more data than any other investor on the planet,” she said. “That informs where we transact.” Blackstone is being very selective but is still prepared to “lean in to where we see strength in the short term and over the long term,” she added.

The volume of German commercial real estate deals in the first half of the year was about two-thirds below the long-term average. But pressure is building on landlords that need to sell assets in order to reduce their relative indebtedness, which is rising as asset values fall. 

“It takes a period of time for sellers to recognize that it is maybe time to move on or settle in to new pricing,” McCarthy said.

Source: nationalmortgagenews.com

Apache is functioning normally

The volume of mortgage applications fell during the last week of June as compared to the prior week which had contained an adjustment to account for the Juneteenth holiday. The Mortgage Bankers Association (MBA) reported a decline of 4.4 percent in its seasonally adjusted Market Composite Index. The change ended a three-week streak of volume gains. On an unadjusted basis, however, that index did move 6.0 percent higher.

The Refinance Index decreased 4 percent from the previous week and was 30 percent lower than the same week one year ago. The refinance share of applications ticked up to 27.4 percent from 27.2 percent.

The seasonally adjusted Purchase Index declined 5.0 percent but was 6.0 percent higher before adjustment. Applications were down 22 percent from the same week in 2022.  

“Mortgage applications fell to their lowest level in a month last week as rates for most loan types increased. As mortgage-Treasury spreads remained wide, the 30-year fixed rate increased to 6.85 percent, the highest rate since the end of May,” according to Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase applications decreased for the first time in a month, as homebuyers remained sensitive to rate changes. Rates are still over a percentage point higher than a year ago, and housing affordability is still a challenge in many parts of the country. However, the average loan size for a purchase application declined to $423,500 – its lowest level since January 2023. This was likely driven by reduced purchase activity in some high-price markets and more activity in some of the lower price tiers as buyers searched for more affordable options.”  

The recent low of $423,500 cited by Kan for purchase loans was about $4,500 below the average a week earlier. Overall loan sizes declined from $384,200 to $378,800. The last time loan sizes rose was in mid-May.

 Other Highlights from MBA/s Weekly Mortgage Applications Survey

  • The FHA share of total applications increased to 13.0 percent from 12.9 percent and the Veterans Administration’s share decreased to 11.7 percent from 12.2 percent. USDA applications were unchanged from the prior week at a 0.4 percent share.
  • The 6.85 percent average contract interest rate for conforming 30-year fixed-rate mortgages (FRM) represented a 10-basis point increase from the prior week. Points rose to 0.65 from 0.64.
  • The rate for jumbo 30-year FRM increased to 6.95 percent from 6.91 percent, with points slipping to 0.64 from 0.69.
  • FHA-backed 30-year FRM had a rate of 6.68 percent with 0.98 point. The prior week the rate was 6.63 percent with 1.08 points.
  • Fifteen-year FRM rates averaged 6.30 percent, up 7 basis points. Points increased to 0.91 from 0.69.
  • The average contract interest rate for 5/1 adjustable-rate mortgages (ARMs) dropped to 6.00 percent from 6.28 percent, with points increasing to 1.23 from 1.02.
  • The ARM share of activity increased to 6.2 percent from 6.1 percent.

Source: mortgagenewsdaily.com

Apache is functioning normally

The volume of mortgage applications fell during the last week of June as compared to the prior week which had contained an adjustment to account for the Juneteenth holiday. The Mortgage Bankers Association (MBA) reported a decline of 4.4 percent in its seasonally adjusted Market Composite Index. The change ended a three-week streak of volume gains. On an unadjusted basis, however, that index did move 6.0 percent higher.

The Refinance Index decreased 4 percent from the previous week and was 30 percent lower than the same week one year ago. The refinance share of applications ticked up to 27.4 percent from 27.2 percent.

The seasonally adjusted Purchase Index declined 5.0 percent but was 6.0 percent higher before adjustment. Applications were down 22 percent from the same week in 2022.  

“Mortgage applications fell to their lowest level in a month last week as rates for most loan types increased. As mortgage-Treasury spreads remained wide, the 30-year fixed rate increased to 6.85 percent, the highest rate since the end of May,” according to Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase applications decreased for the first time in a month, as homebuyers remained sensitive to rate changes. Rates are still over a percentage point higher than a year ago, and housing affordability is still a challenge in many parts of the country. However, the average loan size for a purchase application declined to $423,500 – its lowest level since January 2023. This was likely driven by reduced purchase activity in some high-price markets and more activity in some of the lower price tiers as buyers searched for more affordable options.”  

The recent low of $423,500 cited by Kan for purchase loans was about $4,500 below the average a week earlier. Overall loan sizes declined from $384,200 to $378,800. The last time loan sizes rose was in mid-May.

 Other Highlights from MBA/s Weekly Mortgage Applications Survey

  • The FHA share of total applications increased to 13.0 percent from 12.9 percent and the Veterans Administration’s share decreased to 11.7 percent from 12.2 percent. USDA applications were unchanged from the prior week at a 0.4 percent share.
  • The 6.85 percent average contract interest rate for conforming 30-year fixed-rate mortgages (FRM) represented a 10-basis point increase from the prior week. Points rose to 0.65 from 0.64.
  • The rate for jumbo 30-year FRM increased to 6.95 percent from 6.91 percent, with points slipping to 0.64 from 0.69.
  • FHA-backed 30-year FRM had a rate of 6.68 percent with 0.98 point. The prior week the rate was 6.63 percent with 1.08 points.
  • Fifteen-year FRM rates averaged 6.30 percent, up 7 basis points. Points increased to 0.91 from 0.69.
  • The average contract interest rate for 5/1 adjustable-rate mortgages (ARMs) dropped to 6.00 percent from 6.28 percent, with points increasing to 1.23 from 1.02.
  • The ARM share of activity increased to 6.2 percent from 6.1 percent.

Source: mortgagenewsdaily.com

Apache is functioning normally

We had a few times in the previous cycle where the 10-year yield was below 1.60% and above 3%. Regarding 4% plus mortgage rates, I can make a case for higher yields, but this would require the world economies functioning all together in a world with no pandemic. For this scenario, Japan and Germany yields need to rise, which would push our 10-year yield toward 2.42% and get mortgage rates over 4%. Current conditions don’t support this.

The backstory

The lifeblood of my economic work depends greatly on the ebbs and flows of the 10-year yield, even more than mortgage rate targeting, which is unusual for a housing analyst. 

When I first dipped into 10-year yield and mortgage rate forecasting in 2015, during the previous expansion, I said the 10-year yield will remain in a channel between 1.60%-3%. I’ve stuck to that channel forecast every year since — and for the most part that 10-year yield channel stuck. That range dictated that mortgage rates would roughly stay between 3.5%-4.75%.

When COVID-19 was about to hit our economy, I forecasted that the 10-year yield recessionary yields should be in a range between -0.21%-0.62%. We got to as low as 0.32% on that Monday morning in March when the crisis was hitting the markets the hardest. About a month later, I published my AB (America is Back) recovery model, which said that the 10-year yield should get back toward 1%. We got there in December of 2020 so I was able to retire my America is Back recovery model.

I said that when the economy was beginning the new expansion, the 10-year yield would create a range between 1.33%-1.60%. This couldn’t happen in 2020 but should happen in 2021. Even with the hot economic growth, the hottest inflation data in decades, and the Fed rate hike discussion picking up, this range of 1.33%-1.60% has held up nicely for most of 2021, meaning mortgage rates were going to be low in 2021.

My forecast for the 10-year yield range in 2021 was 0.62%-1.94% which translates to a bottom-end range in mortgage rates of 2.375%-2.5%, and an upper-end of 3.375%-3.625%. Single mortgage rate target forecasts have not fared well over the decades because these forecasters did not respect the downtrend in bond yields since 1981.

The X factor

Can there be a bond market sell out short term, sending yields above 1.94%, like what we saw early in the COVID-19 crisis? Yes, but if the markets do overreact for any reason, typically bond yields would fall back. Why do I not believe bond yields will push higher aggressively? The economic rate of growth peaked in 2021. The economy was on fire this year, and inflation data was super-hot. Even so, the highest the 10-year yield got was 1.75%. The economic disaster relief that boosted the recovery in 2020 and 2021 has been drawn down.

Government spending plans have also been watered down and new legislation might not even pass at all. Economic growth peaked in 2021 and some of the hotter inflation data has the potential to fall next year. The Federal Reserve wants to hike rates to cool the economy. Typically what happens before the first Fed rate hike is that the U.S. dollar has its biggest percent move higher ,which tends to hurt commodity prices and world growth. This is something to watch for next year as it could slow down world growth.

The economy won’t be as hot in 2022 as it was in 2021, but it will remain in expansionary mode. This type of backdrop will make it challenging for rates to rise in a big way and stay higher. The key with all my 10-year yield channel work is how long the 10-year stays in that channel during the calendar year. I have always believed this type of forecast is more useful than targeting a mortgage rate. 

Existing-home sales

The forecast

For 2022, I am forecasting the same sales trend range as 2021 of about 5.74 million to 6.16 million. If monthly sales prints are above 6.16 million for existing homes, then I would consider the market more robust than expected. If sales trend toward 5.3 million then we will be back to 2019 levels. This would still be healthy sales considering the post-1996 trend, but it will mean housing demand has gotten softer.

This has happened before when higher rates have impacted demand. This is why since the summer of 2020 I have written about how if the 10-year yield can get above 1.94%, then things should cool down. However, as you can see it’s been hard to bond yields over that level and thus mortgage rates above 3.75%.

The backstory

If the last two reports of the year on existing home sales are above 6.2 million, I will admit that sales have slightly outperformed what I predicted for 2021. Early in 2021, I wrote that home sales would moderate after the peaks caused by the COVID-19 shutdown make-up demand and that readers should not overreact to this slowing. I wrote that sales would range between 5.84 million and 6.2 million, and that we could anticipate a few prints under 5.84 million — but sales would consistently be above the closing level of 2020 of 5.64 million. We got one print below 5.84 million and a few recent prints over 6.2 million, with two more reports. Mortgage demand was solid all year long and has picked up in the last 15 weeks. 

One of my longer-term forecasts in the previous expansion was that the MBA Index would not reach 300 until 2020-2024. We got there in the early part of 2020, then the Index got hit by the COVID-19 delays in home buying to only have a V-shaped recovery that led to the make-up demand surge, moderation down and back to 300.

As you can see, it’s been like Mr. Toad’s wild ride here. We will still have some COVID-19 year-over-year comps to deal with up until mid February and then we can get back to normal. However, one thing is for sure: demand has been solid and stable in 2020 and 2021. Also, the market we have today doesn’t look like the credit boom we saw from 2002-2005.

I didn’t believe total home sales could get to 6.2 million in the years 2008-2019, this is new and existing home sales combined. We simply didn’t have the type of demographics in the previous expansion. We are in different times.

New home sales and housing starts

The forecast

My long-term call from the previous expansion has been that we won’t start a year at 1.5 million total housing starts until the years 2020-2024 and we have finally gotten here much like the 300 level in the MBA index. My rule of thumb has always been to follow the monthly supply data for new homes, and as long as monthly supply is below 6.5 months on a three-month average, they will build.

The backstory

Housing starts, permits and builders confidence are ending the year on a good note. Even though new home sales aren’t booming this year, it’s good enough to keep the builders building more homes even with all the drama of labor shortages, material cost and delays in finishing homes.

As you can see below, the uptrend has been intact even with the slowdown in 2018 and the brief pause from COVID-19.

The new home sales sector gets impacted by rates much more than the existing home sales marketplace. The last time this sector saw some stress from mortgage rates was in 2018 when rates were at 5%. Today’s 3% mortgage rates are good enough to keep things going. We should see slow growth in new home sales and housing starts as long as the monthly supply of new homes is below 6.5 months on a 3-month average. This sector has legs to walk forward slowly. I have never believed in the housing construction boom premise as mature economies don’t have construction booms with slowing population growth. More on that here.

The X factor

The one concern I have for this sector in 2022 is if the builders keep pushing the limits of home price growth to make their margins look better. When rates are low, they have the pricing power to do this. This is why the sector has done so well in 2021. If I am wrong about mortgage rates  staying low in 2022, and rates  go above 3.75% with duration, then demand for new homes should get hit. The longer-term concern for this sector is price growth because if demand slows down, this means a slowdown in construction and the builders really maximized their pricing power in 2020 and 2021. 

Home prices

The forecast

I am looking for total home-price growth to be between 5.2% and 6.7% for 2022. This would be a meaningful cool down in price growth but would still be a third year straight of too much price growth for my taste. 

The backstory

My biggest fear for the housing market during the years 2020 to 2024 was that real home-price growth can be unhealthy. When you have the best housing demographic patch ever recorded in history occurring at the same time as the lowest mortgage rates ever, with housing tenure doubling as it has in the last 12 years, it’s the perfect storm for unhealthy price growth.

Housing inventory has been falling since 2014 and mortgage purchase applications have been rising since then. As you can see below, 2021 wasn’t looking good for me regarding my fear for home prices rising too much.

The X factor

When I talk about real home-price growth being too hot, I mean that nominal home price growth is above 4.6% each year during the five-year period of 2020 to 2024, for a cumulative 23% growth. This would not be a positive for the housing market. If we end 2021 with 13% home price growth, (and it looks like we will do that or higher), then we have already achieved 23% of the price growth that I am comfortable with in just two years. 

While I do believe home-price growth is cooling from the extreme high rate of growth we had earlier in the year, I would very much like to see prices get back in line with my model for a healthy market. In order for this to happen, we would need to have no increase in home prices for the next three years. Because inventory levels are falling again, and we are at risk of starting the 2022 spring season at fresh new all-time lows, this outcome is very unlikely.

Early in 2021, I had raised concerns that prices overheating should be the main concern, not forbearance crashing the market. When demand is stable, it’s extremely rare for inventory to skyrocket and American homeowners have never looked better on paper. In fact, a few months ago I talked about inventory falling again should be the concern going out.

Housing demand

The forecast

Everyone is talking about rates going higher and no one, it seems, is talking about the possibility that mortgage rates could go under 3% in 2022, except me. This is front and center in my mind. I want to see a B&B housing market: boring and balanced. In a B&B market, buyers have choices, sales move at a reasonable pace without bidding wars, and the whole home-buying experience is less stressful and more sane. I would like to see inventory get toward 1.52 – 1.93 million, (which is still historically low). However, this will be a more stable housing market.

The backstory

Millions of people buy homes each year. The only thing that cooled demand for housing in the previous expansion was mortgage rates going over 4% with duration. The increase in rates didn’t crash the market or even facilitated negative year-over-year home price declines; but it did increase the number of days homes stayed on the market.

Currently the biggest demographic patch ever recorded in U.S. history are ages 28-34, the first-time homebuyer median age is 33. When you add move-up, move-down, cash and investor demand together, demand will be stable and hard to break under the post-1996 trend of 4 million plus total sales every year in the years 2020-2024. 

The X factor

Frankly, I’m getting tired of calling this market the unhealthiest since 2010. This is not due to a massive credit boom or exotic loan products contaminating the market with excess risk — it’s the lack of choice for buyers. If mortgage rates go under 3%, which I believe they can, it just keeps the low inventory story going on. The Federal Reserves wants to cool down the economy, the government is no longer providing disaster relief anymore and the world economies should get hit if the U.S. dollar gets too strong. So, my concern is about rates falling in year three of my 2020-2024 period. This is also a first-world problem to have and we aren’t dealing with the housing market of 2005-2008 when sales were declining and the U.S. consumer was already filing for bankruptcy and having foreclosures before the great recession started in 2008. This is to give you some perspectives here with my thinking.

The economy

The forecast

I expect the rate of change to slow in 2022 but the economy will still be expansionary. Retail sales have been off the charts, and this data line, which I expected to moderate, still hasn’t. The rate of growth will cool. Replicating the growth we saw in 2021 will be nearly impossible. As the excess savings have been drawn down and the additional checks that people got are no longer coming, this data line will find a more suitable and sustainable trend in 2022. Still I am shocked that moderation hasn’t happened already and I was the year 2020-2024 household formation spending guy, too.

The backstory

The U.S. economy has been on fire this year. Even with the excess savings, good demographics, and low rates, not even I thought we would see economic growth like we did in 2021. However, like all things in life, despite the peaks and valleys, the overall trend will prevail.

The X factor

I recently raised one of my six recession red flags after the most recent jobs report as the unemployment rate got to a key level for myself. These red flags are more of a progress checklist in the economic expansion, and when all six of my flags are raised, I go into recession watch. The economy is in a more mature phase of expansion since the recovery was so fast. Like everything with me, it’s a process to show you the path of this expansion to the next recession. 

For housing, a strong labor market means more people are getting off forbearance, which is already under 1 million, much smaller than the nearly 5 million we had early in the crisis. I want to wish a Merry Christmas to all my forbearance crash bros who promised a housing crash in 2020 and 2021. You guys are the best trolling grifters ever!

More jobs and more robust wage growth mean the need for shelter will grow. The housing market is already dealing with too much rent inflation, but as wage growth picks up on the lower end, this means landlords will charge more rent. Again, this the problem you want to have, a tighter labor market means wage growth will pick up and we have 11 million job openings currently.

So, look for the rent inflation story to be part of the 2022 storyline, as well as the rate of growth of home prices cooling down.

There is nothing like a fifth wave of COVID-19 and a new highly transmissible variant to crank up the personal stress meter. While the continuing COVID crisis can cause havoc on some short-term data lines for the economy, we will, as we have done, get through this and move forward. Our reality is that, as a nation, we have learned to consume goods and services with an active virus infecting and killing us every day.

The St. Louis Financial Stress Index, which was a key data line to track for the America Is Back recovery model, has still been in a calm zone for the entire year, currently at -0.8564. When we break over zero — which is considered normal stress — then we have some market drama. However, that wasn’t the storyline in 2021 and we didn’t have a single day where the S&P 500 was in correction mode. It’s not normal to not have a stock correction, so a stock market correction in 2022 is in the works and this can lead more money into bonds and drive rates lower. 

For more discussion on this index and the America is Back recovery model, this podcast goes over everything that has happened in 2020-2021. 

Conclusion

What a ride it has been for all of us since April 7, 2020 when I wrote the America Is Back economic recovery model for HousingWire. We end 2021 with one of the greatest economic recovery stories ever in the history of the United States of America, and a terrible, dark, two-year period of failure for the extreme housing bears. Now we are well into a recovery and looking forward to a new year with its new challenges.  

The job of the analyst is to forecast the positive or negative impacts that a whole slew of variables have on the economy based on carefully formulated economic models. The variables, such as demographics, the unemployment rate, what the Federal Reserve is doing, commodity prices and so many others, are constantly in flux and feed off of and influence one another. Additionally, new economic variables pop up all the time. My job, with every podcast and article, is to show you how the changes in these variables light the path to where the economy and the housing market is heading. 

Take a deep breath — in through the nose and out through the mouth. The last two years have been crazy, but I am glad you are here to read this. This is our country, our world and our universe, and everyone is part of team Life on Earth. Merry Christmas, Happy Holidays and have a wonderful Happy New Year. We will get through 2022 one data line at a time.

“We have always held to the hope, the belief, the conviction that there is a better life, a better world, beyond the horizon.” Franklin D. Roosevelt

Source: housingwire.com

Apache is functioning normally

Martin Lewis has issued new advice on whether or not you should fix your mortgage after rates saw an increase. New figures this week showed a two-year fixed-rate mortgage deal is now £35 more expensive than it was a few weeks ago.

It follows a 0.3% increase in interest charges and predictions that the Bank of England could raise rates to 5% or higher despite previous forecasts that it would not rise above its current rate of 4.5%. The changes come as data shows inflation – which was 8.7% in the 12 months to April 2023 – is not falling by as much as expected.

A number of lenders have pulled mortgage deals off the market in recent weeks as well as making changes to their current deals, putting further financial pressure on cash-strapped households. To get all the latest money-saving news straight to your inbox twice a week sign up here.

Read more:Martin Lewis’ Money Saving Experts share cheap £12 SIM deal for phone users

Financial journalist Martin Lewis has now given his opinion on what customers whose mortgage deals are ending soon should do with many uncertain about whether to fix their rates or not.

Speaking on his BBC Martin Lewis Podcast the money guru explained the current situation, saying he was getting queries from people whose mortgage deals were coming to an end and were unsure of what to do next. He said this was a “tricky scenario” as the Bank of England base rate – against which tracker mortgage rates are set – was initially expected to peak at 4.5%, the level they are currently at.

But Mr Lewis said the bank now expects that to peak at 5% or 5.5% due to general inflation not falling by as much as expected. He said the rise in some fixed rates had come based on The City of London financial district’s long-term predictions for interest rates.

“The reason the fixed rate has gone up since the inflation period is because The City’s view is interest rates in the UK are going to rise further,” he said. “If I look at the cheapest fixes for a 75% loan-to-value mortgage right now, and I contrast where we are now to where we were three and a half weeks ago, the cheapest two-year fix that most people get with various criteria was 4.27% and is now 4.54%, so it’s gone up just under 0.3%.

“The cheapest five-year fix was 4.06% and is now 4.29%, so fix year fixes are now cheaper than two year fixes. The cheapest ten-year fix was 4.15% and has gone up to 4.39%, a rise of about 0.24%.”

Mr Lewis explained that this meant the period which the financial sector believed interest rates rises were most likely was in the next two years, which was the reason two-year fixes were more expensive than their alternatives.

“This says that they think the much longer-term view of interest rates is still relatively stable. The issue of interest rates going up by more than they thought is more about the short term, more than the longer term. It still affects the longer-term, but not as much as it affects the short term.”

Mr Lewis later heard from a caller asking for advice on whether she should move to a new rate when her current mortgage deal ends soon. He responded that this would come down to the financial situation of each customer and the length of the mortgage they wanted.

“The question is how much could you afford to miss the boat? How close are you on the new rates to not being able to pay your mortgage? The first question is ‘can I afford the gamble?’ Lots of people listening won’t be able to and will have to look to fix. If things then got better, they would feel very frustrated.”

But he urged customers who did opt for a fix not to “look back in hindsight. If you make the decision to fix, remember you made it because it gave you certainty, not because you thought it was going to be cheaper.” He added that five- and ten- year fixes looked “relatively” cheap compared to two-year fixes right now, but that it would depend on how long the customer wanted.

Mr Lewis said he would not put off buying a property if would-be buyers found one suitable to their needs given the current uncertainty. He said: “There are many people who say to me ‘when interest rates go back down’ – that is wrong. It is ‘if’ interest go back down. A 4% mortgage, historically, is a very cheap mortgage. We’ve just lived in this 17-year anomaly of hyper-low interest rates. The idea that things will go back is a very difficult concept.

“My view tends to be the more you want certainty, the more you want to know that you can afford to pay the mortgage, the more you should hedge towards a fix and the more you should hedge towards fixing for longer.

“Right now, the cheapest ten-year fixes are cheaper than the cheapest two-year fixes. So if you’re buying a property you know you’re going to be in for ten years, you might want to look at getting a ten year fix.

“Certainty is really difficult to come by. The one bit of certainty at the moment is that it will be uncertain. You have to hope for the best, plan for the worst and make a decision not assuming things are going to move in your favour or against you.”

Halifax have reported that UK house prices have dropped 1% compared to a year ago – the first drop like this since 2012. Mr Lewis said this drop had not particularly benefited first-time buyers, while mortgage rates had “gone up phenomenally.

“You combine the two and we’re sort of in the worst of both worlds at the moment.”

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Source: walesonline.co.uk

Apache is functioning normally

Today we’ll learn more about “Homespire Mortgage,” which has made the Inc. 5000’s List of America’s Fastest-Growing Private Companies for the past four years in a row.

Aside from being a rapidly expanding mortgage company, they’re also consistently recognized as a top mortgage employer. Happy employees should increase your odds of being a happy borrower.

They pride themselves on breaking the mold, fusing innovative mortgage technology with the power of the human spirit to create a winning mortgage experience.

The company was founded in 2006 by Michael Rappaport (no, not the actor), who also currently serves as their president.

Let’s discover more about a lender borrowers trust, and real estate agents recommend.

Homespire Mortgage Fast Facts

  • Direct-to-consumer retail mortgage lender
  • Offers home purchase and mortgage refinance loans
  • Also an approved Fannie Mae and Freddie Mac seller and loan servicer.
  • Founded in 2006, based out of Gaithersburg, Maryland
  • Currently operates in 41 states and the District of Columbia
  • Funded roughly $2.4 billion in home loans during 2020
  • About half of total lending volume was in the state of Maryland

Homespire Mortgage is a direct-to-consumer retail mortgage lender that operates 32 branches in 17 states.

They are currently licensed to do business in 41 states nationwide, with Alaska, Hawaii, Missouri, Nebraska, Nevada, New York, South Dakota, Utah, and Wyoming the exceptions.

In 2020, roughly 70% of their loan origination volume consisted of purchase loans, with the remainder refinance loans. In other words, real estate agents trust them to get the job done.

About half of their production was conventional, while roughly a third was FHA loans, and about 12% was VA loans. The rest was jumbo or USDA.

They also just launched a special initiative for healthcare workers that waives lender fees for those battling COVID-19.

How to Apply with Homespire Mortgage

  • You can request a quick rate quote via their online form
  • Or apply for a mortgage directly from their website in as little as 15 minutes via ReadyApp
  • Digital mortgage allows you to import taxes and bank statements electronically
  • They also have branches in select states across the nation for in-person consultation

One big plus to Homespire Mortgage is the fact that you can apply for a home loan right on their website, with no human interaction.

That seems to be a thing these days, so if you’re the type who likes to go it alone, you’re in luck.

They’ve got a digital mortgage application powered by Ellie Mae known as “Homespire Mortgage ReadyApp” that lets you enter in all your vital information and link financial accounts for a fast and accurate experience.

You can sync your tax returns and bank statements and go from application to submission in as little as 15 minutes.

Once submitted, a loan consultant will get you pre-approved quick, handy if you plan on doing some house hunting.

While technology is great, they haven’t forgotten the human element either – you’re more than welcome to choose a loan officer to work with, or visit a branch if one is located near you.

At the moment, they’ve got branches in 11 states, and over time that number should grow as they work on their nationwide expansion.

When applying via the website, you can select a loan officer or branch location if you’ve been referred to someone specific, or if you know the individual you plan to work with.

You can also simply request a rate quote via the website and a loan consultant will call you to discuss your loan scenario.

Homespire Mortgage Loan Options

  • Offer home purchase loans with zero down
  • Down payment assistance available
  • Refinance loans including streamline and cash-out
  • Renovation loans via Fannie Mae, FHA, or the VA
  • Jumbo loans
  • Fixed-rate mortgages and ARMs

When it comes to loan options, Homespire Mortgage has plenty to choose from for both home purchases and mortgage refinances.

You can take out a conforming loan backed by Fannie Mae or Freddie Mac, or a government home loan backed by the FHA, USDA, or VA.

Additionally, they’ve got renovation loans (including HomeStyle Renovation, FHA 203k, and VA Renovation) for those who are purchasing or refinancing a fixer-upper.

Those in need of some down payment assistance can take advantage of the fact that Homespire Mortgage participates with federal, state, county, and city governments nationwide.

For those in expensive regions of the country, they also offer jumbo mortgages with loan amounts as high as $2.5 million and LTVs up to 95%.

In terms of specific loan programs, you can get a fixed-rate mortgage, such as a 30-year or 15-year, or an adjustable-rate mortgage, such as a 5/1 ARM or 7/1 ARM.

Like most other lenders these days, the lion’s share of mortgages originated recently have been 30-year fixed home loans.

So they’ve got a loan for just about everyone, whether you’re a first-time home buyer or looking to tap equity via a cash out refinance.

Homeownership for Healthcare Heroes Program

The company also just launched a special program that recognizes frontline healthcare workers who are currently battling COVID-19 nationwide.

Homespire’s Homeownership for Healthcare Heroes Program waives all lender fees for qualified borrowers on home purchase loans.

They say the average estimated savings are $1,520, which gives us a clue about what they normally charge borrowers.

Eligible participants include doctors, nurses, administrative professionals, along with individuals who work in doctor’s offices, nursing homes, and at home healthcare professionals.

The minimum loan amount is $100,000, and applications must be received between June 29th – December 31st, 2020.

Homespire Mortgage Rates

One negative to Homespire Mortgage is the lack of mortgage rate disclosure.

Sure, you can request a rate quote, but it’s nice to see mortgage rates upfront too.

Without knowing their pricing, or lender fees while we’re at it, it’s impossible to know how competitive they are until you get a quote.

As such, you should take the time to compare their quote to other mortgage companies to ensure you get a good deal.

While customer service and convenience are great, the mortgage could be with you for the next three decades. You’ll want to know you didn’t overpay.

Remember to factor in the lender fees, not just the rate, by considering the mortgage APR offered by Homespire Mortgage versus other lenders to accurately compare.

Homespire Mortgage Reviews

In terms of customer satisfaction, they’ve got a 4.98-star rating out of 5 on Zillow based on nearly 1,000 reviews.

After scanning through many of them, it appears most borrowers said both the interest rate and closing costs were lower than expected.

You can also view individual loan officer reviews on Zillow if you enter the person’s name in a web search. Handy if you want to know how someone specific performs as they’re a fairly large company.

On SocialSurvey, they have a 4.91-star rating out of 5 based on nearly 7,000 customer reviews. Again, you can filter those reviews by loan officer to learn more about the individual you plan to work with. Or to decide who to work with!

Homespire Mortgage is an accredited business with the BBB, and has been since 2009. They currently have an A+ rating, which is based on the company’s transparency and complaint history.

All in all, they seem to be highly regarded by past customers for both service and pricing.

Homespire Mortgage Pros and Cons

The Good

  • Can apply online via a digital mortgage application
  • Paperless process allows you to sync tax returns and bank statements
  • Lots of loan options to choose from
  • Discounts for healthcare workers
  • Lots of positive customer reviews
  • Brick and mortar branches for those who prefer human touch
  • They also service the loans they originate instead of selling them off
    Free mortgage calculators on site

The Potential Bad

  • Do not advertise their mortgage rates
  • No word on what lender fees they charge
  • Not licensed in all states at the moment

Source: thetruthaboutmortgage.com

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While there are a lot of new faces and startups in the mortgage industry, few companies have stood the test of time, especially with the Great Recession rearing its ugly head in the early 2000s.

But one mortgage company, Houston, Texas-based Cornerstone Home Lending, has been serving its communities since 1988.

The direct-to-consumer retail lender has more than 30 years of experience doling out home loans to satisfied customers, but also takes the time to embrace new technologies as evidenced by their smartphone app.

Cornerstone Home Lending Fast Facts

  • Retail mortgage lender based in Houston, Texas
  • Founded in the late 1980s by Marc N. Laird and Judy Belanger
  • Licensed in 41 states with 200 offices in 22 states
  • Over 500 loan officers and 1,500 team members
  • Funded roughly $6 billion in home loans during 2019

As noted, Cornerstone Home Lending, or CHL for short, has been around a while, much longer than the average mortgage company these days.

They claim to rank #30 nationally in annual home loan volume, and 10th nationally among independent mortgage companies.

In their latest full year, they closed about $6 billion in homes, with a home purchase loan share of roughly 72%.

The rest were home refinance loans, with about 10% of that share containing cash out to the borrower.

A good chunk of their total production consisted of conventional home loans (60%), with another 15% FHA loans, 13% jumbo loans, and 11% VA.

Most of the loans closed last year were 30-year fixed mortgages, though they also originated 15-year fixed mortgages and 7/1 ARMs as well.

Some 30% of total lending volume took place in their home state of Texas, which comes as no surprise.

They currently lend in 41 states and DC, but aren’t available in Connecticut, Georgia, Hawaii, Illinois, Massachusetts, New Jersey, New York, Rhode Island, and Vermont.

Applying for a Mortgage with Cornerstone Home Lending

  • You have the option of getting pre-qualified via their website or smartphone app
  • Visiting a branch office if one is located near you
  • Or calling them directly to go over a loan scenario and get pricing

To get the ball rolling, you can either visit their website and navigate to the “prequalify” page, or download their smartphone app called LoanFly and then click on “prequalify.”

Both methods require you to fill out a short form with just your contact information, at which point you’ll be contacted by a loan officer.

They say you can get pre-qualified for a mortgage in as little as 15 minutes during normal business hours.

From the LoanFly app, you can also request a mortgage rate or a callback from a loan officer.

Alternatively, you can call Cornerstone Home Lending directly to get pre-qualified or to discuss a loan scenario. Or visit a local branch office if one is located near you.

Branches appear to be located in the following states: AK, AR, AZ, CA, CO, FL, MD, MO, MS, MT, NC, NM, NV, OK, OR, TX, UT, VA, WA, WI, WY

It’s unclear if you can actually apply for a mortgage on your own, which is often an option with the most tech-savvy mortgage lenders these days.

Once in contact with a loan officer, they can walk you through the loan process and answer any additional questions you may have.

After your loan has been submitted, you can use the borrower portal to check loan status, upload documents, and satisfy conditions, via the app or the website.

Cornerstone Home Lending Loan Options

  • Home purchase loans and refinance loans (including cash-out refinances)
  • Conventional loans backed by Fannie Mae and Freddie Mac
  • Government loans backed by the FHA, USDA, and VA
  • Jumbo home loans
  • Fixed-rate and adjustable-rate options available

Cornerstone is currently approved and in good standing with Fannie Mae and Freddie Mac, along with the FHA, VA, and USDA.

They offer both home purchase loans and refinance loans, but it’s unclear if they offer second mortgages or home renovation products.

The details on their website are a bit scant when it comes to loan options, though they do mention the loan types above, along with jumbo loans.

Additionally, you can get a fixed-rate mortgage or an adjustable-rate mortgage, with varieties like a 30-year fixed or 15-year fixed, and a 5/1 ARM or 7/1 ARM.

So all the usual stuff but nothing too fancy by the looks of it. They say their loan officers have access to hundreds of loan products, which means there’s probably more than what’s listed on their website.

Cornerstone Home Lending Mortgage Rates

Cornerstone doesn’t advertise its mortgage rates online so we don’t know where they stand pricing-wise.

The only thing they say is that they offer “ultra-competitive rates,” which begs the question, why not share them?

Additionally, there’s no information regarding lender fees, so we don’t know if they charge a loan origination fee, underwriting fee, and so on.

If and when getting a quote from Cornerstone Home Lending, be sure to compare it to other lenders to see how competitive they are.

There are literally thousands of mortgage lenders out there to choose from, so put in the time if you want a great rate with low closing costs.

Cornerstone Home Lending Reviews

First off, they’ve got incredible reviews on Zillow, with a 4.96-star rating out of 5 based on feedback from nearly 2,500 past customers.

What’s nice about the Zillow reviews is you can see who the customer worked with, click on that individual’s name, and get all their reviews as well.

This is helpful with large mortgage companies that have tons of employees since experiences can vary greatly from one loan officer to the next.

Many of the Zillow reviews indicated a lower mortgage rate than expected, while many said the closing costs were as expected.

On BirdEye, they’ve got a 4.9-star rating based on about 800 reviews, so they seem to be consistently highly-rated.

They also list a bunch of customer reviews right on their website, which seem to the most recent ones available.

Cornerstone Home Lending is BBB accredited since 1997 and currently has an A+ BBB rating. Their customer reviews on the BBB aren’t great, which is the norm for BBB customer reviews.

Cornerstone Home Lending Pros and Cons

The Good

  • Excellent reviews from thousands of past customers
  • A free smartphone app and online borrower portal
  • Physical branches in many states where they operate
  • In-house processing, underwriting, and funding
  • Average industry tenure of its employees is 10+ years

The Possible Not-so-Good

  • Not licensed in all states
  • Unclear if you apply for a mortgage all on your own
  • Don’t list specific loan programs that are available
  • Do not advertise their mortgage rates or lender fees

(photo: Zeev Barkan)

Source: thetruthaboutmortgage.com

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As rates for most loan types increased, mortgage applications fell to their lowest level in a month last week.

For the week that ended June 30, mortgage applications fell 4.4% from the prior week, according to data from the Mortgage Bankers Association. 

“As mortgage-Treasury spreads remained wide, the 30-year fixed rate increased to 6.85%, the highest rate since the end of May,” said Joel Kan, MBA’s vice president and deputy chief economist. “Purchase applications decreased for the first time in a month, as homebuyers remained sensitive to rate changes. Rates are still over a percentage point higher than a year ago, and housing affordability is still a challenge in many parts of the country.”

Reduced purchase activity in some high-price markets and more activity in some of the lower price tiers might be responsible for this average loan size drop, explained Kan.

Last week, mortgage rates increased for most loan types, with the 30-year fixed rate increasing to 6.85% from 6.75%, per the MBA’s data. On the other hand, the jumbo rate was higher than the conforming rate for the fourth week in a row. The MBA data showed that for jumbo loan balances (greater than $726,200), the rate jumped to 6.95% from 6.91% last week.   

At Mortgage News Daily, mortgage rates were higher on Wednesday, at 7.08%.

Purchase applications decreased for the first time in a month, the purchase index decreased by 4.4% from one week earlier and was 22% lower than last year’s level on an unadjusted seasonal basis. Refinancing applications decreased 4% last week compared to the previous week and were 30% lower than the same week one year ago. However, the refinance share of mortgage activity increased to 27.4% of total applications from 27.2% the prior week. 

The Federal Housing Administration loans’ share increased to 13% from 12.9% the week prior. The U.S. Department of Veteran Affairs loans’ share decreased to 11.7% from 12.2% the week prior. And the U.S. Department of Agriculture loans’ share remained unchanged at 0.4% of the total applications.

Source: housingwire.com

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‘Unacceptably high’: The Fed plans to keep hiking rates — but with the typical home selling for just $4K less than 2022’s all-time high, don’t expect a big housing correction to follow

Minutes from the latest Federal Reserve meeting released on Wednesday show the Fed feels the country’s inflation rate remains “unacceptably high.”

While the central bank chose to hold the federal funds rate at 5.0% to 5.25% in its latest meeting back in June, the recently released minutes reveal the Fed has further rate hikes planned for the year, even if they won’t come as fast and furious as they have so far.

Don’t miss

If that news, along with sticky inflation, after a long winter of continuously climbing mortgage rates and steadily falling home prices, has you wringing your hands over the future of the housing market, don’t despair yet.

Despite the dreary outlook, data shows the market might not be crumbling just yet.

In fact, the median U.S. home is selling for around $383,000 — only about $4,000, or 0.9%, less than the all-time high set in June 2022. This marks the smallest year-over-year drop in close to four months, according to Redfin.

Here’s what’s keeping prices elevated, and why you shouldn’t worry about a major housing correction in the near future regardless of what the Fed has planned.

Inventory is tight, keeping prices high

High mortgage rates may be keeping some buyers at bay, but they’re also deterring plenty of potential sellers who are locked into low rates from just a couple years ago.

The average 30-year fixed mortgage rate hit 6.71% last week, more than double what it averaged in 2021.

New listings plunged 27% compared to last year during the four weeks ending June 25 — the largest drop since the start of the pandemic. That’s also pushed the total number of homes for sale down by 11% — the first double-digit decline in over a year.

A lack of inventory means that with fewer options for buyers to choose from, they’re snagging homes faster than they’re being listed, which in turn keeps prices afloat.

Read more: 3 big mistakes people make with cash back credit cards that cost them every time they swipe

What does this mean for Americans entering the market?

It may not be a proper housing correction, but it’s safe to say buyers and sellers alike are finding the conditions challenging.

“The market isn’t nearly as fast as it was 18 months ago, when homes were flying off the market for well over asking price, and it’s not as slow as it was six or seven months ago, when mortgage rates first shot up,” said Oakland, California Redfin Premier agent Andrea Chopp.

Trying to follow the trends on a national level can be tricky. The typical property may be going for its asking price, but June was only the second month this has occurred since August 2022. And although sale prices are dropping the most in big metros like Las Vegas and Phoenix, areas like Milwaukee and Miami are seeing a rise.

Chopp says buyers should be aware that some desirable homes are attracting several offers and selling above asking.

“And sellers should know that their home may not attract as much competition as their neighbor’s home did two years ago, but it will sell if they price it fairly and put effort into marketing,” Chopp adds.

“Things like making small repairs and staging are important again.”

What to read next

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Source: finance.yahoo.com

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ICE initially announced the merger with its rival, mortgage software firm Black Knight, in May 2022. The FTC then sued ICE to block the acquisition in March 2023.

The FTC alleges that a merger between the two largest providers of home mortgage loan origination systems and other key lender software tools will drive up costs, reduce innovation and reduce lenders’ options for the tools used to generate and service mortgages. 

One month later, the FTC opened a new front in the fight against the planned acquisition.

In April 2023, the agency petitioned a California federal court to issue a temporary restraining order (TRO) and preliminary injunction (PI) that prevents ICE from going forward with the deal to buy Black Knight. The goal was to give the commission time to pursue in-house litigation against the merger.

“Preliminary relief is warranted and necessary,” a complaint filed in the U.S. District Court in San Francisco in April said. 

“Should the Commission rule, after the full administrative proceeding, that the Acquisition is unlawful, reestablishing the status quo would be difficult, if not impossible, if the Acquisition has already occurred in the absence of preliminary relief.”

The federal preliminary injunction action hearing is set to begin on July 24.

In an effort to quell antitrust concerns regarding the merger, ICE and Black Knight amended the terms of the proposed deal to reduce Black Knight’s valuation to $11.8 billion — about 11% lower than its valuation when the agreement was announced last year. 

Black Knight also sold its loan origination system, Empower, to a subsidiary of Canada’s Constellation Software Inc. in March, prior to the FTC’s suit against ICE. 

The transaction is still pending regulatory approval, and ICE expects to close in the second half of this year, the company reiterated in its first quarter earnings call. ICE declined to comment.

Source: housingwire.com