new construction

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Newly constructed home sales and loan applications ticked down in June as buyers balked at higher mortgage rates, but activity remained above last year’s, according to the Mortgage Bankers Association.

Loan volume slowed slightly this month, reporting a 5% decrease since May, according to the MBA’s Builder Application Survey. But new home lending is holding strong year-over-year — applications are up 26.1% from last June.

Sales in this segment followed the same pattern: the BAS seasonally adjusted new single-family sales rate was 687,000 units this month, a 9% monthly decrease, but a 10.8% yearly increase. Unadjusted new home sales reached 60,000 in June, compared to 64,000 in May. 

“New home purchase activity continues to be a bright spot, as both new home applications and home sales were up on an annual basis,” Joel Kan, MBA’s vice president and deputy chief economist, said in a press release. “Rising mortgage rates in June likely caused some pullback in purchases over the month.”

The average 30-year fixed mortgage rate hovered around 6.7% throughout June, according to Freddie Mac.

These rates have the biggest impact on the existing home market, where they are likely scaring away would-be sellers from listing, furthering the industry’s housing inventory problem. This June, there were 13.8% fewer homes for sale and 29.1% fewer newly listed homes than last year, according to Redfin data.

But the new home market has been stronger than expected, Doug Duncan, Fannie Mae’s chief economist, noted in his latest economic report.

Builder sentiment, on the other hand, is up this month according to the National Association of Home Builders/Wells Fargo Housing Market Index. It’s at its highest since last July. 

“The lack of resale inventory means prospective home buyers who have not been priced out of the market continue to seek out new construction in greater numbers,” Robert Dietz, the chief economist at NAHB, said in an article about the index. 

At the same time, Dietz says builders are worried about high mortgage rates and supply-side challenges despite recent cost stabilizations. New home construction rates soared in May, then shrunk back slightly in June.

The BAS said June’s average loan size was $400,281, marginally less than May’s average of $403,581. Conventional loans remain the most popular, making up 65.5% of all loans. Federal Housing Administration loans follow at 24.1%. FHA loans made up slightly more of the total loan pool in June, gaining some ground from conventional loans.

Both Department of Veterans Affairs and Department of Agriculture loan proportions remained unchanged, making up 10% and 0.3% respectively.

Source: nationalmortgagenews.com

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With elevated mortgage rates sidelining both home buyers and sellers, existing home sales fell in June, according to the latest report from the National Association of Realtors (NAR). Sales were also down significantly from a year prior.

Total existing home sales slipped 3.3% in June from the prior month to a seasonally adjusted annual rate of 4.16 million. Year-over-year, sales dropped 18.9% from 5.13 million in June 2022.

“The first half of the year was a downer for sure with sales lower by 23%,” said Lawrence Yun, NAR’s chief economist. “Fewer Americans were on the move despite the usual life-changing circumstances. The pent-up demand will surely be realized soon, especially if mortgage rates and inventory move favorably.”

The median existing-home price in June for all housing types – which includes single-family homes, condos and townhouses – was $410,200, the second-highest price of all time and down 0.9% from the record-high of $413,800 in June 2022. The monthly median price surpassed $400,000 for the third time, joining June 2022 and May 2022 ($408,600). Also noteworthy, prices rose in the Northeast and Midwest but waned in the South and West.

We’ve seen home sales drop on an annual basis since the Federal Reserve began hiking the benchmark rate in spring of 2022. Mortgage rates have settled into the 6% to 7% range over the last three months, depressing existing home sales.

Total housing inventory recorded at the end of June was 1.08 million units, unchanged from May, but down 13.6% from June 2022 (1.25 million). Meanwhile, unsold inventory sits at a 3.1-month supply at the current sales pace, up slightly from 3.0 months in May and 2.9 months in June 2022, NAR said.

“Home sales fell but home prices have held firm in most parts of the country,” NAR’s Yun added. “The national median home price in June was slightly less than the record high of nearly $414,000 in June of last year. Limited supply is still leading to multiple-offer situations, with one-third of homes getting sold above the list price in the latest month.”

Although all four regions experienced year-over-year sales declines, the Northeast fared better while the Midwest held steady, and the South and West posted decreases.

Zooming in on the Northeast, existing-home sales there grew 2.0% from May to an annual rate of 510,000 in June, down 21.5% from June 2022. The median price was $475,300, up 4.9% from the prior year. In the Midwest, existing-home sales remained unchanged from one month ago at an annual rate of 990,000 in June, decreasing 19.5% from one year ago. The median price there was $311,800, up 2.1% from June 2022. In the South, existing home sales disappointed as they faded 5.4% from May to an annual rate of 1.91 million in June, a decrease of 16.2% from the previous year. The median price was $366,600, down 1.2% from June 2022. Lastly, in the West, existing-home sales declined 5.1% from the previous month to an annual rate of 750,000 in June, down 22.7% from one year ago. The median price was $606,500, down 3.4% from the same period last year.

The good news is that the housing recession that was predicted by some economists has not materialized, noted Lisa Sturtevant, chief economist for Bright MLS. 

”With positive inflation news and a strong labor market, the possibility that the Fed will be able to bring the economy in for a “soft landing” is improving. As the economy normalizes, however, we are still in the midst of a very unusual housing market, with so much inventory locked down as a result of the low pandemic mortgage rates,” said Bright MLS’s Sturtevant.

Properties in June on average remained on the market for 18 days, identical to May but up from 14 days in June 2022. Conversely, 76% of homes sold in June were on the market for less than a month. First-time buyers were responsible for just 27% of sales in June, down from 28% in May and 30% in June 2022, illustrating the affordability crisis at play.

For transaction types, all-cash sales accounted for 26% of purchases in June, up from 25% in both May 2023 and June 2022. Meanwhile, individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in June, up from 15% in May and 16% the previous year.

Distressed sales, which include foreclosures and short sales, represented only 2% of sales in June, virtually unchanged from last month and the prior year.

In this market, the lack supply remains the main constraint but new housing construction should help alleviate some of the supply pressures, according to Sturtevant. As a result, homebuilders kept capitalizing on a lack of competition and injected supply into the marketplace. However, inventory will still be sparse and prices “will have nowhere to go but up in the second half of 2023.”

“Existing home sales will continue to remain suppressed while both sides of this market are feeling the heat of affordability constraints, and we will likely continue to see buyers turning their eyes towards the new construction market – which can offer incentives to tip the scales in favor of buyers’ budgets as well as offer more available inventory,” added Nicole Bachaud, a senior economist at Zillow.

Source: housingwire.com

Apache is functioning normally

Yes, we’ve all heard it. Buying a home today might seem like the most unaffordable, and therefore impossible, it’s ever been. Home prices are near record levels, pushed up by bidding wars erupting on anything well-situated and move-in ready. Plus, mortgage rates are nearing 7%.

But here’s the thing: The baby boomers had it worse.

In May of this year, the typical buyer spent just under a third of their household income, about 32.8%, on housing. As uncomfortable as that might be, it’s not even close to how much buyers plunked down in the early 1980s.

In 1981, the same year the AIDS virus was identified, the Iran hostage crisis came to an end, and “Raiders of the Lost Ark” topped the box office charts, homebuyers that September and October spent 51.3% of their household income on their mortgage payments.

Let that sink in for a moment.

Furthermore, that percentage doesn’t even include what they paid for utilities, property taxes, insurance costs, and homeowners association fees.

Buying a home is “not as unaffordable as it’s ever been,” says Realtor.com® Chief Economist Danielle Hale. But, “in the grand scheme of things, housing is pretty unaffordable right now.”

To figure out how affordable buying a home has been over the past 50 years, the Realtor.com data team analyzed data going back to 1973. We looked at monthly existing single-family home prices from the National Association of Realtors®, weekly mortgage interest rates for 30-year fixed loans from Freddie Mac, and median annual household income from the U.S. Census Bureau. Then we calculated the typical mortgage payment of a buyer taking out a loan on the median-priced home and what percentage of their household income that would eat up.

The analysis doesn’t factor in regional price differences, new construction, or the percentage of income that individual buyers spent on homes.

“If you go back in history, you can find a period where housing is more unaffordable than it is now,” says Hale. “But you have to go back almost 40 years.”

Why today’s buyers wouldn’t want to purchase a home in 1981

In the fall of 1981, homes were cheap by today’s standards.

The typical single-family home cost just $66,125—about six times less than the cost this past May, according to the most recent data from NAR.

However, the typical household was bringing in only about $19,074 in 1981, according to U.S. Census Bureau data. And mortgage rates topped 18% that fall. (And you thought 7% was rough.)

Those turbo-sized rates meant that 99.5% of a buyer’s first year of mortgage payments was going toward just the towering amount of interest on the loan. The buyer didn’t pay down 10% on the principal of the balance until the 18th year of the loan, assuming the buyer didn’t refinance—which most buyers did. (This calculation includes a 20% down payment.)

Today’s average family is earning about $73,505 a year. But in May, they were contending with median existing-home prices of $410,100 and mortgage rates hovering in the mid-6% range and which have since risen to the high 6% territory. About 85% of their first year’s mortgage payments is going to interest.

One important difference is that instead of waiting nearly two decades to have 10% of their principal paid off, they achieve that milestone by year seven.

“Mortgage rates play a really substantial role in how affordable housing is at any time, especially since so many buyers buy with a mortgage,” says Hale.

Uncomfortable similarities between 1981 and 2023

There are a few similarities between then and now. Inflation was soaring in the early ’80s, causing the U.S. Federal Reserve to hike interest rates. (Sound familiar?) The nation was also in a full-blown recession in 1981. Fast-forward 42 years, and the nation appears to be flirting with another downturn.

The number of home sales slowed in the early 1980s as well as in this post-pandemic housing market as fewer folks can afford to buy due to higher mortgage rates.

Then, as now, most of those purchasing homes earn more than the median income—unless they had very generous family members, stock options, or trust funds. Or they’re existing homeowners who can put the equity they built in their last home into their new one.

“Boomers have been saying things were harder when we were young for a long time. And in some respects, they are right,” says Hale. “But in other respects, they don’t have the same amount of student loan debt and child care costs that young people have today.”

Plus, once mortgage rates fell, most folks who purchased homes in the early 1980s had refinanced their loans to lock in the new rates and “drastically” lower their monthly mortgage payments. By 1986, rates had fallen back down to the single digits.

Recessions and pandemics may be good times to buy homes

As counterintuitive as this may seem, recessions may be financially advantageous for buyers to purchase homes—if they remain employed and have the funds to do so. That’s because interest rates usually (but not always, as the early 1980s demonstrated) fall during economic downturns. That makes homebuying more affordable.

Over the past 50 years, homes were the most affordable as the country climbed out of the Great Recession. In early 2012 and 2013, buyers were spending about 14%—or less—of their income on a home. That’s because mortgage rates were below 4%.

The same thing happened in the early days of the pandemic. The economy ground to a halt as stay-at-home orders proliferated and mass layoffs ensued. To stimulate the economy, the Fed cut interest rates and mortgage rates fell below 3%—for the first time ever.

Those low rates triggered the big run-up in prices and offset those gains. Since buyers were spending less on interest, they could afford to purchase more house. The result? In spring 2020, buyers were spending just under 18% of their income on housing.

“Affordability is one of the factors that kicked off the buying frenzy that we saw in the early part of the pandemic,” says Hale.

It wasn’t until mortgage rates climbed above 4% in March 2022 that buyers began to get priced out. That month they spent just under 25% of their income on housing. As rates ticked up and affordability worsened, more buyers left the market and fewer homes went up for sale (as sellers didn’t want to give up their low rates).

The situation has only gotten worse, with buyers spending nearly a third of their income on housing in May.

“When housing is unaffordable, it’s very tempting to stretch your budget,” says Hale. But with inflation, rising property taxes, and high energy bills, “now’s probably not a good time to do that.”

Source: realtor.com

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Mortgage rates dropped to 6.78% this week, the biggest weekly decline since mid-March, as investors digested a raft of mixed incoming economic data.

Freddie Mac’s Primary Mortgage Market Survey, which focuses on conventional and conforming loans with a 20% down payment, shows the 30-year fixed rate averaged 6.78% as of July 20, down from last week’s 6.96%. By contrast, the 30-year was at 5.54% a year ago at this time. 

“As inflation slows, mortgage rates decreased this week,” said Sam Khater, Freddie Mac’s chief economist in a statement. “Still, the ongoing shortage of previously owned homes for sale has been a detriment to homebuyers looking to take advantage of declining rates. On the other hand, homebuilders have an edge in today’s market, and incoming data shows that homebuilder sentiment continues to rise.”

Homebuilder sentiment rose for the seventh consecutive month and new construction activity slightly pulled back as the cost of materials picked up. Simultaneously, retail sales improved modestly and industrial production declined on waning demand.

Other mortgage rate indexes showed mixed results: 

HousingWire’s Mortgage Rates Center showed Optimal Blue’s 30-year fixed rate for conventional loans at 6.74% on Wednesday, compared to 6.85% the previous week. However, the 30-year fixed rate for conventional loans was at 7% at Mortgage News Daily on Thursday, up 13 basis points from the previous week.

After June’s relatively positive inflation data, the market’s attention has turned to the upcoming FOMC meeting.

“Though inflation has slowed, the level remains well above the 2% target and investors expect the Fed to hike interest rates in pursuit of this target,” said Hannah Jones, economist at Realtor.com, in a statement. “While the Federal Funds rate does not directly impact mortgage rates, it installs a floor beneath the cost of borrowing, meaning mortgage rates are likely to remain elevated for the time being.”

George Ratiu, chief economist at Keeping Current Matters, on the other hand, stressed that the spread between the 30-year fixed-rate mortgage and the 10-year Treasury remains north of 300 basis points. To Ratiu, it is a clear signal that investors are still pricing a premium for the higher macro risk.

This ongoing uncertainty permeating financial markets has a direct impact on mortgage rates.

As expected from the traditional vacation season, consumers are more focused on services and travel experiences this summer rather than buying products, added Ratiu.

At today’s rate, the mortgage payment for a median-priced home is about $2,300, a 13% premium compared to last year’s peak-price period. Ironically, the elevated mortgage rates are not making a dent on home prices, which remain high because of a depleted inventory. Hence, the lower mortgage rates bring little relief to hopeful homebuyers. 

“Many home owners feel ‘locked-in’ by their current mortgage rate and are therefore choosing to hold off on listing their home for sale,” said Realtor.com’s Jones. “As a result, after more than a year of new listings lagging behind the previous year’s pace, the number of homes for sale has tracked lower than last year’s levels for the past four weeks. In light of limited home inventory, buyers are turning to new construction and builders are picking up the pace of construction to fill the gap.”

Economists largely agreed that current market dynamics are likely to persist until affordability and inventory gains are made.

Source: housingwire.com

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Washington, DC
CNN
 — 

Mortgage rates ticked lower for the third week in a row as investors absorbed strong signals from the housing industry and last week’s pause on rate hikes by the Federal Reserve after 10 consecutive hikes.

The 30-year fixed-rate mortgage averaged 6.67% in the week ending June 22, down from 6.69% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 5.81%.

Mortgage rates have remained over 5% for all but one week during the past year and even went as high as 7.08%, last reached in November, but have been coming down since the end of May.

“Mortgage rates slid down again this week but remain elevated compared to this time last year,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Potential home buyers have been watching rates closely and are waiting to come off the sidelines. However, inventory challenges persist as the number of existing homes for sale remains very low. Though, a recent rebound in single-family housing starts is an encouraging development that will hopefully extend through the summer.”

On Thursday, a separate report from the National Association of Realtors showed that housing inventory is at about half of pre-pandemic levels. Earlier this week, the Census Bureau reported that home building surged in May, rising 21.7% from April.

The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit.

Stubborn inflation is cooling somewhat

The rate for a 30-year fixed-rate mortgage has been volatile amid lagging economic indicators and the Fed’s recent decisions on rates. But good news for new construction and inflation are helping to bring interest rates down.

“While the headline Consumer Price Index dropped significantly in May to 4%, the core CPI — which includes goods and services excluding volatile food and energy — has not retreated as much as the overall inflation in recent months, creating a troubling situation for policymakers,” said Jiayi Xu, economist at Realtor.com.

“In the coming months, we may see a faster slowdown in inflation because the growth in the shelter index, the largest contributor to inflation growth, has passed its peak and started to trend down in April,” she said.

Meanwhile, last week the Fed opted not to raise its key lending rate, choosing to wait for additional data and see how recent rate increases are influencing price growth and the real economy in an effort to cool inflation to a 2% level.

The Fed does not set the interest rates that borrowers pay on mortgages directly, but its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasuries, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does and investors’ reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.

“As the inflation is well above the 2% target and the labor market is still strong, [the Fed] signaled that the federal funds rate will be half a point higher than previously expected at the end of 2023, which is also half a point higher than the current rate,” Xu said. “In other words, borrowing, including home purchases, will likely remain expensive through the remainder of the year.”

Mortgage rates will stay higher this year

With the potential for additional rate hikes ahead, mortgage rates will remain elevated throughout the remainder of the year, said Xu.

“As a result, affordability will continue to be an important factor in buyers’ home purchasing decisions,” she said.

Home buyers continue to flock to relatively inexpensive markets where homes are listed below the national median price, leading to notable price growth in these otherwise affordable areas, according to a recent report from Realtor.com

“The heightened competition in these markets may worsen the conditions faced by buyers with financial constraints, particularly due to the already limited supply of affordable homes,” said Xu.

New home construction surged in April, a sign of confidence by builders that buyers will be there to snap them up.

“While the rise in new construction is encouraging, there is a pressing need to build homes catering to all income levels,” said Xu.

There is a shortage of nearly 300,000 homes that are affordable to middle-income earners, who are hurt most by the shortage of inventory and low levels of affordability, according to recent research by the National Association of Realtors and Realtor.com.

— CNN’s Alicia Wallace contributed to this report.

Source: cnn.com

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U.S. single-family homebuilding fell in June, but permits for future construction rose to a 12-month high on the weakness of the existing home sales market. The decline in housing starts came after a massive 18.7% surge in May, which propelled the number of starts on single-family projects to an 11-month high.

Housing starts in June dropped to a seasonally adjusted annual rate of 1.43 million, under economists’ expectations for 1.48 million, according to the U.S. Census Bureau. That was down 8.1% from a year ago.

In June, only 600,000 existing homes were listed for sale across the U.S., noted Bright MLS Chief Economist Lisa Sturtevant. 

“While new construction will not immediately solve the supply problem in the housing market, the recovery in the homebuilding industry and the delivery of more new homes is essential for meeting the nation’s housing needs and easing housing affordability challenges for prospective home buyers,” she said in a statement.

Overall, single‐family housing starts in June came in at a rate of 935,000, 7% below the revised May figure of 1,005,000. The June rate for units in buildings with five units or more was 482,000.

Issued permits, an indicator for future completions, also decreased 3.7% overall from May, and they were 15.3% lower from a year ago. But single-family permits increased (+2.2%) while the more volatile multifamily permits declined (-12.8%). June permits increased in the Midwest (+5.9%) and declined in South (-2.6%), West (-4.0%), and Northeast (-23.4%).

Completed homes fell 3.3% from the prior month, but were 5.5% above the May 2022 level.

The number of single-family homes under construction remains high. Meanwhile, a record number of multifamily units are under construction even if the pace is slowing. 

“When these units are completed, it should put some downward pressure on prices,” said First American Deputy Chief Economist Odeta Kushi.

Homebuilder sentiment regarding single-family sales in the next six months dropped slightly in June, pointing to more uncertainty. This comes at a time when increasing new home inventory is critically important as existing homeowners aren’t moving, handcuffed to their low mortgage rates, noted Nicole Bachaud, a senior economist at Zillow.

Stubbornly high mortgage rates might pose a threat to builders’ ability to bring more homes on the market. Reduced affordability alongside ongoing supply-side challenges and tighter lending standards for acquisition, development and construction (AD&C) loans could also throttle builder momentum, added Kushi.

Source: housingwire.com

Apache is functioning normally

Today let’s talk about PrimeLending, a PlainsCapital Company, which is a top-10 mortgage lender that does business in all 50 states.

Perhaps their biggest claim to fame is their 96% customer satisfaction rating given to their fleet of 1,500 loan officers.

They certainly seem to pride themselves on making their customers happy, with the slogan “Home Loans Made Simple.”

They also have a mascot named “Mo,” short for momentum, that is a real live buffalo living near Fort Worth, TX.

Let’s learn more about who they, what types of loans they offer, and why you might use them on your next purchase or refinance transaction.

Who Is PrimeLending?

  • A direct-to-consumer mortgage lender owned by the PlainsCapital Company that has been around since 1986
  • A wholly owned subsidiary of PlainsCapital Bank (that is also a wholly owned subsidiary of Hilltop Holdings Inc.)
  • Publicly traded under the symbol (NYSE: HTH)
  • Funded more than $22 billion in home loans during 2021
  • Most active in the states of California and Texas but licensed nationwide

First a little bit about their history – PrimeLending started out back in 1986, which if you’re good at math, is just over 35 years. Back then, they had just 20 employees.

Today, they’ve got more than 3,000 employees throughout the nation. And since that time, they’ve apparently helped more than 500,000 Americans purchase a home, fix up a property, or refinance an existing mortgage.

They seem to excel in home purchase lending, as evidenced by the fact that they’ve been a top-10 purchase lender from 2012 to 2017, per data from Marketrac, a CoreLogic company.

They’re also ranked 6th for retail home loan volume by Scotsman Guide, and 11th in volume overall. It’s unclear if that’s overall or a specific category of lender.

If you’re curious who owns them, they’re a PlainsCapital Company that is also a wholly owned subsidiary of PlainsCapital Bank, which is owned by Hilltop Holdings Inc.

Confused yet? Yeah, there’s a lot of corporate structuring going on, but basically their a billion-dollar financial holdings company based out of Dallas, Texas with thousands of employees.

Hilltop actually acquired PlainsCapital and PrimeLending as recently as November 2012.

In late 2022, PrimeLending launched a joint venture with Texas home builder Kindred Homes called Kindred Home Loans.

PrimeLending will provide financing to home buyers in Kindred Homes’ communities in the state of Texas.

Applying for a Mortgage with PrimeLending

  • They are a consumer direct lender with no middlemen
  • You get connected with one of their loan officers nearby
  • And can apply online, by phone, or in-person
  • Their digital, mostly paperless home loan process is known as Loanplicity

The company relies on a network of mortgage loan officers throughout all 50 states to help borrowers apply for a mortgage.

If you’ve already made contact with a loan officer, you enter their name on the PrimeLending website and it’ll populate a list. Once selected, they become your point of contact.

If you don’t yet have an assigned loan officer, you can enter your zip code or city and choose one near you.

The website will list a variety of locations near you (assuming you live next to a lot of PrimeLending offices). Then you can then see all the loan officers at that branch and choose one based really on name only.

While the loan officers have their own mini websites, they don’t seem to feature any unique qualities, other than contact information, which I feel would make them stand out more.

They could show their strengths and specialties, but at the moment they seem to have boilerplate content that doesn’t differ from one loan officer to the next.

Anyway, from there you’d just hit the “apply now” button or you could call their direct phone line to get the home loan process underway.

You can also apply in person if that’s your thing, though most folks these days like to do things remotely.

Loanplicity Is Their Digital Home Loan Process

  • They just launched their digital mortgage offering known as Loanplicity
  • Allows you to apply online or get pre-qualified using their award-winning application process
  • You can connect financial accounts or upload documents using your smartphone
  • Also lets you pay fees using PayPal or connect to a loan officer at any time if you need help

In February 2020, PrimeLending launched its version of a digital mortgage known as Loanplicity.

It allows you to apply online with their “award winning application process,” or get pre-qualified to determine how much home you can afford.

Once you submit your loan, you can securely connect financial accounts or take photographs of documents with your smartphone for upload.

They also let you pay fees along the way via PayPal, perhaps for things like an appraisal or application fee (deposit).

At any point during the process, you can also call, text, or email your loan officer for assistance.

And you can see loan status in real-time to determine where you’re at in the loan process.

The one negative at the moment is there doesn’t seem to be a mobile app available.

If you’re a prospective home buyer, their PrimeLending Approval AdvantEDGE will allow you to see how much home you can afford.

What PrimeLending Offers to Its Customers

  • Home purchase loans and refinance loans
  • Home improvement and renovation loans
  • New construction loans
  • Conforming and jumbo loan amounts
  • Government loans including VA, FHA, and USDA loans
  • Fixed-rate and adjustable-rate options available
  • Reverse mortgages

In the fixed-rate department, they advertise both the 30-year and 15-year fixed, which are by far the most popular. It’s unclear if they offer other terms in between and beyond.

For ARMs, they discuss the 3/1, 5/1, 7/1, 10/1, which happen to be the most popular ARM offerings available. All are hybrids with a fixed period followed by an adjustable period.

They’ve got the usual conforming stuff backed by Fannie Mae and Freddie Mac, along with a variety of government loans like FHA, VA, and USDA.

PrimeLending also advertises an FHA cash-out refinance, which is a little less usual.

When it comes to jumbos, they offer LTVs as high as 95% with both fixed-rate and adjustable-rate options.

The company seems to have the new construction and renovation market well covered, with lots of offerings including an FHA 203k loan, lot loans, HUD REO and USDA with repair escrow, Fannie Mae HomeStyle, and jumbo renovation loans.

In April 2023, they announced the availability of reverse mortgages via the FHA’s home equity conversion mortgage (HECM) program.

PrimeLending Mortgage Rates

  • They don’t advertise their interest rates online
  • Nor can I find a ratesheet to get more information on their pricing
  • So if/when you get a quote from PrimeLending
  • You may also want to comparison shop with other lenders to see where they stand

Sadly, the company doesn’t openly advertise their mortgage rates, so it’s impossible to know if they’re good, bad, or just plain average.

I prefer companies that advertise their rates, though you can argue that they aren’t all that meaningful because rates can vary tremendously from borrower to borrower at the same company.

However, it does mean that if you apply with PrimeLending, you may want to shop your rate with other lenders to see where you stand.

And to determine if you can do better elsewhere, assuming you are interest rate-sensitive, which you generally should be.

Of course, many mortgage borrowers choose lenders for things other than the lowest rate, so it may not be super important to you.

The ability to actually close your loan on time can be just as important, if not more so.

PrimeLending Reviews

Now let’s talk about customer reviews, for which PrimeLending has a ton.

On Zillow, the company has a 4.99/5 rating from over 21,000 customer reviews. That’s near perfection and doubly amazing given the sample size.

Over at LendingTree, they’ve got a slightly less good 4.3/5 from about 1,000 reviews, along with a 93% recommended rating.

They are an accredited business with the Better Business Bureau (BBB) and currently hold an ‘A+’ rating based on complaint history.

If you search individual brick-and-mortar locations near you, they also tend to have very good Google reviews.

Why Choose PrimeLending for Your Mortgage Needs?

  • They are big on customer satisfaction and survey every customer after their loan closes
  • Some 40% of customers actually complete the surveys vs. the industry average 10-15%
  • Their 96% approval rating outperforms the usual 89% average seen with other lenders
  • The company also seems to keep things simple and stress-free
  • Have a digital loan process known as Loanplicity
  • Licensed to do business in all 50 states

While they used to lack some of the eye-catching technology other companies offer, such as Rocket Mortgage from Quicken Loans, their digital mortgage solution known as Loanplicity is now live.

And they seem to excel in customer satisfaction as well, meaning PrimeLending could be a good fit no matter how you apply.

For those who might favor a personal touch, as opposed to speaking to no one and just using a smartphone app to get through it, they could be the right choice.

Perhaps you need more guidance to make your loan decision, or simply like having someone on call to help you along the way.

As noted, their slogan is “Home Loans Made Simple,” meaning the process should be an easy one despite any obvious technology claims.

They also have a wide range of lending products to choose from to suit most borrowers in lots of different situations.

Now a couple of negatives. PrimeLending doesn’t offer a mobile app, nor do they make applying for a home loan as easy as I’d like.

Something as simple as an “Apply Now” button on their homepage could change that, as opposed to only their “Connect with a Loan Expert” button.

They also kind of lack that special quality that differentiates themselves from other lenders, so it’s unclear why a consumer would seek them out versus another bank for their mortgage needs unless pricing is unbeatable.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Builder confidence in the market for newly constructed homes rose another point in July according to the National Association of Home Builders (NAHB). The NAHB/Wells Fargo Housing Market Index (HMI) hit 56 in its seventh straight month of improvement. This is a 25-point gain since its December 2022 low and its highest level since June of last year.

NAHB Chief Economist Robert Dietz said the low inventory of pre-owned homes is shoring up demand for new homes and is pushing builder confidence up, “even as the industry continues to grapple with rising mortgage rates, elevated construction costs and limited lot availability.”

“The lack of resale inventory means prospective home buyers who have not been priced out of the market continue to seek out new construction in greater numbers. At the same time, builders are troubled over rising mortgage rates approaching 7 percent and continue to grapple with supply-side challenges, including ongoing scarcity of electrical transformer equipment and growing concerns about lot availability.”

Dietz continued, “Although builders continue to remain cautiously optimistic about market conditions, the quarter-point rise in mortgage rates over the past month is a stark reminder of the stop and start process the market will experience as the Federal Reserve nears the end of the ongoing tightening cycle.

“Given that shelter inflation accounts for roughly 40 percent of the Consumer Price Index, the best way to ease this largest source of inflationary pressure is to build additional for-rent and for-sale housing. There has been some commentary linking gains for housing construction with increased concerns for additional inflation, but this has the economics backwards. More housing supply is good news for future shelter inflation readings in the market. Furthermore, higher interest rates increase the cost of financing for building homes and developing lots.

Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate the traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The component gauging current sales conditions rose 1 point in July to 62 while the one charting forward-looking expectations fell 2 points to 60. However, Dietz points out that this decline is a reminder that housing affordability continues to be challenged by elevated interest rates. Perceptions regarding the traffic of prospective buyers increased 3 points to 40, also a 13-month high.

The July HMI survey also shows a lessening in the use of builder sales incentives. Only 22 percent of builders report cutting prices in July, down from 27 percent in May and 25 percent in June.  

The three-month moving averages for all regional HMI scores moved higher, The Northeast gained 5 points to 52, the Midwest edged up 2 points to 45, the South increased 3 points to 58, and the West posted a 5-point gain to 51.

Source: mortgagenewsdaily.com

Apache is functioning normally

For the seventh consecutive month, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) report rose month-over-month, gaining one-point to a reading of 56, according to a report released Tuesday.

This is the index’s highest reading since June 2022.

The NAHB/HMI report is based on a monthly survey of NAHB members, in which homebuilders are asked to rate both current market conditions for the sale of new homes and expected conditions for the next six months, as well as traffic of prospective buyers of new homes. Scores for each component of the homebuilder confidence survey are then used to calculate an index, with any number greater than 50 indicating that more homebuilders view conditions as favorable than not.

The NAHB attributes the continued rise in builder confidence to low existing home inventory.

“The lack of resale inventory means prospective home buyers who have not been priced out of the market continue to seek out new construction in greater numbers,” Alicia Huey, the chairman of the NAHB, said in a statement. “At the same time, builders are troubled over rising mortgage rates approaching 7% and continue to grapple with supply-side challenges, including ongoing scarcity of electrical transformer equipment and growing concerns about lot availability.”

With shelter inflation accounting for 40% of the Consumer Price Index, the NAHB says the best way to combat this is to build additional for-rent and for-sale housing.  

“There’s been some commentary linking gains for housing construction with increased concerns for additional inflation, but this has the economics backwards,” Robert Dietz, the NAHB chief economist, said in a statement. “More housing supply is good news for future shelter inflation readings in the market. Furthermore, higher interest rates increase the cost of financing for building homes and developing lots.”

Despite the rising interest rates and continued shelter inflation, builders have cut back their use of sales incentives, with just 22% of builders reporting that they cut prices in July, down from 25% in June and 27% in May.

The NAHB reported that homebuilders’ gauge of current sales conditions rose one point to 62. The gauge measuring traffic of prospective buyers increased three points to 40, the highest reading since June of 2022, but the component charting sales expectations over the next six months, fell two points to 60. According to the NAHB, this serves as a reminder that housing affordability continues to be challenged by elevated interest rates.

“Although builders continue to remain cautiously optimistic about market conditions, the quarter-point rise in mortgage rates over the past month is a stark reminder of the stop and start process the market will experience as the Federal Reserve nears the end of the ongoing tightening cycle,” Dietz said.

Regionally, the three-month moving averages for HMI rose in all four regions, with the West gaining five points to a reading of 51, the South increasing three points to 58, the Midwest rising two points to a reading of 45, and the Northeast rose five points to 52.

Source: housingwire.com

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SAN ANTONIO – The current average 30-year fixed mortgage interest rate is higher than 7%, which is a huge swing from the sub-3% rates we saw during the pandemic. So what impact are we seeing on the local housing market?

Real Estate Agent Ronnie Trevino with Keller Williams Heritage joined Leading SA to help break it all down.

“Well, rising interest rates, inflation, and increase in housing inventory have definitely caused homes to stay on the market much longer than they did last year. However, the fact that the average home price has only come down about half a percent, according to the San Antonio Board of Realtors’ latest press release, is pretty promising for prospective sellers and investors,” Trevino said.

Even though San Antonio home prices have increased, it is still a lower cost of living than in other parts of the state.

“San Antonio’s median home sales price remains relatively affordable. And there are several reasons why San Antonio is in high demand. We have, first of all, we have a great job market. We have affordable housing, and we have population growth and military presence. All these factors which could make San Antonio one of the best real estate markets in the nation. So we’re holding steady as compared to those other major metropolitan areas,” Trevino said.

However, the fact remains that interest rates are a big factor in home sales, and 7% is higher than most current buyers are used to seeing. Other than earlier this year, it is the highest average the country has seen since 2001.

Trevino expanded on the interest rates in San Antonio and what’ll happen after it eventually drops.

“I don’t think that they’re going to come down any time soon. I feel like we’re going to hold steady at 7% or above for a while, but I think they will eventually come down. And when they do, it’s going to put San Antonio on the heat radar again when it comes to housing,” Trevino said.

As for people buying homes in San Antonio, Trevino said there are noticeable trends in the market.

“The trend that we’re seeing now or that I’ve been seeing more and more of is that you know, another thing to consider is that we saw a 14% decrease in existing home sales while new construction saw a 36% increase. So we’re seeing a lot of younger families go to the far west side outside 1604 towards the Castroville area. There are a lot of affordable new construction homes that are available for sale there. And a lot of these builders are able to provide great incentives by utilizing their lenders. So a lot of people are seeing this as an affordable option and are taking that route,” Trevino said.

And as we see more and more apartment buildings taking shape around the community, renters aren’t seeing any reprieve from the high costs either.

Trevino explained how he believes prices will not drop anytime soon for renters.

“Rents are holding steady, and actually, they’re increasing. Slow but steady. We saw a 3% increase in rent from last year to this year. And, you know, I think one of the major factors and rents, we see all these new buildings coming up. Well, the percentage of single people living on their own has also increased. So I think that we need a lot more spaces to fill. So, yeah, rents I don’t think are going to come down any time soon,” Trevino said.

Source: ksat.com