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Apache is functioning normally

Apache is functioning normally

While the first four and a half months of 2023 had significantly more housing demand than we expected coming out of the ice-cold fourth quarter, the real story of the year is the restricted supply of homes to meet that demand. Low inventory continues to be a major issue for the market, and we’re seeing signs that there’s no end in sight. 

What’s normal for this time of year?

Normally in the spring — the pandemic years notwithstanding — we see inventory rising as sellers put their homes on the market readying for the summer home-buying peak. In typical years, the low point for homes on the market is mid-February. This year that low point was 10 weeks later, in late April as the quantity demanded exceeded the quantity supplied for homes during the entire first quarter.

In this chart we’re showing the inventory curve of unsold single family homes weekly for each year. Each line here is a year. The pandemic years’ inventory are the lines at the bottom. From May 2020 through March 2021, the market was characterized by few sellers and ravenous buyer demand. You can see how last year inventory started rapidly increasing in the second quarter as mortgage rates rose. That’s the light red line. Later in 2022 inventory had a second burst of inventory growth in September, which was very unusual, and was a reflection of how dramatically homebuyer demand slowed as mortgage rates spiked over 7%.

As of mid-May 2023, there were only 424,000 single family homes on the market across the country. The lowest point was officially in mid-April. Available inventory of homes for sale is starting to inch up 1% per week now. Contrast that with the same period in 2022, when inventory was climbing as much as 6% weekly. 

Why is inventory so restricted this year?

The first half of this year has seen significantly more demand than we expected, and fewer sellers, so inventory has fallen. It’ll take sellers to emerge, or buyers to drop out, for active inventory to finally rise again. We saw last year how abruptly and completely buyers could freeze when the tides turn against them. 

This article is part of our ongoing 2023 Housing Market Forecast series. After this series wraps, join us on May 30 for the next Housing Market Update Event. Bringing together some of the top economists and researchers in housing, the event will provide an in-depth look at the top predictions for this year, along with a roundtable discussion on how these insights apply to your business.  To register, go here.

With the debt ceiling crisis in Congress, we now have a new wrinkle that could slow the housing market. Mortgage rates have climbed to 7% for the first time since October as the uncertainty of the potential default looms over us. Home buyers are sure to feel this cost pain. If it lasts for very long, inventory will rise.

Inventory of homes could come from three possible seller sources: existing homeowners who trade up or down; investors who are selling to perhaps de-leverage or unload newly unprofitable properties; or distressed / forced sellers — usually people out of work because of a slowing economy. None of those groups has emerged as home sellers yet this year.

With high interest rates making it harder for current homeowners to trade up (or even down), especially when they likely have a low mortgage on their current home, most of them just aren’t interested in moving. But even those who are moving, due to life events for example, are often holding their existing home as an investment property, even when they buy the next home, because they’re locked in at a low rate. Result: no new inventory.

Why aren’t investors selling even as mortgage rates have climbed and made some properties less profitable? In addition to cheap financing, investors who own rental properties have enjoyed another powerful windfall in recent years: low levels of unemployment leading to rising rents. Most investors, especially the mom-and-pop owners of 1-4 homes which make up 90%+ of all real estate investors, have fixed-rate financing.

So when rates rise, the next investment becomes more expensive and less desirable. Owners of big apartment buildings are more likely to have variable financing, and we’re starting to see some of those owners be caught in unsustainable debt. That impact of commercial real estate owners has not been seen in the smaller investors market at all. 

Americans are still near record levels of employment, so there has been no notable downward pressure on rents. Even if it’s harder to unload a rental property than it was 18 months ago, the vast majority of those deals are still very profitable. Result: no new inventory.

This record level of employment also means that we have record-few mortgages in any stage of delinquency right now. Based on this measure, American homeowners are in really strong financial shape. They’re well-employed, with cheap mortgages, and a lot of equity. Unless that equation dramatically, we won’t see inventory from distressed sellers. 

What’s next?

The question for the rest of the year is how quickly the dark red line on the chart above climbs. Does demand weaken again like last year? That’s going to be a question of mortgage rates and the economy.  Does the debt ceiling crisis break worse or get resolved? Do we have big job losses coming? Do we have banking crises or other shocks coming? Even the uncertainty itself is a risk to derail housing demand from here. 

If these major shocks are held at bay, this year’s curve will look more like most of the years on this chart, and we’ll end the year with under 500,000 homes on the market again — staying in this pattern of incredibly restricted supply.

If the economy tanks hard, then the curve could pick up quickly like last year. This is a real possibility, but there’s no indication anywhere in the data yet that any surge of inventory is imminent.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author responsible for this story:
Mike Simonsen at [email protected]

To contact the editor responsible for this story:
Brena Nath at [email protected]

Source: housingwire.com

Apache is functioning normally

Apache is functioning normally

After eight straight quarters of contraction, it looks like the slide in U.S. residential investment may be finished. The nascent rebound now underway is set to remove a major obstacle to ongoing economic expansion.

With new construction activity at the highest level in more than a year, the Federal Reserve Bank of Atlanta’s GDPNow tracker is projecting residential investment added 0.1% to growth in gross domestic product in the second quarter. Though it may not sound like much, that would mark the first positive contribution since early 2021.

The new-home market has been slowly coming out of the woods as falling materials costs and vanishing logistics constraints have allowed builders to work their way through pandemic-era backlogs. Limited availability in the resale market is also pushing many prospective buyers toward new construction, helping support demand even as mortgage rates remain elevated.

“Construction was at the center of the storm for the surge in inflation and the supply-chain turmoil of 2021 and 2022,” said Bill Adams, chief economist at Comerica Bank. “The recent good news for construction makes it easier to imagine a soft or at least soft-ish landing for the economy.”

Government data out earlier this week showed new construction surged in May by the most since 2016, and applications for permits to build — a proxy of future activity — also rose. The unexpected increase sent homebuilding stocks rallying to a fresh all-time high and helped explain why builder sentiment is the most upbeat in almost a year.

A growing number of prospective buyers are opting for new homes amid limited availability in the resale market, where high mortgage rates have had a big impact. Before the pandemic, existing properties made up about 90% of all homes for sale — a number that as of April was closer to 70%.

Monetary Policy

Much continues to hinge on the outlook for monetary policy. The Fed has already raised its benchmark interest rate by five percentage points in a little over a year, and further increases could start to weigh on new-home construction again, said Priscilla Thiagamoorthy, a senior economist at BMO Capital Markets.

“Now that the Fed has continued to signal that rate hikes are still at play, we won’t see further improvement from here,” Thiagamoorthy said. “If rates continue to rise more than one more time, that does risk the chance of a harder landing.”

Another risk is that the number of homes under construction could fall as backlogs ease and applications for permits lag the pace of housing starts. Elevated inventories of new homes could also make builders hesitant to boost output, which risks limiting upside momentum in residential investment.

Still, after subtracting from growth for the longest stretch since 2005-2009, home construction is finally poised to offer the economy some breathing room at a time when other sectors are starting to cool.  

Ahead of this week’s slew of housing data, Wells Fargo & Co. economists were anticipating residential investment to be a drag on GDP growth for the remainder of the year.

“Now, I would say some of the stronger-than-expected housing data means that there’s some upside risk to that forecast,” said Charles Dougherty, a senior economist at Wells Fargo. “We’re not looking for a massive run-up in new construction, but some modest pace seems very likely.”

Source: nationalmortgagenews.com

Apache is functioning normally

Apache is functioning normally

In March, a modest bump in homebuyer demand, combined with a decline in for-sale inventory, drove up home prices compared to the month prior. While home prices in many Western and pandemic boom markets are still well off their peaks, 40% of major markets have seen prices return to peak levels, according to Black Knight‘s mortgage monitor report.

Nationally, home prices rose by 0.45% in March on a seasonally adjusted basis, slightly stronger than the revised 0.43% increase from the prior month.

“The strengthening in home prices is the direct result of a second month of modest increases in sales volumes meeting a continually shrinking for-sale inventory,” Andy Walden, Black Knight vice president of enterprise research, said.

Cities in the Midwest and Northeast — Columbus, Ohio (+1.1%); Hartford, Connecticut (+1.0%); Cleveland, Ohio (+1.0%); Cincinnati, Ohio (+0.9%) and Baltimore, Maryland (+0.9%) — saw the largest home price increases, along with Miami, Florida (+0.9), which is leading the South. 

The only markets in the top 50 by population where seasonally adjusted prices are still falling are Austin, Texas (-0.7%); Salt Lake City, Utah (-0.12%) and San Antonio, Texas (-0.07%). Phoenix, Arizona and Dallas, Texas are effectively flat month over month.

The annual home price growth, however, continues to cool. Prices were up just 1.0% on an annual basis, a backward-looking metric that has been falling by 1.3-1.4% each month since the start of 2023.

While the annual home price growth rate is on track to fall to roughly 0% by April, low inventory levels will limit just how far that metric will fall in the coming month, Walden noted. 

The supply of active listings fell for the sixth straight month in March, marking the lowest level since April 2022. March also saw a deterioration in supply in 90% of major markets.

New listings aren’t filling the gap either. In March, 30% fewer properties hit the market when compared to pre-pandemic norms.

Current available inventory represents just 2.6 months of supply on a seasonally adjusted basis, “tipping the scale back toward sellers in a tightly constricted market,” Walden said. 

Despite overall lower mortgage rates compared to March, recent weeks saw a pullback in purchase rate lock volume, according to Black Knight’s report. As of April 26, rates averaged 6.38% for the month, down from the 6.56% average daily rate for the month of March.

Rates remained volatile through March and April – dropping from a high of 6.85% in early March to 6.21% by early April. By mid-April, rates had climbed back up above 6.5%.

Purchase rate lock volume also fell 18% on an unadjusted basis in recent weeks. Refi volume has declined by 17% among cash-outs and by 24% among refi-term refis since mid- to late-March.

In addition, the national delinquency rate dropped 53 basis points in March to 2.92%, falling below 3% for the first time on record dating back to January 2000. The national delinquency rate was also down 13% year over year as of March.

The overall decline in delinquencies outpaced the typical March seasonal improvement of 10.5%, which was attributed to borrowers using tax refunds and other seasonal revenue to catch up on late payments, the report noted. 

Prepayment activity rose for the second consecutive month after hitting a record low of just 33 bps of single-month mortality (SMM) in January.

Housing turnover continues to drive the largest share of prepayment activity, accounting for 57% of SMM in March. Nearly two-thirds of the increase in prepayment speeds over the past two months can be attributed to the rise in housing-turnover-related prepayments, which were driven by both seasonal and rate-related pressures.

Seasonal pressures are likely to continue, as housing-turnover-related prepayments typically rise by more than 30% from March through June, which would translate to a 9-bps rise in SMM, according to the report.

Source: housingwire.com

Apache is functioning normally

Apache is functioning normally

A positive retail sales report is signaling to investors that the U.S. economy is in solid shape. That’s causing more money to flow out of stocks and into bonds, pushing up Treasury yields and mortgage rates.

This upward momentum is something we expect to continue, which is why we’re recommending that borrowers take action on a purchase or refinance soon. Read on for more details.

[embedded content]

Market Outlook 5.14.18 from Total Mortgage on Vimeo.

Where are mortgage rates going?   

Treasury yields rise after strong retail sales report

The big market moving news that’s making the rounds this morning is the positive readings in the retail sales report.

While the April numbers did come in at levels right around where analysts had projected, it was the revisions to the March report that really got investors riled up.

The already strong 0.6% rise in March got bumped up to 0.8%, along with upward revisions to all of the other readings as well.

Retail sales are an important measure of the U.S. economy as it reflects how willing consumers are to part ways with their spending money.

With a strong report like the one out today, it shows that the U.S. economy is in fairly good shape.

That signals to investors that they can take on slightly more risk, meaning they move more into stocks and out of safer assets like government bonds.

If we look at the yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, we can see that it’s up over six basis points today to 3.06%.

Mortgage rates typically move in the same direction as the 10-year yield so they’re experiencing some upward pressure today.

Rate/Float Recommendation   

Locking now is likely the smart move      

As expected, mortgage rates have begun to move higher once again. This is a trend that we expect to continue for the coming weeks and months as the Federal Reserve continues to tighten the nation’s benchmark interest rate.

If you’re considering buying a new home or refinancing your current mortgage rate, it definitely makes sense to take action sooner rather than later, as it’s far more likely rates will be higher than lower in a few months.

Learn what you can do to get the best interest rate possible.  

Today’s economic data:           

Retail Sales

  • Retail sales rose 0.3% month over month
  • Retail sales less autos rose 0.3% month over month
  • Retail sales less autos and gas rose 0.3% month over month

Empire State Mfg Survey

The Empire State Index hit a 20.1 for May. That’s up about six basis points from the April reading.

Business Inventories

Business inventories remained flat in March.

Housing Market Index

The housing market index ticked up to a 70 for May. That’s a strong reading that points towards optimism among the nation’s home builders.

Notable events this week:  

Monday:  

Tuesday:   

  • Retail Sales
  • Empire State Mfg Survey
  • Business Inventories
  • Housing Market Index

Wednesday:        

  • Housing Starts
  • Fedspeak
  • Industrial Production
  • Atlanta Fed Business Inflation Expectations
  • EIA Petroleum Status Report

Thursday:     

  • Jobless Claims
  • Philadelphia Fed Business Outlook Survey
  • Bloomberg Consumer Comfort Index
  • Fedspeak

Friday:          

*Terms and conditions apply.

Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Source: totalmortgage.com

Apache is functioning normally

Apache is functioning normally

A recent Zillow survey of housing experts found that rising mortgage rates and their impact on affordability would “be the most significant force driving the 2017 housing market.”

The prospect of rising rates beat out a lack of inventory, shifting household demographics, policy moves, and slow income growth coupled with rising home prices.

At the same time, the experts seemed to agree that 30-year fixed mortgage rates would need to rise to 5.65% before they actually “significantly” impacted home value growth. To be fair, some said 5% or lower could have an impact as well.

Another Zillow survey from a week ago that polled home buyers about their biggest concerns found rising mortgage rates to be a top factor, more so than saving for a down payment. In 2015, down payment beat out rates.

The 30-year fixed currently sits at around 4%, and because of its recent rise, along with rapidly appreciating home prices, mortgage payments are now the highest they’ve been since 2010.

But are rising mortgage rates really our biggest concern?

Rising Rates Don’t Impact Payments All That Much

  • While mortgage rate movement captures headlines
  • The math is often less exciting
  • A big rate change may only result in a small difference in payment
  • That is equal or similar to your cable bill

I’ve mentioned this before because I think mortgage rates always get the headline, but down payments and other costs are often ignored, or simply not interesting enough to talk about.

Let’s look at a $200,000 loan amount at varying interest rates to illustrate.

$200,000 @4% = $954.83
$200,000 @5% = $1073.64
$200,000 @6% = $1199.10

As noted, the 30-year fixed is hovering around 4%, maybe a tick higher. A $200,000 mortgage, which is above the national average, would cost just $954.83 in terms of principal and interest.

If that rate increases a full percentage point to 5%, a level we haven’t seen since early 2010, the monthly payment increases just $118.81.

Yes, it’s ~$119 more expensive than it was at 4%, but it’s only $119. When we’re talking about a huge home purchase, $119 shouldn’t make or break you. It’s probably less than what most people pay for cable, or their wireless bill.

If you don’t have an amount well above that set aside for ancillary expenses, maintenance, upkeep, etc., you might be overextending yourself.

At 6%, the monthly payment is $244.27 more expensive than the payment at the 4% rate. But, and this is a big but, mortgage rates would have to increase a full 50% percent from current levels for that to happen.

Again, $250 is real money, but it’s not a giant sum of money when we’re talking about a major home purchase.

If we consider the national average home price of $195,300, we’re talking a $99 monthly payment increase when rates rise from 4% to 5%. That’s less than $100, even if rates reach levels not seen in seven years.

Yes, these monthly payment increases will be felt more at higher price points, with LA home buyers paying an extra $283 per month and SF buyers forking over $396 more each month. But in relative dollars (and income) it’s not as bad as it sounds.

If rates increased to 4.5%, only four of the nation’s largest 35 metros would see mortgage payments rise more than $100. If rates increased to 5%, just 19 of the largest 35 metros would see $100+ monthly payment increases.

Amazingly, many people have indicated that they would plain give up if mortgage rates increased just 1%.

My Guess Is People Can Absorb the Higher Monthly Payment, not the Higher Down Payment

  • The bigger concern
  • Is coming up with a larger down payment
  • Seeing that prospective home buyers can barely muster 3% down
  • Even if they have no problem with the actual monthly housing payment

There is perhaps a more worrisome issue. That darn down payment. Oh, and property taxes and homeowners insurance, which also get more expensive with a higher home price.

Let’s focus on the down payment though. If the homeowner in our above scenario put down 20%, the purchase price would be $250,000.

Imagine the cost if those same homes rise to $300,000. The down payment requirement jumps to $60,000, a $10,000 increase over the prior amount needed. Even a $275,000 purchase price requires another $5,000 upfront.

If you’ve ever read a report about how much Americans set aside in savings, you’d know that coming up with an additional $10,000 (or even $5k) would be a big ask, if not an impossible one.

There’s a good chance it would force the buyer to consider a lesser down payment, and thereby get hit with mortgage insurance and/or a higher interest rate to boot. Maybe they could get a piggyback second, but they’d definitely be burdened more than if interest rates simply rose to 5%. Or even 6%.

Yes, if rates and home prices rise in tandem, which is certainly possible, it’ll hurt even more. But it seems the focus is always on interest rates. If a buyer can’t absorb another $100 to $200 a month in housing payment, you have to wonder if they should be buying the home to begin with.

(photo: Ryan)

Source: thetruthaboutmortgage.com

Apache is functioning normally

Apache is functioning normally

Mortgage rates have moved up slightly this week. They are still hovering in the tight range that they’ve been in for the past couple of months, but we did see a modest nudge higher. If you’re considering a purchase or a refinance, we believe the smart move is to lock in a rate soon. Read on for more details.

[embedded content]

Market Outlook 7.9.18 from Total Mortgage on Vimeo.

Where are mortgage rates going?                                      

Mortgage rates nudge higher

It’s been a fairly uneventful week (unless you count the drama in the World Cup), keeping mortgage rates from moving too far in either direction. Long-term Treasury yields have moved up and down, but are ultimately resting at levels very close to where they were at the start of the week.

In the headlines, analysts are still talking about the global trade war that is taking place, with the U.S. and China being the main players here. It’s definitely an interesting situation at the moment because no one really knows exactly where we are headed.

What we can say, though, is that with the inflation readings this week coming in at strong levels and last week’s monthly jobs report showing a healthy labor market, the Federal Reserve is posed to continue raising the nation’s benchmark interest rate.

This might not put immediate upward pressure on mortgage rates, but as we move through the third and fourth quarter this year it is reasonable to expect mortgage rates to increase.

We did get the Freddie Mac Primary Mortgage Market Survey (PMMS) today, which showed that rates inched higher. Here are the numbers:

  • The average rate on a 30-year fixed rate mortgage moved up one basis point to 4.53% (0.4 points)
  • The average rate on a 15-year fixed rate mortgage moved up three basis points to 4.02% (0.4 points)
  • The average rate on a 5-year adjustable rate mortgage increased twelve basis points to 3.86% (0.3 points)

Here is what the Economic and Housing Research Group at Freddie Mac had to say about rates this week:

“Mortgage rates were mostly unchanged, but did tick up for the first time since early June.

The 10-year Treasury yield continues to hover along the same narrow range, as increased global trade tensions are causing investors to take a cautious approach. This in turn has kept borrowing costs at bay, which is certainly welcoming news for those looking to buy a home before the summer ends.

A record number of people quit their job last month, most likely for a new opportunity with higher wages and better benefits. This positive trend, along with these lower mortgage rates, should increasingly give some previously priced-out prospective homebuyers the financial wherewithal to resume their home search.”

Rate/Float Recommendation                                

Lock now before rates rise          

Given that mortgage rates are expected to rise over the coming weeks and months, we believe the smart move for most borrowers is going to be to lock in a rate sooner rather than later.

The longer you wait, the more likely it is that you will be locking in a higher rate. It only takes a few minutes or a quick phone call to get started.

Learn what you can do to get the best interest rate possible.  

Today’s economic data:         

Consumer Price Index

The Consumer Price Index for June rose 0.1% from the previous month, putting it at a year over year change of 2.9%. CPI less food and energy rose 0.2% month over month, putting it at 2.3%, year over year. The monthly reading for June is notable in that it’s a six-year high.

Jobless Claims

Applications filed for U.S. unemployment benefits came in at 214,000 for the week of 7/7/18. That puts the four-week moving average at 223,000. It’s a drop of 18,000 from the previous week.

Fedspeak

  • Philadelphia Fed President Patrick Harker at 12:15pm.
  • Minneapolis Fed President Neel Kashkari at 8:00pm.

Notable events this week:     

Monday:   

Tuesday:   

  • NFIB Small Business Optimism Index
  • JOLTS

Wednesday:         

  • PPI-FD
  • EIA Petroleum Status Report
  • Fedspeak
  • 10-Year Note Auction

Thursday:     

  • Consumer Price Index
  • Jobless Claims
  • Fedspeak

Friday:          

  • Consumer Sentiment
  • Fedspeak
  • Import and Export Prices

*Terms and conditions apply.

Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Source: totalmortgage.com

Apache is functioning normally

Apache is functioning normally

Government models say Phoenix’s groundwater supply is drying up. Homebuyers will have to pay the price to fix it.

The Arizona Department of Water Resources announced June 2 that the state will no longer authorize developers to build outside municipal water sources with a supply of only groundwater. Developers and real estate agents alike say this will hike up already high home prices.

“We’ll have significant supply issues post this announcement,” Spencer Kamps, vice president of legislative affairs for the Home Builders Association of Arizona, said. “And that will significantly impact affordability.”

Phoenix is one of Arizona’s five Active Management Areas, regions regulated by the 1980 Arizona Groundwater Management Code. In AMAs, developers of subdivisions must have a 100-year Assured Water Supply, which means their water source can meet the area’s anticipated water needs for 100 years.

There are two ways to get an AWS. Developers can either get a commitment of water service from a designated provider — a municipal water supplier approved by the ADWR — or they can get a certificate of AWS from the department itself.

Developers building on the outskirts of Phoenix where designated providers don’t reach must now use the second option. The wells they would previously tap in that area no longer hold a sufficient supply of water to meet the 100-year test based on ADWR modeling.

The ADWR’s Phoenix AMA groundwater availability model predicted 4.86 million acre-feet of unmet demand for groundwater supplies over the next 100 years. One acre-foot of water supplies three Phoenix homes with water for a year, ADWR says. The department hopes to alleviate this strain by prohibiting new groundwater-based AWS certificates.

But there are 80,000 undeveloped lots already approved with the certificates according to Kamps. They’re not impacted by the decision, so that development will continue as normal. Trouble begins, though, when builders run out of these lots. Until they find an alternative water source, they can only build within the reach of designated providers. 

“Essentially, we have a growth boundary,” Kamps said. “The land opportunity in those designated providers is finite — it will eventually end.”

Maricopa County, which includes Phoenix and its suburbs, has grown by 19% from 2010 to 2022 according to U.S. census data. The median residential home price has increased 240% over that time, from $135,000 in 2010 to $459,000 this year, according to the Arizona Regional Multiple Listing Service. Prices have been on a steep incline since the start of 2020, when the median price was $300,000. In just two years, it rose by 53%.

Sheryl Bowden, president-elect of the Phoenix Board of Realtors, said the local market was already struggling with high interest rates and low inventory. Maricopa County had a housing shortfall of 44,181 units in 2022, Common Sense Institute Arizona says.

“You have people that aren’t selling properties because they don’t know where they’re going to go,” she said.

The average 30-year fixed mortgage rate was 6.67% on June 22 according to the The Fannie Mae Primary Mortgage Market Survey. Bowden pointed to relatively high rates, up from 5.81% in the same week last year, as a reason for the shortage: homebuyers are “not going to sell their 3% mortgage on the existing house to go out and get a 7 or 7.5% mortgage,” she said. 

Mortgage rates hit a historic low of 2.65% in January 2021. Bowden thinks homeowners are waiting for rates to reach similar levels again before they sell.

“I don’t know if that’s ever going to be sustainable,” she said. “People need to get comfortable knowing that these rates that we’re having are, if you go back historically, they’re not that bad.”

Bowden and Kamps both said the announcement would disproportionately affect development in quickly growing Phoenix suburbs like Buckeye, which has doubled in population since 2010, and Queen Creek, which has almost tripled. 

“The designated providers are much more expensive to build in,” Kamps said. “Buckeye specifically is one of the most affordable markets in the Phoenix metro area. And if you take the opportunity to go build in those communities, that’s going to impact affordability.”

Both communities are searching for alternatives to groundwater so developers can keep building. 

Queen Creek’s water resource director, Paul Gardner, said his town has been acquiring renewable water sources to supplement current and future groundwater pumping for years now: “We decided as a community that we had grown so large that we could control our own destiny,” he said.

Gardner said treated wastewater, called recovered treated effluent, makes up 20% of the town’s water portfolio. In the future, it’ll make up 35%.

Developing renewable supplies will increase housing prices in Queen Creek. How much, Gardner said, depends on which supply the city marries each future developer with. Garder said it might mean $5,000 or even $10,000 more per house.

“The cost will be the cost,” he said.

The city of Buckeye also assured residents their water future is secure, listing several changes they’ve made to their water management process. They called the ADWR’s announcement a “reactionary response to an exaggerated issue,” criticizing the GMA as outdated.

Kamps also called for changes to the GMA, since it only impacts subdivisions, developments of six lots or more. Other developments, like commercial and apartment buildings, don’t have to obtain an AWS before building.

Arizona Governor Katie Hobbs created the Governor’s Water Policy Council on Jan. 9 to do just that. The council’s first meeting was May 17. Kamps is an appointed member of the council.

If the GMA is not updated, Kamps said, “in the future, we won’t make any decisions based on efficiency. We’ll make decisions based on where the water is.”

Source: nationalmortgagenews.com

Apache is functioning normally

Apache is functioning normally

Black Knight‘s newly launched mobile app will help to simplify and speed up home equity lending for borrowers, the company says.

The mortgage app, called “Validate,” enables homeowners to submit property photos as part of their application for a home equity line of credit (HELOC) or home equity loan, which helps to accelerate the loan approval process. 

After a homeowner submits photos of specific areas of the interior and exterior of their home, Validate uses geofencing and time stamps to confirm that photographs are up-to-date and accurately reflect current property conditions. 

Artificial intelligence (AI) will estimate the property’s current condition and quality, then compare it with similar homes using the Black Knight Complexity Profiler to create a condition-adjusted value estimate. Equity is calculated by deducting any outstanding mortgage liens, as identified in Black Knight’s public records data, the firm said. 

“Since actual photographs and AI extrapolations are used, the accuracy of the automated valuation model is more attuned to the property’s unique condition. Homeowners create their own verifiable property condition report – in a lender-accepted format – that is combined with other tools, such as Black Knight’s AVMs and Complexity Profiler, to greatly accelerate the HELOC decision-making process,” Ben Graboske, president, Black Knight Data & Analytics, said in a statement. 

After borrowers submit current property photos, Validate will ask homeowners to specify any repairs that need to be performed and to certify that the information submitted is accurate. Results are presented to the lender via a loan origination system-integrated API or a PDF report.

Black Knight’s launch of the Validate App comes amid home equity lending remains a bright spot in a sluggish housing market that faces high inflation and elevated interest rates.

With nearly 92% of homeowners having an interest rate below 6%, buyers who are looking to move can tap into their home equity that rose during the pandemic years.

About $251 billion of HELOCs originated in 2022, up from $182 billion in 2021, according to a report published by Home Equity Lending News. 

Source: housingwire.com

Apache is functioning normally

Apache is functioning normally

Any discussion about mortgage rates rising or falling in the month of June requires the caveat about the trend being exceptionally flat in the bigger picture.  Most borrowers wouldn’t see more than an eighth of a percent between any two days so far this month.  In fact, our 30 day volatility index is as low as it’s been since June 2022.

The volatility index measures the average change in our 30yr fixed rate index–positive or negative–from the previous day over 5, 10, or 30 day averages.  The chart above shows only 10 and 30 day averages, but the dynamic chart can be found here. 

With all of the above by way of disclaimer, mortgage rates rose modestly today.  By the afternoon, many lenders were roughly unchanged due to mid-day reprices for the better.

Source: mortgagenewsdaily.com