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C(FBP)-YA
By Jeff Walton & Kelly Guest
His 5-year term wasn't up, but Consumer Financial Protection Bureau director Rohit Chopra got his pink slip in the form of an email from the Trump White House last week. Even though the U.S. Supreme Court upheld the constitutionality of the bureau's funding mechanism last May, the Dodd-Frank love child is still in peril: Senator Ted Cruz (R-TX) introduced the Defund the CFPB Act, which would zero out transfer payments from the Federal Reserve to the CFPB, saying in a statement, “The CFPB is an unelected, unaccountable bureaucratic agency that has imposed burdensome and harmful regulations on American businesses, banks, and credit unions. [ ] and the Federal Reserve should not be transferring funds to it. Enacting this legislation would save American taxpayers billions of dollars [ ].”
The National Association of Home Builders joined the political fray last week, sending a letter to President Trump imploring him to exempt building materials from proposed tariffs against Canada and Mexico because of "their harmful effect on housing affordability," reminding the Commander-in-Chief that he issued an executive order on his first day in office that seeks to increase housing supply and affordability. It will be interesting to see if their missive has the desired effect.
Policy wonks and political junkies who want to keep up with orders and actions that affect housing and the industry should check out HousingWire's roundup.
CHATTER
NMN reports on a movement to require that originators for Home Equity Investment (HEI) providers be state-licensed.
CONSUMERS NOT CONFIDENT: Conference Board December Numbers
The Conference Board Consumer Confidence Index® declined by 8.1 points in December to 104.7 (1985=100).
The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—tumbled 12.6 points to 81.1, just above the threshold of 80 that usually signals a recession ahead.
“The recent rebound in consumer confidence was not sustained in December as the Index dropped back to the middle of the range that has prevailed over the past two years.” - Dana M. Peterson, Chief Economist at The Conference Board.
Aging…Better Than The Alternative: The market seems to be responding to the growing numbers of homeowners who have dug in due to the rate-lock effect, and realizing they aren't getting any younger: Aging-in-place platform The Helper Bees secured $35M in Series C funding, and Hawaii legislators introduced a new bill calling for the establishment of a state-specific Home Equity Conversion Mortgage (HECM) program to be managed by the Hawaii Housing Finance and Development Corporation.
MOVING & SHAKING
Former AIME chairwoman and CEO Katie Sweeney is joining Rocket Pro as Executive Vice President of Strategy and Broker Advocacy, according to Scotsman Guide.
Movement Mortgage elevated Aimee Dodson to Chief Engagement Officer.
HW reports that Freedom Mortgage/Newrez/Rate alum Biljoy John has joined Sage Home Loans as SVP of Marketing.
Panorama Mortgage appointed Philip Riccio as its new Chief Financial Officer.
MARKET/INDUSTRY
The Fed stayed put, but Bill Bodnar talks about upcoming laborious indicators and a bump for MBS' in his latest Master the Markets segment.
Meanwhile, MBA’s MBA SVP & Chief Economist Mike Fratantoni was a little wordier, saying: “Meeting the market’s expectation, no aspect of monetary policy changed during the first FOMC meeting of 2025. The FOMC sees solid growth, a strong job market, and inflation still above the Fed’s target, indicating that its current target for the federal funds rate is about right, holding back the economy a bit to move inflation down over time. Quantitative tightening continues without changes, with their holdings of Treasuries and MBS continuing to slowly roll off passively.With no news in the statement, every word from upcoming speeches will be closely parsed to determine whether this is just a pause before another cut or two or whether this level of the federal funds rate will be the low point for this cycle. MBA is forecasting one additional cut this year. With the Fed on hold, we do expect that longer-term rates, including mortgage rates, will also stay within a narrow range for the foreseeable future.”
Mortgage Rates Show Little Movement: Freddie 1-30-24
The 30-year FRM has hovered between 6% and 7% for most of the last 2 ½ years. That trend continued this week, with the average rate remaining essentially flat at 6.95%. Driven by these higher rates and a persistent supply shortage, affordability hurdles still exist for many homebuyers and a significant number of them remain on the sidelines.
Mortgage applications decreased 2% from one week earlier:MBAWeekly Survey for the week ending 1-24-25.Homebuyer affordability improved slightly in December, with the national median payment applied for by purchase applicants decreasing to $2,127 from $2,133 in November. This is according to the Mortgage Bankers Association's (MBA) Purchase Applications Payment IndexPAPI.
DECEMBER PENDING HOME SALES DOWN: NAR
Pending home sales in December decreased 5.5%.
Compared to one month ago, pending sales declined in all four U.S. regions, with the West recording the largest drop.
Year-over-year, contract signings retreated in all four U.S. regions, with the Midwest showing the biggest reduction.
“After four straight months of gains in contract signings, one step back is not welcome news, but it is not entirely surprising. Economic data never moves in a straight line. High mortgage rates have not significantly dented housing demand due to greater numbers of cash transactions.” - NAR Chief Economist Lawrence Yun
EQUITY RICH – STILL: ATTOM Data’s Q424 U.S. Home Equity & Underwater Report
47.7% of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than half of their estimated market values.
That level was down slightly from 48.3% in Q324 2024 and from a recent peak of 49.2% in the prior three-month period. However, it was still up from 46.1% in Q423.
The portion of mortgaged homes that were equity-rich during the fourth quarter of 2024, 47.7%, remained far above the 26.5% level recorded in early 2020. While the latest figure was down in 33 of the 50 U.S. states from the third quarter to the fourth quarter of 2024, mostly by less than two percentage points, it was still up annually in 41 states.
DASTARDLY DEBT: VantageScore’s CreditGauge December 2024
Credit Card Balances Grew 2.9% Year-Over-Year, in Line with Annualized Inflation
Overall Delinquencies Inched Higher as Consumers Continued to Face Economic Headwinds
Overall Credit Utilization Declined Year-Over-Year