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Countdown to Cuts?
July 15, 2024
Jeff Walton & Kelly Guest
4, 3, 2 = 1 RATE CUT? Inflation dropped for the first time in 4 years, and hit 3% for the first time in 3 years…so will the Fed make a rate cut in 2 months? After CPI numbers showed a .01% drop, Forex said, “…the market is now pricing in an 87% probability that the Fed will cut rates. This is up from around 45% just a month ago and 68% a week ago.” Meanwhile, HUD is in the news this week, from a $1.22M settlement with the Appraisal Foundation and a lost summary judgment to updating the FHA 203K program.
NOT HO-HMDA: 2023 HMDA Data Released
IMBs snagged 68.8% of first-lien, one- to four-family, site-built, owner-occupied home-purchase loans in 2023, up from 60.2 percent in 2022.
CHATTER
CITIGROUP saw a 30% y-o-y gain in biz banking in Q2, JP MORGAN CHASE posted Q2 investment banking revenue growth of 46%, and WELLS FARGO saw a 1% y-o-y decline in net income and decline in average loans during the same timeframe.
NMN’S NORAH MULINDA: “STOCK MARKET’S WORST GROUP HAD BEST DAY”
Mulinda weighed in after the CPI numbers were released reporting, “shares of real estate companies jumped as much as 3.1% [July 11] for their biggest intraday gain of 2024, climbing to their highest level since March as investors snap up homebuilder, digital and commercial real estate stocks alike.”
ROUND 3 OF NEWREZ LAYOFFS KNOCKED OUT 265 ROLES
After two acquisitions, the company filed for layoffs in CO and AZ to eliminate redundancies.
A DECADE OF DATA RELEASED:
HW and NMN both report this week on move toward new credit scoring model VantageScore 4.0 and the big data dump from the FHFA to help the industry analyze historic credit info on loans made between 2013 and 2023 using the FICO model.
CFPB SCORES A WIN IN CHICAGO:
7th Circuit Cour of Appeals ruled that the Equal Credit Opportunity Act applies not just to credit applicants but also to prospective applicants in the bureau’s case against Townstone Financial.
DON’T GET TRIGGERED! CHLA IMPLORES CFPB TO CRACK DOWN ON “ABUSIVE SOLICITATIONS”
The letter from the Community Home Lenders of America asks to “continue their long-time request for the CFPB to focus on abuses with respect to trigger lead solicitations for mortgage loans – which CHLA considers junk calls.”
BIG CONCLUSIONS FROM A SMALL SAMPLE? FHFA LAUNCHES NMDB STATISTICS DASHBOARD
“The release of updated data will allow stakeholders to better understand emerging mortgage and housing market trends. [ ] the new dashboard will ensure that information about the volume and characteristics of mortgages held by U.S. households is more easily accessible and available to the public.” - Director Sandra L. Thompson. The aggregated data – including rate and balance info – is based on a ‘nationally representative’ 5% sample of residential mortgages in the US.
UWM ROLLS OUT “REASON TO REFI”
The wholesaler announced Govy125, a 125 basis points incentive on any note rate for VA IRRRLS and non-credit qualifying FHA Streamlines, in a move to “to help UWM partners create more refinances with their past VA and FHA borrowers, as well as attract new clients.”
MBA JUMPS ON FED CHAIR POWELL’S COMMENTS ON BASEL III:
“We agree wholeheartedly with Fed Chair Powell’s comments that it is ‘essential’ to re-propose the flawed Basel III Endgame proposal. MBA says, “…certain provisions of the proposal would harm the U.S. economy, diminish mortgage credit availability – especially for low- and moderate-income homebuyers – and have detrimental impacts to the broader single-family housing and commercial real estate finance markets.”
RE/MAX EXPANDS & REBRANDS IN UT: IN SALT LAKE CITY
60-agent team “Stratus Real Estate Solutions” becomes RE/MAX Stratus.
MARKET/INDUSTRY
FANNIE’S HPSI SHOWS A 26% M-O-M JUMP IN # OF PEOPLE WHO “THINK IT’S A GOOD TIME TO BUY!”
(Well, that was coming off a survey low…) The June Home Purchase Sentiment Index also showed an increase in consumers’ confidence in their job security from the previous month, and the whole index was up 6.6 points y-o-y.
MORTGAGE RATES TICK DOWN AS MARKETS DIGEST INCOMING DATA: FREDDIE 7-11-24
“Following June’s jobs report, which showed a cooling labor market, the 10-year Treasury yield decreased this week and mortgage rates followed suit. There is also more inventory on the market, including a fair number of listings with price cuts, which is an encouraging sign for prospective buyers.”
MORTGAGE APPLICATIONS DECREASED 0.2% FROM ONE WEEK EARLIER:
MBA's Survey for the week ending 7-5-24. (Results include an adjustment for the July 4th holiday.)
The Market Composite Index decreased 0.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 20% compared with the previous week.
The Refinance Index decreased 2% from the previous week and was 28% higher than the same week one year ago.
The seasonally adjusted Purchase Index increased 1% from one week earlier. The unadjusted Purchase Index decreased 19% compared with the previous week and was 13% lower than the same week one year ago.
FORECLOSURES DOWN – AND UP: ATTOM Data
ATTOM’s Midyear 2024 U.S. Foreclosure Market Report shows a total of 177,431 U.S. properties with default notices, scheduled auctions or bank repossessions — in the first half of 2024. That’s down 4.4% from the same time period a year ago but up 7.8% from the same time period two years ago.
UPDATE VS. MOVE UP? HUD REVAMPS FHA 203K
“Today, we are modernizing and expanding this program, helping both homebuyers and homeowners fix up their homes. This is one more action [ ] to improve our country’s housing supply.” - HUD Acting Secretary Adrianne Todman
Allowable rehab costs increased from $35K to $75K
Allowable rehab time extended to 12 months for standard 203K, 9 months for limited
Consultant fees increased, borrowers may now finance these fees
INFLUENCE = EXPERTISE? NOT SO MUCH.
Where is Gen Z going for home buying advice? TikTok, according Clever Real Estate’s Gen Z Home Buyer Report: 2024 Edition. Clever reports that 38% of “Zoomers” (yes, that’s Gen Z) say they received information about home buying from TikTok. BUT, 15% of Gen Z homeowners say the advice they got from TikTok and other social media was bad. Zoomers need real industry pros.
ANOTHER THING ABOUT THOSE YOUNGUNS…
We mentioned ServiceLink’s 2024 State of Homebuying Report last week, but didn’t point out their finding that 22% of Gen Z home buyers “pooled money with friends” for a down payment on a home – more than any other demo. Lenders and their real estate partners have an opportunity to educate and motivate this market segment that shows a significant willingness to be creative in the face of challenging affordability and market conditions.