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Peeved President
By Jeff Walton & Kelly Guest
December 2, 2024
National Association of Realtors President Kevin Sears is pissed. Last Tuesday, the judge in the landmark commission lawsuit granted final approval to the settlement that put major representation and compensation practice changes in place - in spite of a last minute objection filed by U.S. Department of Justice. In a letter to members, Sears sounded off, saying, "How does the DOJ respond to our good faith engagement? By filing a last-minute objection less than 48 hours before our settlement approval hearing, raising a misguided concern about written buyer agreements, and attempting to disrupt our settlement at the eleventh hour. In the filing, the DOJ does not seem to be concerned about the use of written buyer agreements, as many states require these agreements as a matter of law. Rather, the DOJ takes issue with the practice change that requires the use of written buyer agreements as a part of the settlement. But the filing was vague and unclear so their exact intentions are unknown. [ ] This tactic by the DOJ was deeply disrespectful of our members, the court, and the entire approval process. DOJ has had months since we first announced our settlement to make their opinions known, and this late filing shows that DOJ has nothing meaningful to say about it."
Real estate mogul to the rescue? Will a new Trump term - and perhaps a new DOJ - make a difference? The DOJ's NAR probe began during Trump's first term. There's all sorts of blustering about what a changing of the guard at DOJ will bring, but we'll have to get beyond the posturing and press conferences to see if NAR remains in the crosshairs.
CHATTER
CURTAINS FOR CFPB? DOGE Bros Say “Delete.”
“Delete CFPB. There are too many duplicative regulatory agencies.” Elon Musk on X
Prior to the expiration of Donald Trump’s first term, the Supreme Court imbued the president with the power to hire and fire the CFPB director, a role that was previously insulated from this authority prior to the 2020 decision. We’ll see what’s next for the watchdog once the “Department of Government Efficiency” digs in.
FIRST INNING: NextHome CEO Talks to HW About NAR Settlement
“We’re in the first inning. I think that’s the most important thing for people to understand. Since Aug. 17, we’ve only had a few months to see how things have played out. There’s been multiple studies showing that compensation is starting to decrease — especially on the buyer’s agent side. We don’t know if agents are signing buyer representation agreements before they show property.” - James Dwiggins, NextHome CEO
NOT JUST A FOOTBALL PLAYER: MBA on Scott Turner Nomination for HUD Secretary
“On behalf of MBA, I congratulate Scott Turner on being nominated to serve as the next HUD Secretary. Pursuing policies and initiatives that help solve our nation’s housing affordability crisis for owners and renters should be a top policy priority under the Trump administration. Scott’s leadership as Executive Director of the White House Opportunity and Revitalization Council in the first Trump administration, where, alongside Secretary Ben Carson, he was instrumental in implementing Opportunity Zones, will serve him well.” MBA's President and CEO Bob Broeksmit
HIGHER CEILINGS: 2025 CLL up 5.2%
The Federal Housing Finance Agency announced the conforming loan limit values (CLLs) for mortgages acquired by Fannie Mae and Freddie Mac in 2025. In most of the United States, the 2025 CLL value for one-unit properties will be $806,500, an increase of $39,950 from 2024.
MARKET/INDUSTRY
THE 30-YEAR FIXED-RATE MORTGAGE INCHES DOWN: Freddie 11-27-24
The 30-year fixed-rate mortgage moved down this week, but not by much. Rates have been relatively flat over the last few weeks as the market waits for more clarity on specific economic policies. Potential homebuyers are also waiting on the sidelines, causing demand to be lackluster. Despite the low sales activity, inventory has only modestly improved and remains dramatically undersupplied.
MORTGAGE APPLICATIONS INCREASED 6.3% FROM ONE WEEK EARLIER: MBA Weekly Survey for the week ending 11-22-24.
THAT WAS THEN, THIS IS NOW: Treasury notes down, MBSs up - but here comes the jobs report. In his latest Master the Markets segment, Bill Bodnar talks about "the last big reading before the Fed's next meeting."
SAD SALES: New Homes Lagging
Down MoM: 17.3% decrease from September’s revised rate of new home sales (738,000)
Down YoY: 9.4% below the Oct. 2023 estimate of 673,000
The median sales price of new homes sold in Oct was $437,300; the average sales price was $545,800
PERKY PENDINGS: NAR October PHS
Pending home sales in October increased 2.0%.
Compared to one month ago, pending sales grew in all four major U.S. regions, led by the Northeast.
Year-over-year, contract signings rose in all four U.S. regions, with the West showing the highest increase.
"Homebuying momentum is building after nearly two years of suppressed home sales. Even with mortgage rates modestly rising despite the Federal Reserve's decision to cut the short-term interbank lending rate in September, continuous job additions and more housing inventory are bringing more consumers to the market." - NAR Chief Economist Lawrence Yun.
MOVIN’ ON: NAR 2024 Migration Trends Report
In 2024, 46% of Realtors®' clients moved to the South, 25% moved to the West, 18% moved to the Midwest and 11% moved to the Northeast.
Those relocating were driven primarily by the desire to be closer to family and friends (30%) and to get more home for the money (21%).
Movers to the South and West were most likely moving from a different state, while movers to the Northeast were most likely moving to a different area within the same state.
Among repeat buyers, 74% sold their previous residence when making their recent purchase, while 20% kept their previous residence as an investment, rental or vacation property. Repeat buyers who moved to the West and Northeast were more likely than others to keep their previous residence.
HIGH INCOME DEADBEATS: VantageScore Credit Gauge Says Number of Rich Delinquents Increased in October
High-income ($150k+) credit delinquencies in the 60-89 Days Past Due category more than doubled from January 2023 to October 2024. This increase significantly outpaced the growth among middle-income earners (+63%) and low-income earners (+25%), underscoring that even high-income groups are feeling the effects of financial strain, compounded by the ongoing slump in white-collar employment.
Overall balances hit a new CreditGauge record for a fourth consecutive month, driven by Mortgage loans. Overall credit balances rose by $384 (+0.4%) month-over-month and $2,218 (+2.1%) year-over-year to $105,600.
Credit Card balances remained flat at $6,335 in October 2024 compared to September 2024, reflecting cautious spending by consumers ahead of the election and the holidays.
The average Mortgage balance rose by $6813 (+2.6%) year-over-year from October 2023 to October 2024 driven by higher interest rates and higher loan amounts due to elevated home prices.
The overall amount of available credit that borrowers used remained steady at 51.7%.