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Power Hour
By Jeff Walton & Kelly Guest
November 25, 2024
The Top three lenders according to J.D. Power's 2024 Mortgage Origination Satisfaction Study are
Prosperity Home Mortgage, Movement Mortgage and Bank of America in that order. Lenders and marketing teams who use the insights from the study (or at least the press release) as a schematic for planning, content, and execution can capitalize on exponentially higher satisfaction scores. Consumers want lenders involved early in the buying process and appreciate being able to rely on their expertise. “Consistently, we’re seeing that lenders that play an active advisory role in helping their clients navigate the current market are earning significantly higher customer satisfaction, loyalty and advocacy scores than those that are treating mortgage lending as a transactional process.” J.D. Power Wealth & Lending Intelligence Sr. Director Bruce Gehrke
Fannie Mae's Economic and Strategic Research (ESR) Group added a dim plot twist to its previous 2025 forecast: “Whereas previously the ESR Group had expected mortgage rates to dip below 6% in early 2025, the revised forecast now shows mortgage rates ending 2025 at 6.3% and remaining above 6% through 2026.” In addition to the upward mortgage rate revision, the ESR Group downwardly revised their existing home sales estimate, saying, "Existing home sales are now expected to rise only 4 percent next year from a 2024 pace that is on track for a nearly 30-year low.” This is a stark contrast to National Association of Realtors' Chief Economist Lawrence Yun who posits that "maybe the worst is over," and recently predicted that existing home sales will rise by 9% next year. Meanwhile, First American's Mark Fleming took the Goldilocks approach in their October Home Price Index, saying, "Heading toward the new year, house price growth seems poised to maintain a steady, balanced pace—neither too hot, nor too cold.”
CHATTER
Fintech Foray: Payment processors like Apple Pay, Google, and PayPal get to join banks, mortgage companies and others under CFPB supervision, courtesy of a recently-finalized rule on "federal oversight of popular digital payment apps." Big Tech and other widely used apps covered by the rule collectively process over 13 billion consumer payment transactions annually.
A proposed revision to FHA underwriting guidelines would allow people to use income from renters living in their homes – 12-month history required.
The idea is posted on FHA’s website and is open to opinions from “interested stakeholders.”
Slow-walked Warning? AnnieMac is accused of potential state and federal law violations with regard to a data breach. "On or about November 14, 2024, AnnieMac notified its customers that a threat actor gained access to its systems and viewed and copied certain customer records. Although the data breach occurred between August 21-23, 2024, AnnieMac did not notify its customers until approximately three months later [ ]."
More Creditors Swiping Left: New York Fed's 10-24 Consumer Expectation Survey
Reported average rejection rates for credit cards, mortgages, auto loans, credit card limit extension requests, and mortgage loan refinance applications all rose in 2024 and are all well above 2019 levels.
The average rejection rate for mortgage refinance applications increased to a new series high of 25.6% in 2024 from 15.5% in 2023.
But consumers plan to move forward: The average likelihood of applying for a mortgage decreased further to 6.4% in 2024 from 6.7% in 2023. The average likelihood of applying for a mortgage refinance over the next 12 months rebounded from a series low of 3.5% in October 2023 to 6.1% in October 2024. For the year overall, the average likelihood of applying for a mortgage refinance increased to 5.9% in 2024 from 4.7% in 2023.
How Many Thousands Out to Get $5K Back In? HW Follows Move/CoStar Legal Scrum
Hard to tell how many motions, amendments, and other legal moves have been made in the battle between the Realtor.com and Homes.com parent companies.
Charlotte-based Truist committed $725M in dedicated lending, tax-exempt municipal lending, non-profit grants, and other loans and/or investments in Community Development Financial Institutions to help recovery efforts after Hurricane Helene.
MOVING & SHAKING
SEC Chair Gary Gensler will step down January 20,2025.
US Mortgage Corporation welcomed Paul Laprade as their new SVP, Division Lending Manager.
Assurance Financial is spreading out in the South with new branches in TX, FL, and AL.
NMP reports that Redefining Business Intelligence (RBI) named founder as its first CEO.
MARKET/INDUSTRY
Mortgage Rates Tick Up: Freddie 11-21-24
Mortgage rates ticked back up this week, continuing to approach 7%. Heading into the holidays, purchase demand remains in the doldrums. While for-sale inventory is increasing modestly, the elevated interest rate environment has caused new construction to soften. In his latest Master the Markets segment, Bill Bodnar points to the upcoming Treasury auction, GDP numbers on the horizon and the expectation that the Fed's fave gauge of inflation will rise.
Mortgage applications increased 1.7 percent from one week earlier: MBA Weekly Survey for the week ending 11-15-24.
October New Home Purchase Apps Up 8.2% on YoY basis, up 3% MoM.
Mortgage Credit Availability (MCAI) rose by 0.7 percent to 99.2 in October.
Nowhere But Up? Economist Optimistic in Latest NAR EHS
"The worst of the downturn in home sales could be over, with increasing inventory leading to more transactions. Additional job gains and continued economic growth appear assured, resulting in growing housing demand. However, for most first-time homebuyers, mortgage financing is critically important. While mortgage rates remain elevated, they are expected to stabilize.” - NAR Chief Economist Lawrence Yun.
Existing-home sales climbed 3.4% in October to a seasonally adjusted annual rate of 3.96M. Sales advanced 2.9% from one year ago, the first year-over-year increase in more than three years (July 2021; +1.8%).
The median existing-home sales price ascended 4.0% from October 2023 to $407,200, the 16th consecutive month of year-over-year price gains.
The inventory of unsold existing homes edged higher by 0.7% from the prior month to 1.37M at the end of October, or the equivalent of 4.2 months' supply at the current monthly sales pace.
Highlights from First American October HPI
“National annual house price appreciation stabilized in October, ending a nine-month streak of annual deceleration. While mortgage rates slid downward through September, they unexpectedly rebounded in October, wiping out the short-lived affordability boost from lower mortgage rates. As a result, potential home buyers may hit pause, dampening home buying activity through the rest of 2024." - Mark Fleming, First American Chief Economist
House prices nationally are now 54.2% higher compared to pre-pandemic levels (February 2020).
Home prices were down 0.05% MoM from September and October, and up 3.8% YoY between October '23 and '24.
Now They Know: Builder Confidence Up After Election Decided
Builder sentiment improved for the 3rd straight month and builders expect market conditions will continue to improve with Republicans winning control of the White House and Congress.
Builder confidence in the market for newly built single-family homes was 46 in November, up 3 points from October, according to the NAHB/Wells Fargo Housing Market Index (HMI).
“With the elections now in the rearview mirror, builders are expressing increasing confidence that Republicans gaining all the levers of power in Washington will result in significant regulatory relief for the industry that will lead to the construction of more homes and apartments. This is reflected in a huge jump in builder sales expectations over the next six months.” - NAHB Chairman Carl Harris.
“While builder confidence is improving, the industry still faces many headwinds such as an ongoing shortage of labor and buildable lots along with elevated building material prices.” - NAHB Chief Economist Robert Dietz.
Construction Numbers: HUD/Census Bureau 10-24 Monthly New Residential Release
Permits were down .6% from revised September rate, and down 7.7% YoY
Housing starts were down 3.1% from revised September estimate, and down 4% YoY
Completions were down 4.4% from revised September estimate, but up 16.8% YoY
Share Of Loans In Forebearance Ticks Up: MBA
The total number of loans now in forbearance increased to 0.47% as of October 31, 2024. According to MBA’s estimate, 235,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 8.4M borrowers since March 2020.
Insurance Premiums Showing Signs of Stabilizing: Matic.com
The online insurance platform’s year end trends and predictions report findings highlight that while climate risks and regulatory pressures continue to pose challenges, the market is showing early signs of stabilization. Premium growth slowed significantly in the latter half of 2024, with new policies seeing average rate increases of 6.6%, compared to 10.7% in the first half of the year.
Bah Housebug: Most People Earning Under $50,000 Struggle to Afford Housing Redfin/Ipsos
Most U.S. residents who earn less than $50,000 struggle to afford their mortgage or rent payments, according to a recent Redfin-commissioned survey.
Of those earning under $50,000 who struggle to afford housing, 21% have delayed or skipped medical treatments, while 15% have worked a side hustle.
Broken down by generation, nearly one-quarter of Gen Zers who struggle to afford housing have sold belongings to help make payments, and 19% have moved in with a romantic partner.