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Stormy Season
By Jeff Walton & Kelly Guest
October 7, 2024
As Milton churns in the gulf, we’re seeing big names in the housing industry step forward to help those devastated by Hurricane Helene: Fairway Independent Mortgage, Regions Bank via their foundation and the National Association of Home Builders to name a few, and undoubtedly more will contribute. Still, that didn’t stop the New York Times from inking a piece suggesting that North Carolina state lawmakers allowed lax building codes pushed for by the construction industry that could have contributed to the severity of the damage. The National Association of Home Builders (NAHB) did in fact just add a former lobbyist to their roster; but they also quickly mobilized their resources to support members and communities in rebuilding efforts as the speed of the federal response has been questioned.
In the run-up to November 5, CoreLogic says July home prices saw their 13th straight month of appreciation, Redfin found that homeowners are staying put in numbers we haven’t seen in 30 years, and the latest jobs info seems to have cut the interest rate honeymoon short.
CHATTER
NAR SETTLEMENT & SUIT UPDATES: HousingWire's Brooklee Han reports
The judge overseeing the Sitzer/Burnett and Gibson/Umpa suits granted preliminary approval to 13 brokerages and 15 MLSs that chose to settle the commission lawsuits via the opt-in mechanism negotiated by NAR in its settlement. Meanwhile, Han also details copycat commission lawsuits filed in Illinois.
MASS SETTLEMENT: Massachusetts AG gets Franklin Credit to cease collections on "Zombie 2nds"
The AG's office says, "The settlement resolves allegations that the company violated Massachusetts consumer protection laws by improperly attempting to collect on debts in its portfolio of primarily second lien mortgages after failing to communicate with borrowers or provide required statements for many years, as well as failing to comply with critical foreclosure-prevention measures."
BOB BLOGS: MBA President & CEO Bob Broeksmit published a compelling blog titled, "Let’s End the Harassment, Deception, and Distrust from Trigger Leads," calling on lawmakers to pass the legislation which was attached to the National Defense Authorization Act. The bill has been co-sponsored by 80 House members and 43 Senators.
AT YOUR SERVICE: Rocket Companies and Annaly Capital Management have entered into a subservicing agreement in which Rocket will handle all servicing and recapture activities for a portion of the mortgage servicing rights held by Annaly.
BALL OF CONFUSION: NMN reports on investor lawsuit against Rocket
A federal judge denied class certification due to "concerns about the reliability of its lead plaintiffs." The judge called the testimony of one plaintiff "contradictory, self-serving and borderline nonsensical," and rejected the second lead plaintiff for "having trouble understanding the lawsuit during testimony."
TECH TUMULT: HW documents ugly spat that drags in big names
Serhant President Josh Team was pulled into a lawsuit stemming from a tech platform commissioned by his former employer Keller Williams. The original suit was between Aika and East Media Consulting, but Team has been named and accused of taking millions in kickbacks - a claim that Aika initially denied in discovery.
LUX LENDER: High-end real estate brokerage The Agency launches Aclara Lending, "a mortgage lending service designed to offer seamless, comprehensive financing solutions to our luxury clientele. This partnership marks a pivotal moment in The Agency’s journey as we continue to elevate the home buying and selling experience for [their] clients."
HOLY HEI: NMN takes a look at home equity investment products and increasing legal scrutiny.
FAIRWAY THROWS DOWN, CHALLENGES IMBS: Fairway Independent Mortgage CEO Steve Jacobson posted about donating $1M for hurricane relief and implored the community to help raise more, saying, "collectively support a region that is in desperate need."
BUILDING BACK: NAHB is working closely with state and local home builder associations across the southeast to meet the needs of members and their communities who are affected by the catastrophic storm and to provide resources to help them rebuild.
REGIONAL REVIVAL: The Regions Bank Foundation announced a commitment of $150,000 in initial grant funding for organizations providing disaster relief in Helene's wake.
FINDING FAULT? NYT posits that politicians and builders share blame for Helene devastation
"Over the past 15 years, North Carolina lawmakers have rejected limits on construction on steep slopes, which might have reduced the number of homes lost to landslides; blocked a rule requiring homes to be elevated above the height of an expected flood; weakened protections for wetlands, increasing the risk of dangerous storm water runoff; and slowed the adoption of updated building codes, making it harder for the state to qualify for federal climate-resilience grants." The article goes on to cite "influence from the home building industry" for the decisions.
MOVING & SHAKING
MBA MAKES APPOINTMENTS: The Mortgage Bankers Association promoted Wendy Penn to Vice President for Affordable Housing Initiatives, and Amber Lawrence to Vice President of Diversity, Equity, and Inclusion (DEI).
NAR DEPARTURE: October 4th was Chief Legal and Member Experience Officer Katie Johnson's last day at the National Association of Realtors.
MOVING ON: PennyMac announced that William Chang is stepping down from his positions as Senior Managing Director and Chief Capital Markets Officer for PFSI and Senior Managing Director and Chief Investment Officer for PMT, in order to pursue other interests in the mortgage banking industry. Mark Elbaum - who joined the company last year to leverage the platform it built to drive additional value for the company through strategic initiatives - will take Chang's titles.
LOBBYING FOR BUILDERS: The National Association of Home Builders (NAHB) tapped DC insider Ken Wingert to be their new Chief Advocacy Officer.
INTERIM TO PERMANENT: Acrisure makes interim Chief People Officer Robin Benoit official.
INTROS & INNOVATIONS
BIG FEET: ATTOM Data has created an additional layer of geospatial data called ‘Building Footprints.’ These data show the exact footprint or measurement of a building and how it is located relative to other nearby structures. ATTOM’s Building footprints is a geospatial analysis valuable to retail, insurance, urban planning, telecommunications, home service industries, and many more industries.
MARKET/INDUSTRY
JOBS JUMBLE: Hopes of a Fed cutting frenzy dampen
In his reaction to Friday's BLS September employment conditions report, MBA SVP & Chief Economist Mike Fratantonisaid, “Interest rates jumped on the release of this report. MBA’s forecast is for longer-term rates, including mortgage rates, to remain within a relatively narrow range over the next year. This news will push mortgage rates to the top of that range, but we do expect that mortgage rates will stay close to 6% over the next 12 months.” Meanwhile, in his latest Master the Markets segment, Bill Bodnar says to watch for potential downward revisions to jobs numbers, the minutes from the last Fed meeting, the next inflation reading, and auctions.
MORTGAGE RATES TICK UP: Freddie 10-3-24
The decline in mortgage rates has stalled due to a mix of escalating geopolitical tensions and a rebound in short-term rates that indicate the market’s enthusiasm on rate cuts was premature. Zooming out to the bigger picture, mortgage rates have declined one and a half percentage points over the last 12 months, home price growth is slowing, inventory is increasing, and incomes continue to rise. As a result, the backdrop for homebuyers this fall is improving and should continue through the rest of the year.
MORTGAGE APPLICATIONS DECREASED 1.3% FROM ONE WEEK EARLIER: MBA Weekly Survey For Week Ending 9-27-24.
The Market Composite Index decreased 1.3% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1% compared with the previous week.
The Refinance Index decreased 3% from the previous week and was 186% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 1% from one week earlier.
The unadjusted Purchase Index increased 1% compared with the previous week and was 9% higher than the same week one year ago.
LOCKED, BUT NOT NECESSARILY LOADED: Mortgage Capital Trading says locks up 3.17% MoM
Purchase locks were down in August and September, but refis were up. " [ ]…for a more significant rise in refinance activity, mortgage rates will need to drop much further. Currently, many borrowers remain locked into historically low rates, making the potential for increased refinance volume contingent on further rate reductions outside of market expectations.” - Andrew Rhodes, Senior Director and Head of Trading at MCT
PERFECT STORM: NCRC Mortgage Market Analysis
The National Community Reinvestment Coalition released its market report that chronicles a widening gap between renters and owners. NCRC says homeowners are "trapped in gilded cages, unable to move due to rising rates, while renters face skyrocketing rents, making it impossible to save for homeownership."
NOT BUDGING: Redfin Reviews Homeowner Turnover
Only 2.5% of U.S. homes changed hands in the first eight months of 2024.
The rate of home sales and home listings are both down at least 30% from 2019.
This year’s turnover rate is the lowest in at least the past 30 years.
Existing home sales were similar in the early-mid 1990s, but the number of homes that existed was much smaller—meaning the turnover rate was higher.
There were 37.5% fewer homes sold this year than during the middle of the pandemic buying frenzy in 2021, and 31% fewer homes sold than during the last pre-pandemic year in 2019.
Reasons given for people staying put? Rising home prices, low inventory, and the rate lock effect sprinkled with some economic and political uncertainty. In other research, Redfin found that the income needed to afford their definition of a starter home has tripled since 2012.
AFFORDABILITY UPTICK: First American's August Real House Price Index (RHPI)
First Am's affordability measure rose 4% MoM and 9.3% YoY. Their inflation-adjusted numbers show that the average household income of $83,927 could afford a $384,366 home at a 6.5% interest rate.
LUCKY 13: July Marked 13th Straight Month of Home Price Appreciation
CoreLogic's July Home Price Index (HPI) and the CoreLogic S&P Case-Shiller Index showed gains slowed to a 5% year-over-year gain in July after peaking at 6.5% in both February and March of this year. The HPI forecasts home prices to increase 4.6% on average in 2024, following a 3.9% increase in 2023.
INVESTORS KNOW SQUAT: RCN Capital/CJ Patrick Company Fall Investor Sentiment Index
77% of investors said squatters are a problem in their areas, 46.3% said they've experienced the problem in their areas. Even though 80% of survey respondents said that the cost and availability of insurance were a concern in their decisions to invest in real estate, over 68% said that conditions for residential real estate investment are better or much better than a year ago, and 71% expect conditions to improve in the next 6 months.
INVEST FOR SUCCESS: Realtor.com designates hot markets for investors
The real estate website used factors such as lower average home prices, vacancy rates below national averages, investor purchase percentages of total sales, rising rents, and sustained demand to determine their picks for top investment markets. Their picks are:
Dayton, Ohio
Rochester, N.Y.
Cleveland-Elyria, Ohio
Pittsburgh, Pa
Knoxville, Tenn.
Albany-Schenectady-Troy, N.Y.
New Haven-Milford, Conn.
Buffalo-Cheektowaga, N.Y.
Grand Rapids-Kentwood, Mich
Columbus, Ohio