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Archive for the ‘MND NewsWire’ Category

Purchase Share, FICOs, ARMs All Increasing -EllieMae

The share of closed loans originated for home purchase continues to inch higher.  Ellie Mae, in its September Origination Insight Report, says that share jumped from 68 percent in August to 71 percent.   The upward trend in purchasing was most pronounced for FHA loans where the share rose 5 percentage points to 83 percent. For Conventional loans the share moved to 69 percent from 66 percent while there was only a 1-point increase in the VA share, to 73 percent.

The distribution of loans did shift slightly for the first time in months. The VA and FHA shares of closed loans remained at 10 and 20 percent respectively but the Conventional shared dipped by 1 point to 65 percent.   The share of adjustable rate mortgages (ARMS) increased to 7.2 percent from 6.6 percent in August.  

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Existing Home Sales Extend Slump, But Inventory Holds Annual Gain

Existing home sales slipped in September, following a month in which sales were almost totally flat.  The National Association of Realtors® (NAR) said that closed transactions for existing single family homes, townhouses, condos, and cooperative apartments was at a seasonally adjusted rate of 5.15 million in September.  This was a 3.4 percent decline from both the July and August rate, both of which came in at 5.34 million units. The last month in which existing home sales posted a month-over-month gain was in March. Sales are now down 4.1 percent year-over-year from the September 2017 rate of 5.37 million.

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Annual Rent Growth Finally Turns Negative

Evidence is growing that the housing market is cooling, and Zillow is adding to the pile of proof. However, its contribution points more to a slowdown in the rental market than breaking any news about housing prices.  

The company says that annual rent growth has now slowed nationally for eight straight months and turned negative on an annual basis last month for the first time since July 2012. The annual rate of growth in September was -0.2 percent, not only a negative but far from the peak rate of appreciation, 6.6 percent, in July 2015.  Still, monthly rent is hardly pocket change.  The national median after that 0.2 percent or $36.00 decline, was $1,440. 

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Rise of The Real Estate Teams

Anyone who has ever worked as a real estate agent will understand the real reasons behind a new finding from the National Association of Realtors® (NAR). The organization recently conducted a survey among its Realtor members to find out how many considered themselves as members of a team.

The survey, conducted in July, involved a sample of 50,436 active Realtors.  A total of 3,483 useable responses were received for an overall response rate of 6.9 percent. The responses indicated that the team concept is becoming more common in the real estate world, although it certainly is not dominating it.  Twenty-six percent of respondents said they were members of a team.

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Housing Construction Down But Not Out

All three reports on residential construction activity in September were disappointing, but no more so than any of the other housing data that speaks to the ongoing process of leveling-off.  While there had been some erosion expected from the August numbers, the actual data did not meet analysts' expectations.  Upward revisions to August permitting took some of the sting out of that report, but the opposite happened with housing starts.  Results were particularly poor in the South, likely resulting from the impact of Hurricane Florence.

Permits for residential construction were issued at a seasonally adjusted annual rate of 1,241,000 units.  This is 0.6 percent lower than the August estimate of 1,249,000 and 1.0 percent below the annual rate of 1,254,000 the previous September.  The August number was an upward revision from the 1,229,000 units previously reported, wiping out some of that month's original 5.7 percent loss.

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Mortgage Apps Take a Nosedive, Rates on the Rise

Mortgage applications were down last week by the largest seasonally adjusted percentage since September 2017. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, dropped by 7.1 percent during the week ended October 12, and was down 7.0 percent unadjusted. There was a minor holiday, Columbus Day, that shortened the week for some financial institutions, but MBA said its numbers were adjusted to account for the holiday. Refinancing also suffered a major loss, declining 9 percent compared to the week ended October 5.  

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Falling Lumber Costs Push Builder Confidence Higher

Builder confidence ticked up 1 point in October, rising to 68. The National Association of Home Builders (NAHB), which produces the NAHB/Wells Fargo Housing Market Index (HMI) says this measure of confidence levels has held in the high 60s since June.

"Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment," said NAHB Chairman Randy Noel. "Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable."

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New MBA President Puts Regulatory Reform at Top of Wish List

MBA President and CEO Bob Broeksmit, the Mortgage Bankers Association's (MBA's) newly installed president and CEO, delivered his inaugural speech to MBA's annual convention on Monday, and he appears, at least from his prepared remarks, to be coming out swinging.  His address opened with the sentence, "Mortgage market regulations are increasing costs and limiting YOUR ability to serve YOUR customers."

After presenting his background in the mortgage industry, Broeksmit went on to detail what he and MBA plan to do about those regulations, noting that new leadership in seven regulatory offices* that oversee the mortgage industry presents new opportunities to educate and inform policymakers. He also said MBA will be working with the new Congress to be elected next month regardless of who wins. The goal is to recommend reasonable changes to the regulations and laws which he said have increased costs or prevented MBA members from serving their customers.

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“Debt-to-Income” Now Biggest Player in Mortgage Denials

Mortgage denial rates ebb and flow with the economy, with lenders appetite for risk, and sometimes with the pressure lenders feel to make loans. Denial rates in 2017 continued to diminish as they have done since the economy began to improve in 2013 and were the lowest in any year since at least 2004. Using data collected from lenders under the Home Mortgage Disclosure Act (HMDA), CoreLogic estimates only about one in ten mortgage applications were denied last year. Poor credit used to be the primary reason that lenders turned borrowers away, but Yanling Mayer, writing in the CoreLogic Insights blog, says that, in the current credit cycle that has changed.  

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Furry, Fuzzy, Scaly, Motivation

Want to get that reluctant customer who has been "about to" buy a home for months a little push? If an analysis by the Urban Institute (UI) as reported in Freddie Mac's Homeownership blog is on target, your best marketing tool might be available at the local animal shelter. Admittedly that is a bit of a stretch, but here's the rationale. Both the 2013 and the 2017 American Housing Surveys (AHS), asked respondents "would you need help with your pets in case of a disaster?"  Respondents had the option to say if they did not own a pet.  The question is obviously meant for planning purposes for communities as they prepare emergency plans, but UI looked at responses from a different perspective.

 

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