The appraisal can be a stressful process and may threaten to derail transactions. Twenty-one percent of REALTORS® say “appraisal issues” delayed their sales contracts in October, according to the most recent REALTORS® Confidence Index. Appraisal issues led to 13% of contracts being terminated. The appraiser evaluates the home’s lot size, condition (both inside and out), foundation, neighborhood, and any other amenities that add or decrease value.
The Federal Housing Administration on Dec. 2 announced that for 2021 its loan limit for high-cost areas and for Home Equity Conversion Mortgages for reverse mortgages will increase from $765,600 to $822,375, and the floor from $331,760 to $356,362. Current FHA regulations don’t allow HECM loans to vary by metropolitan statistical area or county.
By Jacob Passy
When the coronavirus pandemic first reached U.S. shores earlier this year, worries abounded about how it would affect the country’s housing market.
ATTOM Data Solutions, curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), today released its third-quarter 2020 special report analyzing qualified Opportunity Zones established by Congress in the Tax Cuts and Jobs act of 2017 (see full methodology below). In this report, ATTOM looked at 1,737 zones with sufficient sales data to analyze, meaning they had at least five home sales in the third quarter of 2020.
The report found that median home prices increased from the third quarter of 2019 to the third quarter of 2020 in 74 percent of the zones and rose by more than 10 percent in slightly more than half the zones.
Every metro area tracked by the National Association of Realtors® during the third quarter of 2020 saw home prices increase from a year ago, according to NAR’s latest quarterly report, released today.
Due in large part to record-low mortgage rates and depleted nationwide housing inventory, median single-family home prices grew year-over-year in all 181 metropolitan statistical areas1 tracked by NAR, as every measured market showed sales price gains.
Freddie Mac (OTCQB: FMCC) released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 2.78 percent, the lowest rate in our survey’s history which dates back to 1971.
“Mortgage rates hit another record low, the twelfth time this year, due to economic and political ambiguity,” said Sam Khater, Freddie Mac’s Chief Economist. “Despite the uncertainty that we’ve all experienced this year, the housing market, buoyed by low rates, continues to be a bright spot.”
The Trepp CMBS delinquency rate continued to trend notably lower in October. After two huge jumps in May and June, the rate has now declined for four consecutive months.
The CMBS Delinquency Rate in October is 8.28%, a decline of 64 basis points from the September number. About 1.00% of that number represents loans in the 30 days delinquent bucket – down 40 basis points for the month.
By Michael Tucker
The Urban Land Institute, Washington, D.C., said a consensus of real estate economists surveyed expect a short-lived recession and above-average GDP growth in 2021 and 2022.
The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) increased 3.5 points in September to 81.0, rising for the second consecutive month and continuing the rebound from late spring. Three of the six HPSI components increased month over month, with consumers reporting a substantially more optimistic view of home-selling conditions, expected home price growth, and the labor market, but a more pessimistic view of homebuying conditions and mortgage rate expectations. Year over year, the HPSI is down 10.5 points.
“The HPSI has recovered more than half of the early pandemic-period decline, mirroring the strong home purchase activity of the past few months,” said Doug Duncan, Senior Vice President and Chief Economist. “Consumers’ home price expectations were up strongly this month, with high home prices playing an increasingly – though unsurprisingly – important role in driving both the increase in ‘good time to sell’ sentiment and the decline in ‘good time to buy’ sentiment. Going forward, we believe the wild card to be whether enough sellers enter the market to continue to meet the strong homebuying demand. The home purchase market requires the proper mix of home price growth and continued economic recovery to achieve sustainable levels of housing activity.”
Home sales increased moderately across most Fed districts, but commercial activity remained at a low level, with reports of mixed or deteriorating conditions — although most tenants reportedly paid rent in June, according to the Federal Reserve's latest Beige Book released July 15. Investment activity was slow to nonexistent across the board.
Commercial and multifamily mortgage bankers are expected to close $248 billion in loans backed by income-producing properties this year, a 59 percent decline from 2019’s record volume of $601 billion, a new Mortgage Bankers Association forecast said.
Total multifamily lending alone, which includes some loans made by small and midsize banks not captured in the overall total, is forecast to fall by 42 percent to $213 billion in 2020 from last year’s record total of $364 billion. MBA anticipates a partial rebound in lending volumes in 2021, with activity rising to $390 billion in commercial/multifamily mortgage bankers originations and $308 billion in total multifamily lending.
According to Freddie Mac’s Quarterly Forecast, housing markets have been affected by the pandemic with both home sales and house price growth declining.
“While the housing market undoubtedly has felt the effects of COVID-19, we are encouraged by recent homebuyer demand as well as mortgage rates that should remain at record lows for the foreseeable future.” said Sam Khater, Freddie Mac’s Chief Economist. “However, beyond the initial rebound in the housing market, the economic and housing outlook will be heavily impacted by the prospects for a vaccine, fiscal policy and the underlying organic recovery of the economy which, in combination, make the outlook highly uncertain.”
The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) increased 4.5 points in May to 67.5, building slightly after nearing its all-time survey low in April. Four of the six HPSI components increased month over month, with consumers reporting a somewhat more optimistic view of homebuying conditions and, to a lesser extent, home-selling conditions. Moreover, fewer consumers reported expectations that mortgage rates will go up over the next 12 months. Year over year, the HPSI is down 24.5 points.
“Although the HPSI’s precipitous declines of March and April did not continue in May, Americans’ financial, economic, and housing market concerns remain substantially elevated compared to survey history,” said Doug Duncan, Senior Vice President and Chief Economist. “Low mortgage rates have helped cushion some of the impact of the pandemic on consumer sentiment regarding whether it’s a good time to buy a home, which picked back up this month to late-2018 levels. Although weakened income perceptions and continuing job loss concerns, particularly among renters, are likely weighing on many would-be buyers, purchase mortgage applications have returned to mid-March levels when pandemic response measures began ramping up. Home-selling sentiment remains severely dampened due primarily to economic concerns, though increased purchase activity may improve the confidence of some potential sellers. As lockdown restrictions begin to ease across the country, we expect economic recovery to be largely shaped by consumers’ decisions regarding when and how to reengage in the economy. We believe this month's HPSI results and Friday's unexpectedly favorable labor market report to be encouraging signs for the months ahead.”
The Federal Housing Finance Agency (FHFA) is extending several loan origination flexibilities currently offered by Fannie Mae and Freddie Mac (the Enterprises) designed to help borrowers during the COVID-19 national emergency. Flexibilities extended until at least July 31st include:
To help underserved borrowers, the Federal Housing Finance Agency (FHFA) sent to the Federal Register for publication a final rule on the Federal Home Loan Banks’ (FHLBanks) Housing Goals. The new goals take effect in 2021 and enforcement of the rule will be phased in over three years.
“By creating housing goal targets that are achievable for the Federal Home Loan Banks, the final rule helps ensure they make meaningful contributions to affordable homeownership,” said Director Mark Calabria. “This rule will expand responsible homeownership opportunities for underserved communities across the country.”
Mortgage rates moved up slightly during the past week as prospective homebuyers re-entered the market, Freddie Mac reported June 4 in its Primary Mortgage Market Survey. While the economy slowly rebounds, signs indicate that home sales are picking up nicely even as the supply of available homes remains limited.
Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 3.26 percent.
“Mortgage rates stayed at or near record lows for the fifth straight week and homeowners are taking advantage with refinance activity remaining high,” said Sam Khater, Freddie Mac’s Chief Economist. “Although purchase demand declined thirty-five percent year-over-year in mid-April, demand has improved modestly over the last three weeks.”
More than 3 in 4 potential sellers – 77% – are preparing to sell their homes following the end of stay-at-home orders, with half completing do-it-yourself home improvement projects, according to a new survey from the National Association of Realtors®.
“After a pause, home sellers are gearing up to list their properties with the reopening of the economy,” said NAR Chief Economist Lawrence Yun. “Plenty of buyers also appear ready to take advantage of record-low mortgage rates and the stability that comes with these locked-in monthly payments into future years.”
By Phil Hall
Fannie Mae has issued a Lender Letter to its single-family sellers that updated the temporary policies enacted on March 31 in response to the COVID-19 crisis while reaffirming a key tenet regarding borrower income requirements.
Creditors have flexibility regarding when they must provide appraisals to mortgage applicants, according to an updated Q&A on the Equal Credit Opportunity Act Valuations Rule released April 29 by the Consumer Financial Protection Bureau. Under ordinary circumstance, creditors are required to provide appraisals promptly upon completion or three business days prior to consummation of a transaction.
