The Downside Of The Hot 2020 Housing Market: Rapid Home-Price Growth

 

iLeads Mortgage Market Minute

Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about The Housing Market Is Hot, But Not In A Bubble. This week we’re bringing you:

 

Mortgage Rates Surprisingly Steady Despite Market Drama*

Like many industries, housing finance has a superficial layer that’s fairly easy to understand for the average consumer. A person wants a home. They don’t want to pay cash. They get a loan. Lower rates = lower payments. The end.

Shortly below that superficial layer of understanding, where a surprisingly high percentage of mortgage professionals operate, it’s popular to discuss 10yr Treasury yields as a basis for mortgage rates. The only problem with viewing 10yr yields as the basis for mortgage rates is that they’re not.

Anyone can observe this objective fact by jumping just a bit deeper into the rabbit hole and acquainting themselves with MBS (mortgage-backed securities). These are the true raw ingredients for mortgage rates even though they frequently mimic 10yr Treasury yield movement.

By the time someone has reached this level of understanding, there’s not much left to do when it comes to keeping an eye on mortgage rates. People who know about and track MBS have truly arrived! They’re the coolest mortgage rate watchers you know!

But wouldn’t you know it, they have some head-scratching to do in 2020, and especially today. MBS got demolished today. Normally when that happens, you can bet that mortgage rates will be noticeably higher. Today, however, they’re not.

Why?

 

Read more in-depth here.

 

Suburbs see greatest gain in single-family construction in Q3*

Second-home markets are also seeing growth during the pandemic

The National Association of Home Builders‘ Home Building Geography Index found that during the third quarter, the exodus from big cities to the suburbs and less expensive areas increased as people continue to work remotely.

According to the HBGI, suburbs of medium-sized cities posted the greatest single-family gains in Q3, as there was a 15% growth rate over the last four quarters. The worst-performing regions were large metro urban cores, with a 5.7% gain.

Since Q1, the market share for single-family construction in urban core areas fell from 18% to 17.2%, the report said. However, small metro core and suburban single-family market share increased from 37.7% to 38.2%.

The report showed that single-family construction in second-home markets expanded at a 13.6% average rate over the last four quarters compared to a 10.5% pace for other counties. Apartment construction increased in second-home markets by 11.1%.

“The HBGI clearly shows that the geographic changes noted in the second quarter data continued into the fall, providing a boost to building in more affordable markets,” said NAHB Chief Economist Robert Dietz. “The ability of individuals and families to live further from urban cores is empowering consumers to acquire housing with more space at a lower cost. A key question is how long this effect will last. Our forecast assumes at least a persistent, partial effect beyond the deployment of a vaccine.”

According to the report, apartment construction in large metro core and suburbs fell from 67.1% to 65.2% during Q3, while apartment construction in small metro core areas increased from 21% in Q1 to 22.4% in Q3.

Read more in-depth here.

 

Home Purchase Activity up 9% Despite a Slow Holiday Week*

There was the usual disruption to mortgage application activity during the Thanksgiving holiday week that ended November 27, although the volume, especially of purchase applications held up relatively well. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, eased back by 0.6 percent on a seasonally adjusted basis from one week earlier and was down 32 percent absent adjustment. During Thanksgiving week in 2019 the adjusted Index fell by more than 9.2 percent.

The Refinance Index decreased 5 percent from the previous week but was 102 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 69.5 percent of total applications from 71.1 percent the previous week.

The seasonally adjusted Purchase Index increased 9 percent from one week earlier but was down by 28 percent on an unadjusted basis. Activity was 28 percent higher than the same week one year ago.

Read more in-depth here.

 

Residential Sector Was Key to October Construction Spending Increase*

Total construction spending in October was at a seasonally adjusted annual rate of $1.439 trillion according to U.S. Census Bureau estimates. This was an increase of 1.3 percent from the revised September estimate of $1.420 trillion and 3.7 percent higher than spending in October of 2019. While virtually all residential spending is privately funded, the increase in that sector was the second largest (behind public safety spending) of any in the overall year-over-year comparison.

Spending for the month, prior to adjustment, totaled $128.008 billion compared to $130.251 billion in September. Spending for the year-to-date (YTD) is up 4.3 percent, from $1.140 trillion in 2019 to $1.190 during the first 10 months of 2020.

Privately funded construction spending was at an annual rate of $1.094 trillion during the month compared to $1.079 trillion in September, an increase of 1.4 percent. Spending grew by 3.7 percent on a year-over-year basis and is 4.2 percent higher on a YTD basis at $893.706 billion.

Read more in-depth here.

 

MBS Day Ahead: The Absolutely Ridiculous State of Mortgage Rates vs MBS vs Treasuries*

Following yesterday’s sharp losses, the bond market didn’t do much overnight, nor is it doing much to push back in the other direction this morning. In fact, 10yr yields are starting out at their highest levels since the Pfizer vaccine sell-off in early November, and those were the highest levels since March. Moreover, the weakness made for a perfect technical bounce on the lower line of the trend channel we’ve been tracking. From a purely technical perspective, the implication is to once again challenge (or “re-test”) the recent highs, at a minimum. We’re close enough to those to consider that a work in progress, actually. The scarier scenario would be a move to the upper trend line.

 

In thinking about scary scenarios, it’s definitely one of those precious few historical moments where we absolutely have to differentiate between MBS and Treasuries (99% of the time, this only matters on an intraday basis). Fortunately, MBS are nowhere near their November lows (remember, higher = better in the following chart, because it’s in PRICE as opposed to YIELD).

Read more in-depth here.

 

The downside of the hot 2020 housing market: rapid home-price growth*

With artificially low mortgage rates, there’s nothing to restrain demand

Demand for housing was strong in early 2020, before the COVID-19 crisis hit. Mandated shut-down measures and the fear of what COVID would do to our economy temporarily immobilized the housing market, evinced by nine weeks of declines in the weekly purchase applications data on a year-over-year basis. Then it was as if the Housing Demographic God exerted her chronokinetic powers to snap demand back to pre-COVID levels of growth. The frozen market thawed and resumed its steady pace of growth, even making up for lost time.

Instead of a housing crash, as many others predicted would be the lasting consequence of shut-down policies and massive job losses across the nation, the opposite happened as the 2020 U.S. housing market has been the most out-performing economic sector in the world.

However, we now have another issue to worry about — that home prices will accelerate too quickly, unrestrained by an increase in mortgage rates. As you can see below, we have deviated from the normal price growth that had been the trend in recent years.

 

 

My biggest fear for the housing market in years 2020-2024 was never a lack of demand, as the housing bubble boys have been trolling about the last eight years — it was an unhealthy rate of price growth due to demographics and low mortgage rates.

When demographics are good for housing, meaning we have a large number of our populace at home-buying age, demand — and thus home prices — can be moderated by higher interest rates. We were witness to this in 2018 when mortgage rates increased to 4.75%-5%, demand fell and the rate of growth of real home prices went negative, year over year.

That was then and we can clearly see this isn’t the case anymore.

Read more in-depth here.

 

Finding highly affordable leads to keep sales coming in

At iLeads, we have many great solutions for mortgage LO’s at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

You can also schedule a call here.

Get Started

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    COVID-19 Claims Acceptance Lower Than Predicted

    ileads insurance market minute
    Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Arch Insurance Launches Terrorism Insurance For SMEs. This week we’re bringing you:

     

    Insurance industry fights on to avoid paying out millions in Covid shutdown payouts*

    The insurance industry is considering launching a second test case to try to avoid paying hundreds of millions of dollars to businesses forced to shut because of the coronavirus pandemic.

    Insurers lost a test case on Wednesday in which the industry tried to knock out every claim for business interruption insurance lodged due to Covid-19.

    Lawyers for businesses said insurers had advised customers that losses from the virus could not be claimed as the disease was a quarantinable one, under the Quarantine Act of 1908. However, the act was repealed in 2015 and the court said the carve-out did not apply to a similar clause in the law that replaced it, the Biosecurity Act.

    The Insurance Council of Australia, which funded the original action, said it was considering funding a second case that would focus on different issues.

    uch a case would test how many cases would be needed, and how close to a business, to count as an outbreak of an infectious disease and result in a payout.

    It would also test whether government closure orders amount to “prevention of access” to business premises, which also triggers a payout.

    The UK insurance industry recently lost a case brought by the Financial Conduct Authority dealing with similar issues, although there are differences between British and Australian law.

    Separately, the ICA is also considering asking the high court to allow an appeal against the result of the first test case.

    “The industry seeks to progress a court resolution of these matters quickly, and regardless of any decision around an appeal on the first test case,” it said.

    Find out more in-depth here.

     

    Zywave’s ITC acquisition creates leading agency solutions provider*

    The insurance technology space was shaken up in November when Zywave, Inc., a provider of cloud-based sales management, client delivery, content and analytics solutions for the insurance industry, announced that it had entered into a definitive agreement to acquire Insurance Technologies Corporation (ITC).

    On November 30, ITC CEO Laird Rixford (pictured) and Zywave CEO Jason Liu came together during a LinkedIn webinar to provide further clarity on the deal and why the two firms make an ideal pair.

    “The ITC team is excited to be joining forces with Zywave … to make sure that we are providing better support and service to our shared customers,” said Rixford. “Like Zywave, we offer solutions designed for the independent insurance agency market to help them drive business efficiencies and accelerate their growth.”

    ITC provides everything from agency marketing services – including websites, marketing communication automation, search engine marketing, and custom content services to drive social media engagement – to agency management systems and a personal lines comparative rater, which automates the quoting process and enables users to receive multiple quotes instantly.

    Read more in-depth here.

     

    COVID-19 claims acceptance lower than predicted*

    It has been more than eight months since the start of the COVID-19 pandemic in the U.S. and the impact on workers compensation claims continues to be less than predicted, experts say.

    In much of the country, the number of COVID-19 workers comp claims accepted — even in the 17 states with a presumption law or executive order that allows workers to claim they contracted the virus at work — have not been particularly high or costly, they say.

    Illinois, despite having a presumption law with one of the widest nets, hasn’t seen the big influx of claims that was anticipated, said Rich Lenkov, capital member and head of the workers compensation practice at Bryce Downey & Lenkov LLC in Chicago. He estimates that COVID-19 claims comprised less than 5% of the overall claims he’s seen in his practice this year.

    “I represent a lot of companies that employ first responders, hospitals, and we’re seeing more (claims) than the average, but not to the degree a lot of us thought initially,” he said.

    Health care employers are erring more on the side of accepting claims if it’s clear that an exposure occurred at work, he said. But most of his clients have tended to be “fairly skeptical” about whether the claims did arise out of and in the course of employment because of “the pervasiveness of the pandemic. There’s difficulty in pinpointing exactly where an employee might have been exposed. For the most part, we are disputing a relationship to work.”

    Read more in-depth here.

     

    Finding highly affordable leads to keep sales coming in

    At iLeads, we have many great solutions for insurance agents at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

    We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

    You can also schedule a call here.

    Get Started

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      The Housing Market Is Hot, But Not In A Bubble

       

      iLeads Mortgage Market Minute

      Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about MBA Predicts Record Purchase Mortgage Volume In 2021. This week we’re bringing you:

       

      September Home Price Gains Blow Away Forecasts*

      Annual price increases in September were quite literally off the charts. Both the S&P CoreLogic Case-Shiller National Index and the Housing Market Index from the Federal Housing Finance Agency (FHFA) recorded an annual appreciation of at least 7 percent.

      The Case-Shiller National Index, which covers all nine U.S. census divisions, reported a 7.0 percent annual gain in September, up from the August increase of 5.8 percent. The National Index posted 1.2 percent month-over-month growth before seasonal adjustment and 1.4 percent afterward.

      As has been the case since the beginning of the pandemic, housing data from Wayne County, Michigan where Detroit is located has been insufficient to include the city in the indices. The 10-City Composite annual increase came in at 6.2 percent and the 20 City at 6.6 percent. The two composites had appreciated in August by 4.9 percent and 5.3 percent, respectively. On a monthly basis, the 10-City increased 1.3 percent before the adjustment and 1.2 percent afterward, while the 20 City’s gains were the reverse, rising 1.2 percent before the adjustment and 1.3 percent afterward. In September, all 19 cities (excluding Detroit) reported increases before and after seasonal adjustment.

      The 20-City Composite is the Case-Shiller Component about which analysts usually offer a forecast. They badly undershot the mark for September. Analysts polled by Econoday were expecting an annual increase of 5.4 percent, Trading Economics predicted a 5.1 percent gain.

       

      September-Home Price Gains Blow Away Forecasts

      Read more in-depth here.

       

      Low, low mortgage rates make 19.4 million eligible for refi*

      Homeowners could save an aggregate of $5.98 billion per month

      As mortgage rates stay below 3% for the 17th consecutive week, a Black Knight report released Friday found that the number of “high quality” refinance candidates continues to climb. According to the report, a whopping 19.4 million homeowners are now in a position to save through refis – the most in history.

      Black Knight’s report views prime candidates as 30-year mortgage-holders who have at least 20% equity in their homes, credit scores of 720 or higher, are current on their payments, and who stand to cut their first lien rates at least 0.75% by refinancing.

      Looking at current mortgage rates, Black Knight estimates those 19.4 million candidates can save an average of $309 per month by refinancing. If every qualified borrower did so, the aggregate potential savings would be the most ever recorded – a massive $5.98 billion.

      Some borrowers could save even more. With today’s rates, the report found 4.5 million could save at least $400 a month, while 2.7 million could save an average of $500 or more.

      Regionally, California led the nation in the number of refi candidates – a total of 3 million could potentially save on average $420 a month. Florida recorded 1.4 million borrowers who could do the same, followed by 1.3 million in Texas and 1.1 million in New York.

      Read more in-depth here.

       

      Pandemic Causing Almost Half of Americans to Consider a Move*

      A recent survey by Lending Tree found that nearly half of Americans are thinking about moving in the not-to-distant future and it appears that the COVID-19 pandemic may be at least part of their motivation. Crissinda Ponder writes that the health crisis has affected nearly every aspect of daily life, and with 11 million Americans unemployed, residents make an exodus from major cities, a desire for more living space. There is no reason to think that housing choices would be any less affected.

      The Lending Tree survey covered 2,000 consumers and 46 percent said they were thinking about relocating within the next year. Twenty-seven percent are considering a new home in their current area, with a primary motivation of reducing their living expenses. Another 12 percent would consider a nearby city, while 8 percent would like to move to a new state.

      Reducing living expenses was cited by 44 percent of all respondents. Other reasons frequently given were:

      • “My current home is too small” (27 percent)
      • “I’m looking for different features” (27 percent)
      • “I’d rather live in a different part of town” (12 percent)

      Renters also frequently said they didn’t like the way their property was being managed.

       

      Read more in-depth here.

       

      How The New Loan Limits Affect Mortgage Rates*

      If you follow the MBS Commentary channel on this site, you will have already seen most of the following, but it’s relevant for consumers as well. As far as mortgage rates are concerned, the increase in conforming loan limits doesn’t have a direct impact, but it does change rate availability for those seeking certain loan amounts. There’s a link below where you can see exactly what the new loan limit is for any given county.

      If you’d like to read the official FHFA press release, here you go, but here’s the skinny on the new conforming loan limit of $548,250 for 2021, up from $510,400 in 2020.

      Which loans does this apply to?

      Conventional, conforming loans (those sold to or securitized by Fannie Mae and Freddie Mac, which is a vast majority of the market), both refinances and purchases

      Does this apply to FHA/VA/USDA loans?

      Not immediately, and not equally. FHA will use the new number to announce its own loan limit increases in a week or two. When that happens, you can always use this page to determine your county’s limit. VA is a bit different depending on how much entitlement you have (read more on the VA site).

      What’s the benefit of having a conforming loan amount?

      Conforming loans have the lowest effective rates (FHA rates may be lower, but they carry mortgage insurance). They also have different qualification standards (typically “easier”) than loans for higher amounts, but this can depend on the lender and your scenario.

       

      Read more in-depth here.

       

      Here’s what to expect from a Biden administration regarding housing*

      Likely candidates for key positions, and what regulation focus to expect

      We are now under 60 days remaining until we have President Biden and Vice President Harris leading a new administration in D.C. Beyond any political views of the election and the ensuing drama, the industry is asking: What will a Biden regime mean to housing and mortgages? How should we think about regulation, the GSEs, HUD, and more?

      Here are a few thoughts to consider as to what the next four years may look like.

      In a general sense, Democratic regimes tend to be more bullish for government support to housing, while Republican ones are more bullish for lowering the aggressiveness of regulators and oversight. While not a universal truth, we can all remember the eight years under President Obama and the impact of a new, aggressive, regulator tasked under a congressional legal mandate to implement the required rules set forth in Dodd Frank.

      Those were challenging years, and while the implementation was hard and every rule has imperfections, today we are past those statutory obligations as all the rules required are now in place. For that reason, I do not expect the aggressive regulatory posture overseeing mortgage lenders to be like it was under Obama.

      So how should we think about a Biden administration? Here are some key elements:

      Transition: At this point, the transition team has assigned ‘Agency Review Teams’ to each regulator and, not surprisingly, there are many familiar names on these teams that will affect housing. The HUD team is headed by a former political from the Obama years, Erica Poethig, and the team consists of several others from that administration, as well as names like Julia Gordan, a long-time credible consumer advocate for housing policy in Washington.

      Treasury, NEC, CFPB, and more have known similar members. Treasury, for example, has Helen Kanovsky. Kanovsky was the general counsel at HUD during both Secretary Donovan and Castro’s tenure. She then joined the Mortgage Bankers Association as the general counsel there until her recent retirement.

      Key Takeaway: There are two. First is the noticeable absence of a transition team for FHFA. Second, there is a deep bench of knowledgeable experts who will help bring experience to the task of filling key positions, evaluating policies made and proposed, and more.

      Read more in-depth here.

       

      The housing market is hot, but not in a bubble*

      But rising home prices are a concern

      Existing home sales came in at a whopping 6,850,000, beating estimates with the highest print since 2006. Days on market fell from 36 days to 21 days on a year-over-year basis. Cash buyers remain at a historically high level of 19%, the same as last year, while sales grew 26.6% year over year. We have done a lot running around with the existing home sales data to be up just 2.4% year to date.

      The housing market is clearly hot.

      While we celebrate these strong numbers, keep in mind these three points:

      First, expect the data to moderate, so don’t freak out when we see the rate of growth cool down. A normal trend will eventually materialize. You may be told that future moderation indicates “cracks in the housing market, but don’t buy into it. I previously wrote that if we really saw cracks in the housing market, these are a few indicators to track and to beware of doom and gloom housing headlines.

      Second, if the next existing home sales report misses expectations, you may be told that this is due to a lack of inventory. Don’t listen. Remember, lower inventory tends to go with higher sales — and higher sales means folks are buying homes…therefore…I know you are following me here… there must be homes to buy.

      Unsold inventory sits at an all-time low 2.5-month supply at the current sales pace, down from 2.7 months in September and down from the 3.9-month figure recorded in October 2019. Inventory is tight, but it’s not non-existent. Tight inventory also encourages builders to create more inventory.

      11 Nar-Inventory

      Existing home sales

      Read more in-depth here.

       

      Finding highly affordable leads to keep sales coming in

      At iLeads, we have many great solutions for mortgage LO’s at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

      We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

      You can also schedule a call here.

      Get Started

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        Arch Insurance Launches Terrorism Insurance For SMEs

         

        ileads insurance market minute

         

        Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Independent Insurance Agents Continue To Face “Headwinds” Due To Pandemic. This week we’re bringing you:

         

        Demand for predictive analytics on the rise among insurers – WTW*

        Demand for predictive analytics is on the rise as life insurers look for new ways to boost business performance and customer relations in a tight market, according to a new study from Willis Towers Watson.

        A survey of European life insurers found that more than 80% of companies that already use predictive analytics reported a positive impact on their business – and none reported negative outcomes.

        “In competitive markets, these techniques can provide insurers with a price advantage; in less competitive markets, they can lead to material cost savings,” Willis Towers Watson said. “With the help of predictive analytics, historical and real-time data can also be mined to anticipate industry trends and customer needs, enabling insurers to exceed customer expectations.”

        Sixty-eight percent of insurers surveyed agreed that predictive analytics had a positive impact on increased sales and cross-selling, and 41% reported that predictive analytics helped reduce issue/underwriting expenses and claims costs.

        However, the survey found that while some life insurers are making progress with their predictive analytics capabilities, most still had “significant challenges” – including several strategic capacity issues:

        • 30% of respondents said that their analytics and/or actuarial teams lacked the capacity to accomplish their predictive analytics goals
        • Many respondents cited data quality and reliability issues (58%) and infrastructure and data warehouse constraints (42%), with many in-house facilities strained by large volumes of data that require greater processing power
        • 77% of respondents still use traditional environments (desktops, servers and mainframes) for analytics. One third are currently exploring cloud-based systems, which could allow greater flexibility, Willis Towers Watson said

        Find out more in-depth here.

         

        U.S. tech firms can compensate gig-workers with equity under SEC proposal*

        (Reuters) – The U.S. securities regulator on Tuesday proposed a pilot program to allow tech companies like Uber Technologies Inc. and Lyft Inc. to pay gig workers up to 15% of their annual compensation in equity rather than cash, a move it said was designed to reflect changes in the workforce.

        The Securities and Exchange Commission said internet-based companies may have the same incentives to offer equity compensation to gig-workers as they do to employees. Until now, though, SEC rules have not allowed companies to pay gig workers in equity.

        The proposal would not require an increase in pay, just create flexibility on whether to pay using cash or equity. It comes amid a fierce debate over the fast-growing gig economy, which labor activists complain exploits workers, depriving them of job security and traditional benefits like healthcare and paid vacations. The SEC’s Democratic commissioners said giving tech giants such flexibility would create an uneven playing field for other types of companies.

        “Work relationships have evolved along with technology, and workers who participate in the gig economy have become increasingly important to the continued growth of the broader U.S. economy,” said SEC Chairman Jay Clayton in a statement.

        The proposed temporary rules would allow gig workers to participate in the growth of the companies their efforts support, he added, capped at 15% of annual compensation or $75,000 in three years.

        Read more in-depth here.

         

        Arch Insurance launches terrorism insurance for SMEs*

        Arch Insurance, the UK division of the Arch Capital Group, has reportedly introduced new terrorism insurance for small and medium-sized companies in the country.

        This new offering is said to offer an ‘expansive’ range of coverage as standard and is available as both a standalone policy as well as an integrated component of an existing programme.

        The coverage includes prevention of access, loss of attraction, specified and unspecified customers and suppliers, and full failure of utilities.

        In addition, it is said to offer coverage for brand rehabilitation costs.

        Arch UK regional division underwriting director Stuart Danskin was quoted as saying: “Recent incidents have shown how quickly the terrorism threat level can escalate and how difficult it can be to predict where and when businesses will be impacted.

        “This has exposed shortfalls, with insureds often facing coverage gaps at the times when they need it most. Through our new product, we can provide our customers with relevant coverage that is flexible and adaptable to their specific requirements.”

        Arch’s new terrorism insurance is also said to feature enhanced customization and offers tailored coverage for policyholders.

        Read more in-depth here.

         

        Finding highly affordable leads to keep sales coming in

        At iLeads, we have many great solutions for insurance agents at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

        We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

        You can also schedule a call here.

        Get Started

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          MBA Predicts Record Purchase Mortgage Volume In 2021

           

          iLeads Mortgage Market Minute

          Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about The Covid Pandemic Is Worse Than 2008 Crisis For A Majority Of Americans, Study Says. This week we’re bringing you:

           

          Senior Loan Officer Opinion Survey Q3 2020*

          The Federal Reserve’s latest Senior Loan Officer Opinion Survey on Bank Lending Practices addresses changes in the standards and terms on, and demand for, bank loans to businesses and households. The lending data show a tightening of standards across all purposes, but sufficient demand-strength for gains in residential real estate.

          SLOOS Chart

           

          For the third quarter, significant net shares of banks reported having tightened standards for commercial and industrial (C&I) loans to large, middle-market, and small firms. Meanwhile, they also continued enforcement of interest rate floors, which began in the second quarter. A significant net share of banks reported weaker demand for C&I loans to firms of all sizes during the third quarter.

          In commercial real estate (CRE) lending, which includes multifamily residential real estate lending, financing construction and land development, and lending on nonfarm, nonresidential properties, a significant net share of banks reported a tightening of standards and a weaker demand.

          Read more in-depth here.

           

          Mortgage Rates Remain Near Recent Lows*

          Mortgage rates were little-changed today, with the average lender only microscopically better than yesterday. That means few loan seekers will notice any difference from yesterday. That leaves us in line with the low rate levels seen immediately following the election earlier this month, and that’s as low as rates have been since early August, as long as we’re talking about purchase mortgage rates. Refis continue to suffer relative to purchases due to the adverse market fee imposed by Fannie Mae and Freddie Mac (rolled out by lenders at various times over the past 2 months).

          Today was somewhat notable due to the fact that the bond market (normally the most important driving force for mortgage rates) told a different story. Bonds suggested rates should have moved lower more noticeably. It’s no surprise that they didn’t, however. Mortgage rates have frequently been disconnected from bonds due to unique impacts from the pandemic.

          Read more in-depth here.

           

          Builder Confidence Continues to Shatter Previous Records*

          For the third straight month the level of builder confidence in the new home market set a record high. The National Association of Home Builders (NAHB) said the Housing Market Index (HMI) it co-sponsors with Wells Fargo soared 5 points in November to 90. This is the highest level in the 35-year history of the HMI which set records of 83 in September and 85 in October. These are the only times in its history that the Index surpassed the 80-point level and is triple its level in April when the pandemic caused it to plunge.

          NAHB cautioned, however, that 69 percent of the survey responses were received before the results of the presidential election were called on Nov. 7. The election results and their future impacts on housing market conditions, will be more fully reflected in December’s HMI report.

          Robert Dietz, NAHB chief economist, said that builder confidence has soared because historically low mortgage rates, favorable demographics, and an ongoing buyer preference for the suburbs have spurred demand and raised new home sales by nearly 17 percent year-over-year. He added, “Though builders continue to sign sales contracts at a solid pace, lot and material availability is holding back some building activity. Looking ahead to next year, regulatory policy risk will be a key concern given these supply-side constraints.

           

          Read more in-depth here.

           

          What the surge in COVID cases means for the housing market this winter*

          Two factors to consider

          With COVID infection rates exploding and hospitalization rates rising as we go into the cold winter months, the risk this poses to our recovering housing market is a question that should be addressed. In a previous article, I identified infection rates during the winter months as one of the economy’s high-risk variables.

          Before COVID-19 hit our shores, we were trending at 10% growth, working at cycle highs in demand. The housing heat months for the MBA purchase application data are from the second week of January to May’s first week. Typically, after May, total volumes fall as seasonality kicks in. We had double-digit growth until March 18.

          march 19th application data

           

          Read more in-depth here.

           

          Drone mapping in the real estate industry*

          Drone mapping is replacing manned aerial flyovers due to high resolution and low costs

          Year to year, the evolution of computer technology can be staggering. In most cases, the advancements cause disruption— and opportunity—in every industry. In real estate, one such disruption is caused by drones, which have become an extremely effective tool for mapping and marketing property.

          Drone mapping is replacing manned aerial flyovers such as Google Earth, a technology the industry has relied on for decades. More than taking pictures, videos, and plotting property boundaries on a map, drone mapping provides buyers and sellers with low-cost, high-resolution, and frequently updated imagery.

          Drone Mapping
          Drones autonomously capture multiple overlapping images that are georeferenced and stitched together to create an orthomosaic. The orthomosaic is used just like any other layer in a GIS to serve as an accurate, high-resolution, updated aerial basemap.

          Data such as boundary lines, trails, flood zones, topographic contours etc. can be laid on top of the drone imagery for mapping. Informative data such as deer stands, utilities, hog damage etc. can also be collected and plotted.

          Many photogrammetric softwares are available for drone mapping, such as Pix4D, DroneDeploy. Each software has its pros and cons, but all generate more than just imagery. A standard DJI drone and camera alone can create 3D meshes, digital elevation models, and measure plant health (via VARI algorithm). The data outputs can be used to generate topographic contours, identify troubled areas in agricultural fields, or even help determine the best location to build a home or cabin.

          A small, helpful practice is adding the property boundaries and descriptive text on the drone photos. Software such as Photoshop or GIMP (a free open-source alternative) can aid with editing the raster photos themselves and adding vector boundaries and text.

          Although drone mapping can assist marketing efforts and helps buyers make informed decisions, it is not ideal for all properties. Properties that are too large or densely forested can cause delays in image processing or increase overall cost.

          Read more in-depth here.

           

          MBA predicts record purchase mortgage volume in 2021*

          A rebounding economy is likely to see higher mortgage rates

          The Mortgage Bankers Association on Tuesday released revised estimates for the third and fourth quarter of 2020 and predicted record purchase volume for 2021. Although the MBA expects decreased refinancings in 2021 and a decline in overall origination to around $2.56 trillion, that would still be the second-highest origination total in the last 15 years.

          The rebounding economy is likely to mean higher mortgage rates, with the MBA forecasting 2.9% by the end of 2020, rising to 3.3% by Q4 2021.

          The MBA is forecasting a rise in purchase originations to $1.59 trillion, which would break the previous record of $1.51 trillion set in 2005. However, the MBA sees refinances decreasing to $971 billion.

          “The housing market has seen a meaningful rebound since the onset of the pandemic,” said Mike Fratantoni, MBA chief economist. “Record-low mortgage rates have led to a surge in borrower demand for refinances and home purchases.”

          For 2020, the MBA is estimating $3.9 trillion in mortgage originations – the highest since 2003 and a 50% increase from 2019.

          Read more in-depth here.

           

          Finding highly affordable leads to keep sales coming in

          At iLeads, we have many great solutions for mortgage LO’s at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

          We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

          You can also schedule a call here.

          Get Started

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            Independent Insurance Agents Continue To Face “Headwinds” Due To Pandemic

            ileads insurance market minute

             

            Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Lemonade CEO Calls Insurance The ‘Single-Most Destructible Industry On The Planet’. This week we’re bringing you:

             

            Amazon move shaves $22 billion off the market value of insurers, drug stores*

            Leading drug stores, drug distributors, and health insurers lost about $22 billion in market value Tuesday after Amazon unveiled plans to start selling prescription medicines to its Prime customers in the US, according to a Bloomberg report.

            The announcement pushed Walgreens Boots Alliance and CVS Health Corp. down in value the most since March, according to Bloomberg. Rite Aid Corp. dropped 17%.

            There have been expectations of Amazon’s move since the internet giant snapped up PillPack for about $1 billion in 2018, Bloomberg reported. The same year, Amazon teamed up with Berkshire Hathaway and JPMorgan Chase for Haven Healthcare.

            Evercore ISI analyst Elizabeth Anderson said in a note that for drug stores, Amazon’s move is a “net negative and will likely bring back conversations about appropriate multiples despite recent positive news about the role of drug stores in coronavirus vaccine distribution. This will likely create an overhang for the group until we determine the take up of Amazon Pharmacy.”

            Walgreens Boots fell as much as 10%, while Rite Aid dropped 17% and CVS Health fell 8.5%, Bloomberg reported. Even AmerisourceBergen Corp., Amazon and PillPack’s distributor, dropped as much as 3.7%.

            Find out more in-depth here.

             

            GM to offer auto insurance that uses data from connected vehicles to price rates*

            General Motors is relaunching an auto insurance division as a way to generate new revenue using data from its growing numbers of connected vehicles in the U.S.

            The new business unit will be under the automaker’s OnStar connectivity brand. Starting Wednesday, coverage will be offered to about 1,000 GM employees in Arizona before rolling out to its 85,100 U.S. employees and the general public by the end of next year.

            GM previously offered its own auto insurance from 1925 to 2008. The operations generated billions in annual revenue and contributed $400 million to $1.1 billion to GM’s bottom line during their final years of operation. Andrew Rose, president of OnStar Insurance Services, declined to disclose earnings projections for the new insurance business but said the “opportunity is enormous.”

            “GM has been a material player in that market before. We hope that we can return to being a material player in that market again,” said Rose, an auto insurance veteran who joined the company in January. “Auto insurance is a $250 billion marketplace.”

            Non-GM owners will be allowed on OnStar Insurance, but the automaker will offer additional discounts for those who are GM owners or subscribe to their services, Rose said.

            Read more in-depth here.

             

            Independent insurance agents continue to face “headwinds” due to pandemic*

            Although the pandemic may have presented an opportunity for independent insurance agents to better serve customers, a new report from J.D. Power found that agents are “facing headwinds” due to complications related to the global outbreak and increasing competition.

            J.D. Power’s latest study, the “2020 US Independent Agent Performance and Satisfaction Study,” is the analytics and intelligence company’s third in its annual series. Developed together with the Independent Insurance Agents & Brokers of America (IIABA), the study evaluates the evolving role of independent agents in P&C insurance distribution, general business outlook, management strategy, and overall satisfaction with personal lines and commercial lines insurers in the US.

            Key findings of the study include:

            Effects of pandemic put spotlight on independent agent challenges: 36% of agents say they were unaware of their carriers’ efforts during the pandemic. Agents have also fallen short in leveraging their strategic advantage during the pandemic; only 42% of independent agent customers say they were contacted to help manage their policy costs during the crisis, compared to 52% of direct customers who say the same.
            Progressive wields influence on independent agent growth: Although independent agents write 58% of all P&C policies, their market share is falling – particularly in personal lines auto, where they write just 31% of all policies. Progressive’s agency channel notably accounts for 52% of all personal lines’ growth among independent agents.

            Digital support could improve agent satisfaction: Digital channels are independent agents’ preferred means of communication with insurers, J.D. Power found, with email and online dashboards the most preferred communication methods. Specific digital tools that drive agent satisfaction focus on sales and product training and identification of cross-sell opportunities. However, the study found that these digital offerings are only used by fewer than 60% of agents.

            “Help me help you”: Satisfaction among independent agents is higher among carriers with diversified product offerings (i.e. enabling agents to offer flexible design and onboarding, enabling them to offer product bundling), the study revealed. About 43% indicate receiving this level of support from insurers.

            Cost efficiency not linked to agent satisfaction: J.D. Power found that the notion that simply paying agents a higher commission translates to higher agent satisfaction and improved business outcomes is not true. The study noted that many of the top-performing agent-based insurers have been able to maintain expense discipline while also delivering on agent expectations.

            Independent agents focused on alignment with carriers: Overall satisfaction of independent agents with carriers that demonstrate better market alignment (by offering adequate support for targeted industries) is 126 points higher (on a 1,000-point scale) than with those carriers that do not provide adequate support.

            Traditional agents face competition from virtual agents: 81% of consumers say they would be open to working with virtual insurance agents to perform core insurance activities – a trend J.D. Power suggests that traditional agency distribution is increasingly threatened by.

            Read more in-depth here.

             

            Finding highly affordable leads to keep sales coming in

            At iLeads, we have many great solutions for insurance agents at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

            We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

            You can also schedule a call here.

            Get Started

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              The Covid Pandemic Is Worse Than 2008 Crisis For A Majority...

              Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about Mortgage Rates Pop Higher as Lenders Guard Against Volatility. This week we’re bringing you:

               

              Buyers and sellers agree: it’s a good time to enter the housing market*

              Though a divergence in home purchasing vs personal finances slowed the sentiment’s increase

              For the third consecutive month, Fannie Mae’s Home Purchase Sentiment Index, a composite index designed to track the housing market and consumers’ desire to sell or buy a home, gained 0.7 points in October to 81.7.

              Though that number is increasing, it’s slowed down compared to gains in previous months, including August’s 3.3 points rise and September’s 3.5.

              Compared to this time last year, the HPSI is still down 7.1 points but has steadily recovered over 60% of its COVID-19 pandemic loss when April’s HPSI hit its lowest reading since November 2011.

              Though prospective buyers revealed slight wariness in September, Fannie Mae reported buyer morale gained 6% in October, with 60% of respondents saying it is a good time to buy a home while those who believe it is a bad time fell to 35%.

              The idea that it’s a seller’s market also picked up steam last month with the percentage of respondents who said it was a good time to sell a home gaining 3% to 59% in October.

              Read more in-depth here.

               

              Mortgage Rates Back Up To Pre-Election Levels*

              The mortgage rate movement had been very calm relatively resilient compared to the broader bond market. In other words, mortgages have been doing better than US Treasuries. The 10yr Treasury yield is frequently used as a bellwether for mortgage rate movements and it’s moved up roughly 0.30% since the beginning of October. Mortgage rates were roughly in line with early October levels as of yesterday, despite rising fairly abruptly. Not bad!

              Over the course of the past few days, 10yr yields are up roughly 0.2%. This time around, the mortgage market hasn’t been able to avoid taking its lumps with the average lender now quoting 30yr fixed rates that are 0.125% higher compared to last Thursday.

              Read more in-depth here.

               

              More People Are Concerned About Job/Financial Security Says Latest Housing Survey*

              After its third straight month of gains, Fannie Mae’s Home Purchase Sentiment Index (HPSI) is now at 81.7, up 0.7 points from September. The October increase was the fifth in the six months since the Index, based on some components of the National Housing Survey, bottomed out at a pandemic generated nine-year low of 63.0. The index is still down 7.1 points from its October 2019 level.

               

              Read more in-depth here.

               

              Non-QM lenders are back. But will brokers pick up the phone?*

              Non-QM originators are ramping up operations, but finding brokers willing to work the loans remains a challenge

              Mark Dodson was having a promising start to the year. His corner of the Atlanta mortgage market – high-value home loans that wouldn’t be bought by the GSEs – was booming.

              But by March there were whispers that the non-QM space was going to vanish soon. Liquidity had dried up and bond investors were running for the hills.

              At that point, Dodson was actively working on a jumbo loan for friends of his from the church.

              “I told my client, my friends, ‘Look, I know you’re supposed to close in 10 days but we’re closing Friday and you let everybody know it or you may not close,’” Dodson said. “And damn if we didn’t close Friday and they shut it down Monday.”

              “I lost $6 million in April,” the broker added.

              During the freeze, non-QM lenders – who issue mortgages that can’t be sold to Fannie Mae or Freddie Mac, typically to self-employed borrowers – stopped accepting applications, collectively laid off hundreds of workers; had difficult conversations with their investors, correspondent partners, and mortgage brokers alike; and plotted an eventual return to an uncertain market.

               

              Read more in-depth here.

               

              The Covid pandemic is worse than the 2008 crisis for a majority of Americans, study says*

              The majority of U.S. adults believe the Covid-19 economy is worse than the 2008 Great Recession, according to a recent Edelman Financial Engines 2020 Financial Insights study.

              Just over half, or 51%, said that was the case.

              “That is scary,” said Ric Edelman, founder of Edelman Financial Engines and a best-selling author.

              “It took 10 years for millions of Americans to get jobs back [after 2008], according to the Labor Department,” he said. “If it is worse than that, that is saying a lot.”

              While he believes Americans are correct in feeling it is worse now for them, Edelman points out that the current recession is affecting different people in different ways.

              “Those who are doing well are doing even better,” Edelman said. “Those who are hurting are hurting even more.”

              Edelman’s books include “The Truth About Money” and “Discover the Wealth Within You.”

              Read more in-depth here.

               

              Finding highly affordable leads to keep sales coming in

              At iLeads, we have many great solutions for mortgage LO’s at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

              We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

              You can also schedule a call here.

              Get Started

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                Lemonade CEO Calls Insurance The ‘Single-Most Destructible Industry On The Planet’

                ileads insurance market minute

                 

                Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Data Breach At Insurer Affects Up To One Million Customers. This week we’re bringing you:

                 

                Insurers ask to hike rates by 25%*

                Over the last 40 years, the NOAA calculates that climate and weather disasters have cost the US $1.75 trillion in damage – and those costs, when insured, obviously trickle down to policyholders.

                When a hurricane like Dorian, that battered North Carolina last year runs up costs, so premiums have to rise – which is why insurance companies in the state are requesting approval for a hike of up to 25% from August 2021.

                Mike Causey, North Carolina’s Insurance Commissioner told reporters that the NCRB (North Carolina Rate Bureau) had made the request – which averaged out at 24.5% across the state.

                The Department of Insurance can now accept the proposal, or more likely, try to haggle that number down. If both parties can’t come to an agreement within 50 days, then Causey will ask for a hearing.

                Despite their heavy payouts following last year’s hurricane, there is no guarantee that carriers will get what they ask for – back in 2018 the NCRB asked for just over 17% – settling for a far less impressive 4%.

                Find out more in-depth here.

                 

                Insurers set to recover quickly from COVID-19 hit: Swiss Re*

                The global nonlife insurance sector will see a swift recovery in premium growth next year, driven by strong and broad-based rate hardening in commercial lines, Swiss Re Ltd. said Wednesday in a report.

                Global nonlife premiums will grow by 1.1% this year and recover to an average annual growth rate of 3.6% in 2021 and 2022, the Swiss Re Institute sigma report said.

                The outlook reverses its June forecast which predicted stagnating premiums.

                “COVID-19 has impacted the insurance industry, although less so than we initially feared,” and insurance demand in advanced markets was better than expected, Swiss Re said in the report.

                Advanced market nonlife insurance premiums are forecast to grow by close to 3% in both 2021 and 2022, led by Asia and the United States, the report said.

                China will remain the fastest-growing market with premiums up an estimated 10% annually over the next two years, it said.

                The upswing in rates has broadened across commercial lines in almost all regions with casualty business, which had remained soft until 2018, seeing rate hardening, notably in the U.S. and Europe, Swiss Re said.

                “Market conditions from both the demand and supply sides point to continued pricing strength,” Andreas Berger, CEO of Swiss Re Corporate Solutions said in a statement.

                Read more in-depth here.

                 

                Lemonade CEO calls insurance the ‘single-most destructible industry on the planet’*

                Daniel Schreiber, chief executive of insurance provider Lemonade, explained how building the company with a focus on technology and customer delight is powering its business and customer growth.

                Read more in-depth here.

                 

                Finding highly affordable leads to keep sales coming in

                At iLeads, we have many great solutions for insurance agents at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

                We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

                You can also schedule a call here.

                Get Started

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                  ILeads.com Taps Industry Innovator Johnny Wilds to Support The Company’s Aggressive...

                  Leading homeowner acquisition provider expands its team to meet the increasing demand for quality leads and customer acquisition tools resulting from record low-interest rates.

                  Newport Beach, California / November 11,  2020 iLeads.com, the leading provider of customer acquisition solutions matched with intent-based consumer leads and property, mortgage, and homeownership data, announced that Johnny Wilds has joined the company as Director of New Business Development. Wilds is a recognized leader in providing revenue-generating solutions, with deep expertise in leads, data, and customer acquisition across the mortgage, insurance, and marketing industries.  He brings his considerable customer acquisition experience to iLeads.com during a pivotal time in the market.

                  “Throughout my career, I have delivered revenue increasing customer acquisition solutions for some of the largest mortgage lenders and publishers in online media,”  said Wilds.  “I am thrilled that I now have the opportunity to offer customer acquisition solutions fueled by real estate data…a completely unique solution in the market.”

                  In this role, Wilds oversees the company’s new business initiatives, supporting mortgage lenders, insurance companies, direct marketers, and real estate service providers with collaterally enhanced lead solutions. He is also driving new opportunities based on his relationships within the personal loan industry.

                  Prior to joining iLeads, Wilds delivered high impact results at Leadpoint where he managed the launch of a new personal loan solution. Working with partners and resellers, he took the lead solution from launch to exceptional growth. He further extended the company’s presence with lead solutions in the credit card vertical. 

                  “Throughout his career, Johnny has accelerated his client’s businesses through innovative customer acquisition solutions,” said CEO Drew Warmington. “Johnny’s background makes him a natural fit for iLeads.com, given his elite industry experience and keen understanding of how intent-based consumer leads and property, mortgage, and homeownership data are the key ingredients for reaching the right customers. He is a stellar addition to our team.”

                  About iLeads.com

                  iLeads.com combines intent-based consumer lead with property, mortgage, and homeownership data collected from multiple leading public record data providers to fuel customer acquisition data, tools, and insight analytics solutions. No other marketing, customer acquisition, or customer analytics provider provides today’s smart marketers with the depth and breadth of solutions empowered by the iLeads data set to reach 100% of U.S. homeowners.

                  Get Started

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                    Mortgage Rates Pop Higher as Lenders Guard Against Volatility

                     

                    iLeads Mortgage Market Minute

                    Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about Refis Lead The Way As Mortgage Applications Rise 1.7%. This week we’re bringing you:

                     

                    Beware of gloom and doom housing market headlines*

                    Here’s the data to watch to know when housing is in trouble

                    With Halloween in the rearview mirror, we still have one more spook to survive in 2020 – and no, I’m not talking about the upcoming election. I’m talking about housing market crash headlines.

                    The housing data has been wild this year. We’ve seen waterfall declines and parabolic rebounds. These dramatic peaks and valleys have fed the demons of greed and fear that infest the minds of our extreme housing bulls and housing market bears – leading to equally wild speculations about the future of U.S. housing.

                    With all these dramatic people espousing their housing market takes, how is a reasonable person to know what to believe?

                    Fortunately, there is a way to stay sane. Following some fundamental housing data trends will keep you on the straight and narrow path of reality and immunize you against the outlandish flights of fancy put forward by our extremist friends.

                    Take the Pending Home Sales Index, for example. In April of this year, pending home sales had its worst print of the 21st century.

                     

                    Read more in-depth here.

                     

                    Think Tank Concludes Mortgage Guidelines Could Safely be Twice as Risky*

                    The Urban Institute’s (UI’s) Housing Finance Policy Center has updated its credit availability index (HCAI) to reflect data for the second quarter of 2020. The Index shows a slight dip from an adjusted 5.3 percent in the first quarter to 5.2 percent in the second quarter. Tightening in the GSE and government channels has driven a retraction of credit availability through the first half of 2020, as the risk in the portfolio and private-label securitization market remains a shadow of what it once was.

                    The HCAI measures the percentage of owner-occupied home purchase loans that are likely to default-that is, go unpaid for more than 90 days past their due date. When the HCAI declines it indicates the lenders have a greater unwillingness to tolerate defaults and they are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates a higher tolerance for defaults and that lenders are taking more risks, making it easier to get a loan.

                    The agency market began to tighten at the end of Q1 2020 due to the COVID-19 crisis. This continued into Q2. Credit overlays have cut mortgage availability for borrowers with less than perfect credit while portfolio and private label lending have backed away from purchase originations and their market share has contracted significantly.

                     

                    2020 11 3first

                    Read more in-depth here.

                     

                    Home prices jump 6.7% in September, but are expected to moderate*

                    Prices in tourist-heavy Las Vegas and Miami expected to drop while the economy recovers

                    Despite home prices rising 6.7% year over year in September, CoreLogic’s Home Price Index Forecast (HPI) estimates home prices will moderate next year, increasing 0.2% nationally by September 2021 as higher prices erode affordability.

                    Home purchase demand managed to maintain pace through the summer, and now through the fall, as record-low mortgage rates continued to encourage new borrowers to enter the market. According to CoreLogic, it wasn’t just new home buyers, but homeowners looking to trade up or invest in a second home with rock-bottom rates who were driving the boom.

                    “Housing continues to be a bright spot during an otherwise challenging economic time for many U.S. households. Those in sectors that weathered the transition to remote work successfully are now able to take advantage of low mortgage rates to purchase a home for the first time or to trade up to a larger home,” said Frank Martell, president, and CEO of CoreLogic.

                    Data from the National Association of Realtors and U.S. Census Bureau shows that the national supply of homes for sale in September fell to the lowest level ever recorded. After months of severe shortages, upward pressure on home price appreciation had consumers battling it out for the limited supply, the report said.

                    “COVID has contributed to the acute shortage of inventory as the pace of new construction slowed and older prospective sellers postponed listing their homes until after the pandemic. Once the pandemic passes or a vaccine is widely administered, we should see a noticeable pick-up in for-sale homes. And if the economy’s recovery is sluggish next year, distressed sales may also add to market inventory,” said Frank Nothaft, chief economist for CoreLogic.

                    Read more in-depth here.

                     

                    2020 Home Loan Volume Expected to Top a Record-Breaking $4 Trillion*

                    Black Knight concurs with an earlier forecast from the Mortgage Bankers Association, that 2020 will have a higher level of mortgage originations in 2020 than was registered in 2019. Black Knight, in its new Mortgage Monitor covering September loan performance data, said its interpretation of recent rate lock information suggests that, for the first time ever, the market is on track to top $4 trillion in originations.

                    Rate lock activity in September was relatively even with that in August increasing a nominal 1 percent. Purchase locks were down 2 percent, typical for the season, while refinance locks were essentially unchanged. However, lock activity picked up in October, rising 4 percent through the first half of the month. Purchase locks were up 6 percent and refinancing locks rose 3 percent month-over-month.

                    2020 11 02refi

                     

                    Read more in-depth here.

                     

                    Mortgage Rates Pop Higher as Lenders Guard Against Volatility*

                    It’s no secret that there was a massive market reaction to the 2016 election. Even though markets don’t expect the range of potential outcomes to be nearly as wide this time, there’s no question that at least some fraction of the same amount of volatility is at stake in 2020. Mortgage lenders know this just as well as anyone. And they can defend against that volatility by raising rates.

                    Read more in-depth here.

                     

                    Finding highly affordable leads to keep sales coming in

                    At iLeads, we have many great solutions for mortgage LO’s at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

                    We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

                    You can also schedule a call here.

                    Get Started

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