Guardian Residential Lending Industry News, February 6-13, 2020

Guardian Residential Lending Industry News, January 30 – February 6, 2020
February 6, 2020
Guardian Residential Lending Industry News, February 13-20, 2020
February 20, 2020
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In the Know: A Roundup of This Week’s Local and National Real Estate Stories 

Mortgage rates hit 3-year low; Homebuying season started early this year…

Low mortgage rates offsetting home affordability issues, NAR says (HW, Feb. 12)

NAR’s home affordability index shows first-time buyers now have enough income for entry-level purchase

An index measuring home affordability for first-time buyers rose to 107.3 from 96.3 a year earlier. A reading of 100 means the household median income is exactly enough to buy the median-price starter home. A broader index that measures the overall market, not just entry-level buyers, rose to 162.9 from 145.7 a year earlier.

Americans trying to buy homes have been challenged with a shortage of available properties and prices that have increased at a faster pace than incomes. Cheaper financing lowers their monthly payments, making it easier to purchase properties.

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Homebuying season definitely started early this year (HW, Feb. 12)

The Refinance Index climbs to the highest level since 2013

Typically, spring homebuying season starts in earnest as the calendar ticks toward March, but homebuyers are seemingly getting an earlier start this year, perhaps driven into the market by low mortgage rates.

Now, a new report from the Mortgage Bankers Association shows that spring homebuying season officially began in January this year.

According to the MBA, January 2020 was the strongest January for purchase mortgage applications in 11 years.

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U.S. Household Debt Exceeds $14 Trillion for the First Time (Bloomberg, Feb. 11)

Americans increased their borrowing for the 22nd straight quarter as more households took out loans to buy homes or refinance existing mortgages, according to a report released today from the Federal Reserve Bank of New York.

Mortgage borrowing rose by $120 billion to $9.56 trillion. The rate for a 30-year mortgage has fallen by about 100 basis points over the past year, adding to home purchasers’ buying power. For example, a $500,000, 30-year loan costs about $300 less per month.

“Mortgage originations, including refinances, increased significantly in the final quarter of 2019,” Wilbert Van Der Klaauw, vice president at the New York Fed, said in a statement.

Mortgage loans for young adults age 18 to 29 rose to the highest level since the third quarter of 2007. Originations for 30-year-olds rose to $210.1 billion last quarter — the highest level since the end of 2005.

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Boom: Mortgage lending just had its biggest quarter in 14 years (HW, Feb. 11)

Originations climb to highest level since 2005

According to the New York Fed, there were more than $750 billion in new mortgages originated in the last three months of 2019, more than in any quarter since the fourth quarter of 2005.

It’s a stark reversal from the first quarter of 2019, when there were only $344 billion in mortgage originations.

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The economy added 225,000 jobs in January, showing continued strength (Washington Post, Feb. 7)

The U.S. economy added 225,000 jobs in January, a surprising sign of continued strength for the economy.

The unemployment rate ticked up slightly to 3.6 percent, mostly due to more people rejoining the labor force. The jobless rate remains near a 50-year low.

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U.S. inventory of homes for sale reaches record low (HW, Feb. 7)

Supply shortage is choking the housing market and driving up prices

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10 facts you must know from mortgage industry’s first major summit of 2020 (HW, Feb. 10)

Didn’t make it to MBA’s Independent Mortgage Bankers Conference? We’ve got you covered.

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Home-Price Appreciation Averaged 3.6% in 2019 (CoreLogic, Feb. 4)

CoreLogic reported that home prices rose 4% annually in December 2019 and are expected to increase 5.2% over the next year. December’s home-price gain was down from the December 2018 increase of 4.4%, but up from November’s 3.5% gain.

Price appreciation averaged 3.6% for 2019, which is a considerable drop from 2018’s average of 5.8%. CoreLogic projects average growth for 2020 to be 4.6%.

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Just for Fun

A Day with LA’s Top Real Estate Agent (CNBC)

Aaron Kirman knows how to close a deal: He’s sold about $6 billion worth of real estate over his 25-year career, making him the No. 1 agent in Los Angeles and among the top in the country. He routinely sells multimillion-dollar properties, including one estate for a whopping $65 million, and on his new CNBC show, “Listing Impossible,” he helps stubborn homeowners sell their luxury real estate.

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The Portland mansion Beverly Cleary called haunted is for sale at $5 million (The Oregonian, Feb. 13)

As the Pittock Mansion was rising on a northwest bluff overlooking the young city of Portland in 1914, across the Willamette River, on Northeast Portland’s Alameda Ridge, another self-made millionaire, Frank Barnes, was completing his trophy home.

As famous as the Pittock Mansion is, however, the Barnes Mansion has earned notoriety as a landmark in literary icon Beverly Cleary’s beloved Ramona Quimby children’s books.

Cleary, who grew up near the Barnes Mansion, knew it when the four-level structure had fallen on hard times. She wrote that the house, on the Klickitat Street she made famous, was haunted.

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