Guardian Residential Lending Industry News, July 18, 2019

Guardian Residential Lending Industry News, June 13-20, 2019
June 20, 2019
Guardian Residential Lending Industry News, July 25 – August 1, 2019
August 1, 2019
Show all

In the Know: A Roundup of This Week’s Local and National Real Estate Stories 

Vacation homes, VA loan limits, and more…

Fannie Mae lowers mortgage rate forecast and says home-price growth will accelerate (HW, July 16)

Mortgage giant predicts 30-year fixed rate will average 3.7% in 2019’s second half

Fannie Mae issued a new forecast that predicts the average U.S. rate for a 30-year fixed mortgage will be 3.7% in the second half of 2019, down from the 3.9% the mortgage financier called for a month ago. That compares to a 4.4% average rate in the first quarter and 4% in the second quarter.

Cheaper mortgage rates will cause a heat-up in home prices, according to the forecast. Last month, Fannie Mae said it expected home prices to grow 4.6% in 2019. In the new forecast, it called for a 5.4% increase.

READ MORE…

 

VA loan limits to be lifted in 2020 (HW, July 11)

VA says lender guidelines will be released ahead of January effective date

Last month, President Donald Trump signed a bill into law that allows the Department of Veterans Affairs to back loans that exceed the conforming loan limit.

The bill, H.R. 299, enables homebuyers using a VA loan to borrow above the 2019 limit of $484,350 for most counties, without any down payment.

READ MORE…

Everything You Need to Know About Housing – and Then Some (Mortgage Daily News, July 12)

The U.S. Census Bureau recently released a treasure trove of data, its 2018 report on Characteristics of New Housing.  The report, based on data collected by the Bureau’s Survey of Construction, covers a huge array of stats about new single-family housing on both a national and a regional basis.

Much, but not all of the information dates back to 1973 and is presented by way of a series of spreadsheets and is used by researchers, policymakers, builders, and the housing finance industry. The longitudinal data, which is somewhat limited, is useful in identifying trends, and the whole database is actually sort of fun – potentially an enormous time sink for housing info junkies.

The Bureau found there were 840,000 single-family homes completed in 2018. While this was the largest number since the end of the previous housing boom in 2007, it clearly shows why there is such concern over residential construction. There were only three years prior to the housing crisis when there were fewer completions, 1981 and 1982 when interest rates were in the high double digits, and 1991. There were also 345,000 multi-family units completed.

Less than one-quarter of the homes built were smaller than 1,800 square feet, with 60 percent ranging from 1,800 to 2,999 square feet.  Ninety percent had three bedrooms or more. While a lot has been written about builders seeking to cut costs using modular methods, 97 percent of the homes completed last year were site-built.

READ MORE…

 

Who buys a vacation home? (HW, July 11)

Buyers may be younger and less affluent than you think

You might think people who buy vacation homes are older, high-net-worth individuals, but a recent survey from Vacasa proves this is not necessarily the case.

In fact, a number of older Millennials and young Gen Xers are looking to buy vacations homes, drawn to their investment potential, with one quarter of prospective buyers in their 20s and 30s.

READ MORE…

This is the credit score you typically need to take out a mortgage (CNBC, July 15)

If you’re thinking about buying a house in the next few years, you might want to work on improving your credit score.

The Federal Reserve reports that 90% of U.S. mortgages taken out in the first quarter of 2019 were by home buyers with a score of at least 650, and 75% had a score higher than 700.

The median credit score for mortgages taken out this year sits at 759, the report found, and only 10% of mortgage borrowers had credit scores under 647.

FICO credit scores range from 300 to 850, and the national average is 704. Any score between 700 and 749 is typically deemed “good,” while scores from 650 to 700 are “fair.” Excellent scores are usually those over 750.

READ MORE…

How a 25-year-old used $40,000 in down-payment assistance to buy her first house in Atlanta (CNBC, July 13)

READ MORE…

Black Homeownership Drops to All-Time Low (Wall Street Journal, July 15)

The black homeownership rate has fallen 8.6 percentage points, according to census data

While Hispanic homeownership rate is on the rise, the black homeownership rate has fallen 8.6 percentage points since its peak in 2004, hitting its lowest level on record in the first quarter of this year, according to census data.

This divergence marks the first time in more than two decades that Hispanics and blacks, the two largest racial or ethnic minorities in the U.S., are no longer following the same path when it comes to owning homes.

Analysts say black communities have struggled to recover financially since the housing crisis, which has kept homeownership out of reach. A decadeslong legacy of housing segregation has also made many would-be black buyers wary of returning to the market after losing their homes.

READ MORE…

Did the mortgage business have a good second quarter? Big bank originations may tell the tale (HW, July 16)

Wells Fargo, JPMorgan Chase, Citigroup all did big mortgage business in Q2

Thanks in large part to interest rates that have fallen throughout much of the year, it appears that the mortgage business had quite a solid second quarter, at least at some of the nation’s largest lenders.

On Tuesday, Quicken Loans revealed that the second quarter of 2019 was its best quarter ever, but that’s not the only lender that saw originations rise.

Mortgage originations were also up at Wells Fargo, JPMorgan Chase, and Citigroup, each of which released their second quarter financial results this week.

READ MORE…

Hottest Hoods: Which neighborhoods had the most homes sold last quarter? (Portland Business Journal, July 16)

  1. Vancouver, WA (98682)
  2. Forest Heights, Cedar Mill / Bethany (97229)
  3. Foster Powell (97206)
  4. Beaverton / Aloha (97007)
  5. Oregon City / Happy Valley (97045)
  6. Tigard / Metzger (97223)
  7. Gresham (97080)
  8. Multnomah Village (97219)
  9. Tigard / King City (97224)
  10. Hillsboro (97123)
  11. Arbor Lodge / Kenton (97217)
  12. Camas, WA (98607)
  13. Battleground, WA (98604)
  14. Ridgefield, WA (98642)
  15. Lake Oswego (97035)

READ MORE…

Quarter of homeowners can’t define a HELOC (HW, July 16)

Nearly half plan to renovate, but most won’t use their home equity to finance it

Nearly half of homeowners say they have plans to renovate their home in the next two years, and a third of those intend to drop $50,000 to do it.

This is according to a recent survey from TD Bank, which polled more than 1,800 homeowners to examine trends in home equity usage.

Americans have an average of $113,000 in equity in their homes, TD Bank revealed, but most don’t have plans to tap it. Instead, the survey revealed that most homeowners plan to dip into their personal savings to finance renovations, with that option being the choice of 48% of respondents.

Using cash saved in a checking account was next at 34%, while borrowing funds through a HELOC was the preferred financing method for 24%. Taking out a personal loan came in last at 18%.

READ MORE…

Foreign purchases of American homes plunge 36% as Chinese buyers flee the market (CNBC, July 17)

  • The dollar volume of homes purchased by foreigners from April 2018 through March 2019 dropped 36% from the previous year, according to the National Association of Realtors.
  • Foreigners bought 183,100 properties with a total value of about $77.9 billion, down from 266,800 properties valued at $121 billion a year earlier.
  • “The magnitude of the decline is quite striking, implying less confidence in owning a property in the U.S.,” the Realtors’ chief economist says.

READ MORE

Median home price climbs to all-time high (HW, July 18)

The median price of single-family homes in the U.S. has climbed to a record high, reaching $266,000 in the second quarter.

That’s up 10.8% from the previous quarter and up 6.4% from a year ago, according to the latest report from ATTOM Data Solutions.

READ MORE…

Just For Fun

You can soon book a night in the Oscar Mayer Weinermobile (Curbed, July 18)

READ MORE…

Thanks for reading!