Guardian Residential Lending Industry News, April 22-29, 2021

Guardian Residential Lending Industry News, April 15-22, 2021
April 22, 2021
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In the Know: A Roundup of This Week’s Local and National Real Estate Stories


Home sale prices reach record highs — again (HW, April 27)

Redfin report shows it’s not COVID that is keeping people from listing their homes

The effects of low housing inventory continue to cause significant ripples in the housing market, as a recent Redfin report shows home sale prices across the country have reached an average of $344,625 — an all-time high, and an 18% increase year over year.

That’s well above the average home sale prices in Redfin’s March report, at the time a record high of $331,590. But the current prices aren’t deterring homebuyers.

In looking at more than 400 metros, Redfin found that homes sold during a four-week period ending April 18 were on the market for a median of 21 days, the shortest time on market since 2012. That’s also 16 days fewer than the same period in 2020. And 45% of homes sold for more than their list price, another an all-time high.



Biden’s $15K first-time homebuyer tax credit now a bill (HW, April 26)

Rep. Earl Blumenauer introduces bill targeting low- and middle-income earners

United States Rep. Earl Blumenauer (D-OR) and Rep. Jimmy Panetta (D-CA) today introduced the new legislation, dubbed the “First-Time Homebuyer Act.” The bill would provide a tax credit for first-time homebuyers of up to 10% of the purchase price, or $15,000.

In order to be eligible for the full credit, potential buyers must not have owned or purchased a home within the past three years.

The program would be targeted to low- and middle-income earners. Participants must also make no more than 160% of the area median income, and the home’s purchase price must be no more than 110% of the area median purchase price. Borrowers could claim the credit for primary residences purchased after Dec. 31, 2020.

Borrowers would need to use the home as a primary residence for at least four years, or face taxes to recover a portion of the credit.



Fed holds interest rates near zero, sees faster growth and higher inflation (CNBC, April 28)

The Federal Reserve on Wednesday kept its easy money policy in place despite an economy that it acknowledged is accelerating.

As expected, the U.S. central bank decided to keep short-term interest rates anchored near zero as it buys at least $120 billion of bonds each month. The latter part of policy is a two-pronged effort to support an economy that grew strongly to start 2021 as well as to support market functioning at a time when 30-year mortgages still go for around 3%.

Despite noting the economic strength as well as inflation that is on the rise, if just temporarily, the policymaking Federal Open Market Committee unanimously decided to make no changes in its approach and gave no indications that things will change anytime soon.



FHFA releases new refi option for low-income borrowers (HW, April 28)

Agency will also waive adverse market fee for borrowers with loan balances at or below $300,000

Under the new refi option, lenders must ensure that the borrower saves at least $50 a month in their mortgage payments while simultaneously dropping their interest rate by at least 50 basis points. This could potentially knock an already historically great rate such as 3.5% down to 3% with the new product.



Hottest ‘Hoods Q1 2021: Multnomah County’s top 26 ZIP codes for real estate activity (PBJ, April 22)

The pandemic and civil unrest of the last year certainly hasn’t dampened enthusiasm for the heart of the Rose City as buyers seemed to put on their rose-colored glasses.

Multnomah County accounted for a solid third of the home sales in the first quarter and had the second-highest average median sale price (behind Clackamas) at $504,595. Homes did sell significantly slower than the other counties though, at 11 average median days on the market. In Washington County they sold in half the time.


The Spring Market is MIA (Mortgage News Daily, April 22)

Existing home sales declined for the second straight month in March. The National Association of Realtors said single-family homes, townhomes, condos, and cooperative apartments sold at a seasonally adjusted annual rate during the month of 6.01 million units. This is down 3.7 percent from February’s sales pace, but still marks an increase of 12.3 percent from the March 2020 rate of 5.35 million. The two-month downturn has reduced the annual sales rate by more than 600,000 units since January.


$1.67 Trillion in Purchase Originations Forecast for 2021 (M Report, April 26)

The Mortgage Bankers Association (MBA) has forecast that purchase originations are on track to grow 16.4% to a new record of $1.67 trillion.

After last year’s record $3.83 trillion in mortgage originations, MBA forecasts volume to fall 14% this year to $3.28 trillion, which would still be the third-highest total ever.

Mortgage rates are expected to continue rising to around 3.7%, contributing to a further slowdown in refinance demand. Refinance originations are expected to fall by 33% to $1.62 trillion.


Purchase market is poised to topple refi’s reign in 2021 (HW, April 23)

“I think the operative word right now is we’re in a period of transition.”

While 2021 likely won’t approach the record breaking tizzy of 2020, the housing market will continue to flourish on the strength of the purchase market, according to economists at the Mortgage Bankers Association.

After last year’s record $3.83 trillion in mortgage originations, the MBA forecasts volume to fall 14% this year to $3.28 trillion, which would still be the third-highest total on record.

At the trade organization’s spring conference on Wednesday, the MBA’s trio of economists noted that mortgage rates are expected to continue rising to around 3.7%, contributing to a further slowdown in refinance demand. However, where refis falter, purchases pick up steam.

Mortgage rates are still lower than they were a year ago, MBA chief economist Mike Fratantoni said, and while they will likely get high enough to create a flip in the amount of borrowers refinancing versus purchasing, they won’t reach a peak that would be harmful to purchase originations.


New homes are selling like it’s 2006 again (HW, April 23)

Low rates help consumer demand overcome rising lumber prices

Low mortgage rates and incredible buyer demand won out over pressure from soaring lumber prices in March as single-family new home sales rose 20.7% from February to a 1.02 million seasonally adjusted annual rate, according to the Department of Housing and Urban Development and the U.S. Census Bureau. This is the fastest sales pace since September 2006.

With so many buyers snatching up new homes at the ready, inventory fell to 3.6 months of supply, with just 307,000 new single-family homes for sale, 44.6% lower than March 2020.

“This is the best new home sales report in 10 years,” said Logan Mohtashami, HousingWire’s lead analyst. “We’ve essentially got a trifecta – so headline number is great, revised numbers are great, but monthly supply is below 4.3 months. These are all benefits of a very solid report. As long as mortgage rates stay low the builders are going to be fine.”


6 Home Upgrades Buyers Want in the COVID-19 Era (, April 20)

We talked with experts to learn which home improvements will hit the right note with buyers beyond the pandemic.

  1. Upgrade your outdoor space.
  2. Create a functional home office or classroom.
  3. Add a separation of space.
  4. Add space for a home gym.
  5. Give your in-law suite a makeover.
  6. Spruce up the laundry room.


Thanks for reading.