Category: Industry News

MBA: Housing shortage boosts demand for new home purchases

The demand from consumers who are looking to buy an existing home is spilling over into new home purchases, according to a new report from the Mortgage Bankers Association.

The MBA’s latest Builder Applications Survey tracks the current homebuilder trends across the country. Here’s what the association expects to see moving into the second half of the year.

The latest survey reported that for July, which sits toward the end of the spring and fall home-buying rush, mortgage applications for new home purchases increased 5.1% compared to July 2016.

On a monthly basis, applications decreased by 12% from June. This change does not include any adjustment for typical seasonal patterns.

While the drop is expected for the month, the uptick from last year shows an increase from the typical July demand.

Read the source article at U.S. Housing Finance News

Senate to consider bill to end “FICO monopoly” at Fannie Mae and Freddie Mac

Earlier this year, a bipartisan group reintroduced a bill in the House of Representatives that would allow Fannie Mae and Freddie Mac to consider alternative credit-scoring models beyond the FICO credit score the government-sponsored enterprises currently use. Now, a companion bill is being introduced in the Senate as well, with the backing of Senators from both parties.

The Senate version of the “Credit Score Competition Act” is sponsored by Sens. Tim Scott, R-South Carolina, and Mark Warner, D-Virginia.

In a joint statement, Scott and Warner say that the bill will help make credit available to ” some of the 26 million ‘credit invisible’ individuals in the housing market.”

Read the source article at U.S. Housing Finance News

Will the home appraisal industry be replaced by technology?

Automation haunts many discussions about the future of work, employment, and the economy. But technological advances may soon hit homes in an unexpected way: could real estate appraisers be replaced by robots?

That’s the conclusion of a recent article in Bloomberg, which discusses how advances in big data and computing are helping automate this knowledge-based job, perhaps a harbinger of how advances in machine learning mean an ever-widening circle of professions are at risk.

The future of the profession has become a topic due to a recent decision by Fannie Mae and Freddie Mac, two institutions that facilitate the flow of funding for home loans nationwide. In the past, both of these entities have occasionally allowed appraisal waivers when evaluating low-cost loans. But recently, they’ve changed their stance, starting up a program earlier this year that would waive the new appraisal requirement for homes where the loan-to-value ratio is low. Instead, they’ll accept any appraisals on file from the last five years. In June, Freddie Mac said it would start accepting automated valuations for some refinancing loans.

 

Read the source article at Curbed

Zillow: Median Home Value at New High

The national median home value has reached $200,400, a 7.5 percent increase from last year. Zillow attributed this new peak to a higher buyer demand and a shrinking housing inventory. In some markets, year-over-year gains have been in double-digit figures: Seattle’s home values are up 13 percent year-over-year to a median home value of $447,100, while home values in Dallas and Las Vegas are up 10.5 and 10 percent, respectively.

Read the source article at National Mortgage Professional Magazine

Average FICO score reaches 700 for first time ever

The average FICO score reached an all-time high, hitting 700 for the first time ever. And scores are expected to continue climbing even as mortgage lenders prepare to ease credit standards over the next few months.

Average credit scores bottomed out at 686 during the housing crisis after a sharp increase in foreclosures, FICO vice president for scores and analytics Ethan Dornhelm explained, according to an article by Jessica Dickler for CNBC. FICO scores range from 300 to 850.

A new report from the Urban Institute showed the average FICO score for originations dropped in April as lenders eased lending standards for refinances. For purchases, however, the standards remained tight.

Read the source article at U.S. Housing Finance News

CFPB finalizes updates to TRID

After much anticipation, the CFPB officially released the finalized updates to the Know Before You Owe mortgage disclosure rule, also known as the TILA-RESPA Integrated Disclosure rule. The newly amended rule finally answers industry calls for greater clarity and certainty. But it’s not over. The CFPB also announced a follow-up proposal, seeking information on closing disclosures. 

Read the source article at U.S. Housing Finance News

Less Than One-Third of Millennials Are Homeowners

Less than one-third of Millennials are homeowners, but the homeownership rates among this youthful demographic are significantly lower in expensive coastal cities and pricey college towns, according to a new data analysis from ABODO.
On a national level, 32.1 percent of Millennials are homeowners—back in 2005, the number was 39.5 percent—but those numbers vary among markets. Among the metro areas with higher-than-average Millennial homeownership rates are Ogden–Clearfield, Utah, where 51 percent of Millennials own homes, followed by the Grand Rapids, Mich., metro area (45.3 percent), Des Moines-West Des Moines, Iowa (43.6 percent), the McAllen, Texas, metro (43.3 percent) and Minneapolis-St. Paul (42 percent). ABODO noted that all of these markets are small to-midsize cities in the Midwest, South, and Southwest.
However, Millennial homeownership rates are much smaller in major coastal markets: California’s Los Angeles–Long Beach–Anaheim has a 17.8 percent Millennial homeownership rate, the lowest in the country. Other low percentages are in Urban Honolulu (18.3 percent), California’s San Diego–Carlsbad corridor and the New York–Newark–Jersey City metro area, both at a 19.8 percent level.

Read the source article at National Mortgage Professional Magazine

Renters now setting their sights on homeownership

A recent study from TransUnion showed American renters are increasingly setting their sights on homeownership. The number of renters shopping for a home increased from last year and from 2015.

The study showed 55% of those who shopped for a mortgage in the first quarter of 2017 were non-homeowners, most of whom were renters. This is a significant increase from the first quarter of 2016 when that number was 50% and from the first quarter of 2016 when it sat at 45%.

“The rental market has seen sustained growth for the last several years, but occupancy rates have flattened from their peak in the second quarter of 2016,” said Mike Doherty, senior vice president of TransUnion’s rental screening solutions group.

Millennial interest in homeownership has been steadily growing, the TransUnion study showed. In 2017, 29% of non-homeowners who shopped for mortgages were Millennials. This is up slightly from 28% in 2016 and 27% in 2015.

Read the source article at U.S. Housing Finance News