Top markets for affordable renovated housing inventory

Despite the rapidly deteriorating affordability, there is some hope for homebuyers in the form of renovated homes: properties that have been rehabbed into move-in ready condition after being purchased at auction.

HousingWire Magazine: December 2021/ January 2022

AS WE ENTER A NEW YEAR, let’s look at some of the events that we can look forward to in 2022. But what about what’s next for the housing industry?

Mortgage Tech Virtual Demo Day

Tune in to our live Virtual Demo Day on December 1st at 10am CT to experience demos from the most innovative tech companies in the Servicing, Audit and Post-Close space.

Logan Mohtashami on Omicron and pending home sales

In this episode of HousingWire Daily, Logan Mohtashami discusses how the new COVID variant, Omicron, will impact inflation and whether or not it will send mortgage rates lower.

Mortgage

Mortgage rates slip back down to 2.96%

But how long will mortgage rates stagnation last?

Mortgage rates fell again last week, dropping three basis points to an average of 2.96%, according to Thursday data from Freddie Mac‘s PMMS. Rates have now managed to stay within a five basis point range above or below 3% for nearly two months.

Higher mortgage rates historically have signaled a strengthened economy. But this is no ordinary economy: an apprehensive bond market has been keeping a close eye on global macroeconomic trends and Fed policy changes. Such factors have contributed to stagnating mortgage rates around the 3% mark.

“The economy is recovering remarkably fast and as pandemic restrictions continue to lift, economic growth will remain strong over the coming months,” said Sam Khater, Freddie Mac’s Chief Economist. “Despite the stronger economy, the housing market is experiencing a slowdown in purchase application activity due to modestly higher mortgage rates.”

However, Khater noted, it has yet to translate into lower home prices. A shortage of inventory will likely be a problem for years.

May data from Fannie Mae‘s Home Purchase Sentiment Index revealed homebuyers are feeling awfully discouraged by the housing market these days. The HPSI reported that just 35% of consumers believe now is a good time to buy a home, down from 47% in April. And those who believe it is a bad time to be a homebuyer increased to 56% from 48%.


How transforming mortgage custody could drive liquidity

HousingWire recently spoke with Aditya Udas, managing director at Iron Mountain, about the potential for digital transformation of mortgage custodial duties and how Iron Mountain is innovating collateral management. 

Presented by: Iron Mountain

According to that same survey, mortgage rate expectations differed in May for prospective homebuyers and sellers with survey respondents torn between whether mortgage rates will go up or stay the same. Just 6% remained hopeful they will slide back down.

“Life for the builders has been good with mortgage rates at 3%,” said Logan Mohtashami, HousingWire’s lead analyst. “When mortgage rates go over 4%, life might not look so cheery. We know this because the last time mortgage rates hit 5%, we had a supply spike, and the builders’ stock felt this being down more than 25% from their recent peaks.”

He added: “We are far from those levels today, but this is something to keep in mind when housing market conditions change.”

According to Mohtashami, 2020 through 2021 saw the median sales price for new homes stay in check because builders provided some smaller homes into the sales mix, feeding the frenzy just enough while interest rates are low.

“It remains to be seen how this housing market will be affected by rising mortgage rates after the run-up in the median sales price,” Mohtashami said.

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