The next wave of servicing regulation is coming – Are you ready?

Join this webinar to learn what servicers need to know about recent and upcoming servicing compliance regulations and strategies experts are implementing to prepare for servicing regulatory audits.

In a purchase market, rookie LOs may struggle

Rookie LOs in 2020 could ride the refi wave and rack up a hefty monthly paycheck without Herculean effort. But these days, they'll have to sing for their supper.

Logan Mohtashami on trends in forbearance exits

In this episode of HousingWire Daily, Logan Mohtashami discusses several hot topics in the housing market, including recent trends in forbearance exits and future homebuyer demand in the midst of inventory shortages.

Natural disasters and forbearance: What borrowers and mortgage servicers need to know

With a rise in natural disasters, including wildfires, hurricanes, floods, tornadoes and mudslides. The mortgage industry needs to be proactive in examining programs to help borrowers recover.

MortgageReal Estate

The housing market is losing steam

66,000 new home sales in June, down from 68,000 sales in May

Mortgage applications for new home purchases in June decreased 3% from May and 23.8% year over year, suggesting a slowdown in the housing market, according to a recent report from the Mortgage Bankers Association.

New single-family home sales were reported at a seasonally adjusted annual rate of 704,000 units in June, a decrease of 5% from May’s pace of 741,000. The MBA estimates there were 66,000 new home sales in June, down from 68,000 such sales in May.

Overall sales of new homes are still down 7% from last year, according to Joel Kan, MBA associate vice president of economic and industry forecasting.

“Last year was the strongest year in the housing market for new home sales in over a decade,” he said. “Right now, homebuilders are encountering stronger headwinds, as severe price increases for key building materials, rising regulatory costs, and labor shortages impact their ability to raise production. This has dampened new home sales and quickened home-price growth.”

Mark Palim, deputy chief economist at Fannie Mae, said anecdotal reports of builders delaying or turning down orders to clear a growing construction backlog appears to be borne out by the recent housing starts data.


Keep Up With the Latest Third Party Origination News

Want to stay up to date with the latest on the third party origination front? We designed a specific news hub with lenders and brokers in mind, with Rocket Pro TPO leading the discussion.

Presented by: Rocket Pro TPO

“The month’s increase in single-family starts coincided with a slowdown in single-family permits, which fell 6.3 percent,” Palim said Tuesday. “While this data tends to be noisy on a month-to-month basis, the divergence between starts and permits is consistent with builders struggling to keep up with orders, as is the tick up in homes authorized but not yet started. With lumber prices recently pulling back, we expect some near-term strength in construction. However, June’s starts gain was somewhat smaller than we had anticipated while the fall in permits was greater. Therefore, a modest downward revision to our near-term forecast is likely.”

Homes for sale are still being snatched up quickly throughout the country, but a recent slowdown in bidding wars may signal some buyer fatigue in the housing market. Redfin reported recently that 65% of home offers written by company agents in June faced competition, down from a rate of 72.1% in May and a peak of 74.1% in April. New listings are also up 4% year over year, meaning more properties are hitting the housing market for buyers to bid on.

In 2018-2019, total housing market inventory was in the range between 1.52 million and 1.92 million, and that level of inventory helped to drive real home-price growth in 2019 into negative territory briefly. Existing home sales during those years stayed in the monthly sale range of 4.98 million to 5.61 million homes, according to the National Association of Realtors.

Then the COVID-19 pandemic hit, and after eight months of consecutive gains spanning 2020 and 2021, the consequences of low home inventory finally caught up with the housing market in February 2021.

Conventional mortgage loans composed 74.4% of loan applications in June, while FHA loans composed 14%. RHS/USDA loans composed 1% and VA loans composed 10.6%. The average loan size of new homes increased from $384,323 in May to $392,370 in June.

“Still-low levels of for-sale inventory are also pushing prices higher as competition for available units remains high among prospective buyers,” Kan said. “In addition to price increases, we are also seeing fewer purchase transactions in the lower price tiers as more of these potential buyers are being priced out of the market, further exerting upward pressure on loan balances.”

Leave a comment

Most Popular Articles

These are the hottest housing markets in America

A housing market report from RE/MAX found that 36 of 51 metro areas had double-digit year over year sale price increases in August. Boise led the way.

Sep 17, 2021 By

Latest Articles

Radian expands its online title insurance platform

Radian Group recently announced the launching of its title insurance and closing services platform, titlegenius, in Arizona, California, Nevada, Ohio and Pennsylvania

Sep 20, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please