True Stories: Hybrid, eNote and RON Implementation

Join expert panelists that will discuss the status of federal legislation, trends in digital adoption and how best to prepare your organization for the next generation of lending processes.

Spruce’s Patrick Burns on innovation in title technology

In the season finale of Housing News season 5, Spruce CEO discusses heightened investor interest in title tech, innovation and fintech adoption.

Top CFPB official “hates” QM rules, jeopardizing safe harbor

A top CFPB official in charge of the rule-making process has heavily criticized the agency's own qualifying mortgage rule, jeopardizing safe harbor.

Don’t sleep on non-QM products

Now is the perfect time for originators to consider expanding to non-QM products – to grow business, diversify their offerings and to ensure an opportunity to better serve their customers.

Politics & MoneyReal EstateMortgage

We need higher mortgage rates to cool the housing market

Housing 2021 isn't the housing bubble of 2005

The years 2020-2024 will have the best housing market demographics ever recorded in U.S. history, with the lowest mortgage rates recorded in history. When you have these two titans acting in unison, it can potentially accelerate real home prices in an unhealthy way. 

In 2020, the year of COVID-19, existing home sales ended at a respectable 5,640,000. That is roughly only 130,000 higher than the levels we saw in 2017. But sales should have ended the year more in the range of 5,710,000-5,840,000 if we stayed true to the trend line we had established by February 2020, before the COVID crash. We were and still are playing catch up to the lost demand during the COVID-19 shutdown period.

Purchase applications give a right direction trend 30-90 days ahead, and they are now averaging 12.8% year-over-year growth from last year. This is a tad better than I expected. 

So far this year, the weekly Mortgage Bankers Association purchase application data compared to last year looks like this: +3%; +10%; +15%; +16%; +16%; +17%. That is still growing a bit better than the peak rate of growth I was looking for at 11% before March 18 arrived, and all economic data went haywire crazy on year-over-year comps.

The last existing home sales print came in at 6,760,000; we are about to get another report this coming Friday. We are not trending at this sales level today, and I expect sales to moderate more toward the 6.2 million level or lower. However, my fear for the years 2020-2024 is that the built-in demographic demand would cause real home prices to grow too fast. We are seeing the early stages of this take hold.

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