Tendayi Kapfidze is the chief economist at LendingTree. He oversees the company’s analysis of the U.S. economy with a focus on housing and mortgage market trends. Tendayi utilizes data analysis to be a resource for both consumers and trade media, providing impactful and actionable insights to help consumers make informed financial decisions.
[Op-ed] Our data shows that housing unicorns follow start-up unicorns, with the tech-unicorn haven of San Jose, California, leading the pack, with a jaw-dropping 53.81% of homes exceeding the million-dollar mark. In fact, it’s the only area where the median home value also exceeds $1 million.
[Expert Commentary] Loan officers continue to struggle with greater competition to secure borrowers, but the contest is not all the same across the country. Some markets are more concentrated than others at the lender level and could present tougher challenges.
[Expert commentary] As the spring selling market heats up, buyers continue to face increasing odds against finding their dream homes. Inventory is low, demand is high and rates have been steadily creeping upwards for months. These factors are only complicating what can already be an arduous experience for would-be homebuyers hoping to get approved for a mortgage. In a new study analyzing more than 10 million mortgage application records, LendingTree found nearly one out of every 10 mortgage applicants, or 8%, is denied at the national level.
More competition is the theme for 2018 and LendingTree has created a way for loan officers to gauge the aggregate level of price competition in the market in real time. Released weekly, LendingTree's Mortgage Rate Competition Index measures the spread in the APR of the best offers available on LendingTree relative to the least competitive.
Most quoted industry rates are for a hypothetical borrower with prime credit who makes a 20% down payment. Yet, most borrowers do not fit this profile and often experience disappointment when the rate on their loan turns out to be meaningfully higher than what they believed prevailing rates to be. Many loan officers have likely experienced having to explain this discrepancy to borrowers with varying degrees of success.
With the recent turnover in leadership at the Federal Housing Finance Agency, we may be standing at the precipice of great change in the government’s role in supporting the mortgage market through Fannie Mae and Freddie Mac.