Where is mortgage money going to come from?

David Goldsmith

All Powerful Moderator
Staff member
There was a great commercial during the 2016 election that showed a group of Chinese in a conference room speaking in Chinese laughing about "owning" the United States. All I can say is that I am glad a speak enough Chinese to be able to get a job in the next phase as a domestic worker for our potential overlords.
Evergrande’s Real Lesson: The Party Runs China’s Markets
The ongoing implosion of Evergrande, China’s second-largest property developer with reportedly over $300 billion in liabilities, has rocked markets this week. This is happening within the backdrop of a weakening property sector as seen in China Beige Book’s quarterly survey of over 4,000 companies operating in the country. The presumed feedback loop between the two has led to much, loud conjecture that we could be approaching China’s “Lehman moment.”
 

David Goldsmith

All Powerful Moderator
Staff member

Mortgage market is unprepared for climate risk, says industry report​


Record-setting rain, floods and wildfires are examples of the rising risks to the U.S. housing market from climate change.
Mortgage lenders and investors are woefully unprepared not only to mitigate their risk but to even gauge that risk, according to a new report from the Mortgage Bankers Association's Research Institute for Housing America.


In addition, the National Flood Insurance Program is in the midst of a major overhaul, which will change pricing for homeowners. That will affect home values and consequently the values of the mortgages that back those homes.
The biggest problem right now is uncertainty for mortgage stakeholders.
"They're wondering what to do next more than anything else. There haven't been any rule changes that affect the firms in the mortgage market, but they're being contemplated," said Becketti.

A climate foreclosure crisis?​

Today, the mortgage market relies heavily on the insurance industry to gauge its risk.
But most mortgage industry risk models are focused on credit and operating risk.
"In the case of modeling for risk, the mortgage industry still predominantly thinks of protection in terms of property and casualty risk, which is underwritten and priced by insurance companies," said Sanjiv Das, CEO of Caliber Home Loans. "The industry doesn't model climate risk as much and mostly relies on models from FEMA or insurance companies."
But the Federal Emergency Management Agency is already highly stressed due to the record volume of natural disasters in the past few years. If FEMA changes what it will back, mortgage lenders could be on the hook for losses.
In addition, borrowers displaced by natural disasters could default on their home loans.
Following Hurricane Harvey in Houston in 2017, mortgage industry leaders warned of a potential climate foreclosure crisis as the storm flooded close to 100,000 Houston-area homes. In Harvey's federally declared disaster areas, 80% of the homes had no flood insurance because they weren't normally prone to flooding. Serious mortgage delinquencies on damaged homes jumped more than 200%, according to CoreLogic.
The costs of estimated defaults are the centerpiece for banks, lenders, investors and mortgage servicers to assess profitability, as well as loan loss reserves and economic capital.
"If incremental defaults due to climate change turn out to be material for one or more of these stakeholders, regulators and investors are likely to require those stakeholders to quantify the impact of those incremental defaults and to gauge the sensitivity of those estimates to key assumptions," Becketti said in the report.

Finally, mortgage bond investors, who are already asking for more information from lenders about climate risk, could also pull back, leaving the mortgage market with less liquidity.
This week, the Securities and Exchange Commission published a letter it has sent to public companies asking them to offer more information to investors about their climate risk. The letter details physical and financial risks from climate disasters, as well as risks from climate-related changes to regulations or business models. While it doesn't name the specific companies receiving it, the banking industry is a likely recipient.
The question is, how do we best measure such risk? While there is now a new cottage industry of companies measuring all facets of climate risk to corporate America, as well as the housing market, there is no standard risk measurement for investors.
"Investors have built sophisticated risk models for default and severity but are novices when analyzing acts of God," said Bill Dallas, president of Finance of America Mortgage.
"Today investors avoid these potential risks by simply not buying loans. As fires, hurricanes, earthquakes, volcanic eruptions, and torrential floods become more commonplace, investors will have to act more as actuarial insurers than mortgage lenders in order to build risk models that contemplate acts of God," he added.
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David Goldsmith

All Powerful Moderator
Staff member
www.wsj.com/amp/articles/mortgage-payments-havent-been-this-unaffordable-since-2008-116332534018-

Mortgage Payments Haven’t Been This Unaffordable Since 2008​

Record growth in home prices is erasing savings typically delivered by low interest rates​

Record growth in home prices has made owning a home less affordable than at any point since the financial crisis.

The median American household would need 32.1% of its income to cover mortgage payments on a median-priced home, according to the Federal Reserve Bank of Atlanta. That is the most since November 2008, when the same outlays would eat up 34.2% of income.

Supercharged home prices in markets across the country are canceling out the impact of modestly higher incomes and historically low interest rates, two factors that typically make owning a home more affordable. Prices rose at a record pace for the fourth consecutive month in July, driven by a shortage of houses for sale. Higher prices require buyers to take out larger loans, essentially signing them up to make larger mortgage payments each month for years.
 

David Goldsmith

All Powerful Moderator
Staff member
After the Dot Com bubble burst, Alan Greenspan was testifying before Congress. Someone asked if this would cause the economy to tank since Greenspan had been touting the Wealth Effect as the reason things were so rosey. Greenspan's answer was that their research had shown that people weren't cashing in stocks to make purchases, but rather they were tapping the increased equity in their houses with cash-out refinances. In my mind that's the biggest reason the GFC turned into a foreclosure avalanche after not that big an initial price correction - it didn't take all that much to put a lot of people under water after they had all raised the high water mark.


After all the talk of "that could never happen again" we have seen decreased down payments (Rocket Mortgage has the average at 6%), easing of underwriting standards (automated/drive-by appraisals, lower credit scores/non-prime loans, low doc mortgages) and now this:


Americans Cashing Out Home Equity After Record Gains In Value


Americans have started cashing out some of the record amount of home equity they gained as property values surged during the pandemic.


Cash-out refinancings, meaning new loans that resulted in a lump-sum payout to the homeowner, were up 33% in October compared to a year earlier, according to data released Monday by Black Knight Inc.
#property #mortgage
 

David Goldsmith

All Powerful Moderator
Staff member
Wow, $1 million conforming loans!

Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1 Million as Prices Soar​

Scheduled increase in loan limits is a boon for borrowers but also stokes debate over government’s role in housing market​

WASHINGTON—The federal government is about to back mortgages of nearly $1 million for the first time.

The maximum size of home-mortgage loans eligible for backing by Fannie Mae and Freddie Mac are expected to jump sharply in 2022, a reflection of the rapid appreciation in home prices nationally over the past year.

The increase may make it easier and cheaper for some borrowers to buy a home, particularly in more expensive areas of the country, but the higher limits are also likely to elevate debate about how big of a mortgage is too big to be backed by the government.
“Housing prices are expensive,” said Steve Walsh, president of Scout Mortgage in Scottsdale, Ariz., adding that some of his clients are unable to qualify for loans for modest-sized homes under the current limits.
“I don’t believe these people are looking for a castle, just a three-bedroom house with a backyard,” Mr. Walsh said.

Currently, the government-controlled mortgage companies can back single-family mortgages that have balances as high as $548,250 in most parts of the country and up to $822,375 in expensive housing markets, including parts of California and New York.

Those limits are expected to jump to a baseline level of about $650,000 in most jurisdictions and to just under $1 million in high-cost markets.

In all, about 100 counties out of more than 3,000 counties across the U.S. are designated as high-cost markets, according to the Federal Housing Finance Agency.

The precise loan limits are set to be announced Nov. 30 by the agency, which oversees the two mortgage giants, and the new limits will go into effect in January. Mortgages within the limits are called conforming loans; mortgages that exceed them are called jumbo mortgages, which tend to be more expensive for borrowers to obtain and generally have larger down payments for comparable borrowers.

Mortgage bankers and real-estate agents say the new limits should keep pace with the double-digit rise in home prices. Low mortgage-interest rates and buyers looking for more space during the pandemic has helped fuel the housing price surge in recent months, along with a significant shortage of new homes.

Nationwide, the median single-family, existing-home sales price rose 16% in the third quarter to $363,700 from a year before, a record in data going back to 1968, the National Association of Realtors said Nov. 10.

But some housing experts say the expected jump in loan limits raises questions about the appropriate role of the government in housing and whether taxpayers should effectively backstop sky-high housing prices, when Fannie and Freddie’s market share is already rising.

Fannie and Freddie, which guarantee about half of the $11 trillion mortgage market, don’t make loans. They instead buy them from lenders and package them into securities that are sold to investors.
 

David Goldsmith

All Powerful Moderator
Staff member
AFAIK there is over $5 billion in mortgage delinquency in NY State. The has been a foreclosure moratorium, lots of forebearance, loan restructuring, etc so itight be hard to gauge exactly where we are. But it would seem the newly announced assistance program is going to fall far short of the current delinquency amounts.

NY homeowners behind on mortgages get $539M from feds​

Foreclosure-prevention funding is just 9% of New Yorkers’ estimated delinquency​

Mick Jagger sang, “You can’t always get what you want, but if you try sometimes, you get what you need.” On foreclosure aid, however, Gov. Kathy Hochul got what she wanted, not what New York needed.
New York on Thursday became the first state in the nation to receive U.S. Treasury approval for Homeowner Assistance Fund aid. Nearly $539 million — the amount Gov. Kathy Hochul requested — will be distributed to homeowners at the greatest risk of foreclosure or displacement. The money is part of a $10 billion federal program in the American Rescue Plan.

However, the funding will cover only about 9 percent of New Yorkers’ delinquent payments. Homeowners statewide have run up about $5.85 billion in mortgage arrears since the start of the pandemic.
The governor announced the funding award a week after pulling the plug on New York’s portal for emergency rental assistance, shutting out potentially hundreds of thousands of landlords and tenants because rent aid was running out.

The state has earmarked virtually all of the $2.4 billion in available funding to applicants and has requested another $996 million from the Treasury Department.
Hochul this week announced $25 million would go to organizations providing legal help to low-income tenants facing eviction. However, the funding will only cover about one in 11 cases outside of New York City, which has a more robust legal services program in place.

A statewide foreclosure moratorium, along with an eviction moratorium, is in place, but is due to expire Jan. 15.
“As we focus on our post-pandemic economic recovery, we need to do everything in our power to help New Yorkers stay in their homes,” Hochul said in a statement.
Hochul’s office plans to unveil a statewide outreach campaign to provide information to at-risk homeowners so they are ready to apply as soon as the application window opens. Distressed homeowners have received less attention than tenants during the pandemic, as rising home values have made it possible for many to refinance their mortgages.
 

David Goldsmith

All Powerful Moderator
Staff member

Mortgage Lending Declines At Unusually Fast Pace Across U.S. During Third Quarter Of 2021​


Historical Mortgage Origination Chart

Overall Loan Activity Down 8 Percent, Marking Second Straight Quarterly Decrease; Mortgage Lending Down in Both Second and Third Quarters for First Time This Century; Refinance Mortgages Drop 13 Percent Quarterly, Purchase Loans Off 2 Percent
IRVINE, Calif. – Dec. 2, 2021 — ATTOM, curator of the nation’s premier property database, today released its third-quarter 2021 U.S. Residential Property Mortgage Origination Report, which shows that 3.59 million mortgages secured by residential property (1 to 4 units) were originated in the third quarter of 2021 in the United States. That figure was up 3 percent from the third quarter of 2020, but down 8 percent from the second quarter of 2021 – the largest quarterly dip in over a year.
The quarterly decline also was the second in a row and pointed to two unusual patterns developing in the lending industry. It marked the first time in more than two years that total lending decreased in two consecutive quarters. More notably, it was the first time in any year since at least 2000 that lending activity declined in both the second and third quarters, which usually are peak buying seasons.
That pattern emerged amid declines in both refinance and purchase lending which more than made up for a bump up in home-equity lines of credit.
Overall, with average interest rates remaining below 3 percent for 30-year home loans, lenders issued $1.15 trillion worth of mortgages in the third quarter of 2021. That was up annually by 11 percent, but down quarterly by 6 percent. The quarterly decrease in the dollar volume of loans was the first since the early part of 2020.
On the refinance side, 1.99 million home loans were rolled over into new mortgages during the third quarter of 2021, a figure that was down 13 percent from the second quarter and down 3 percent from a year earlier. The total number of refinance mortgages has declined for the second straight quarter, while the quarterly decrease was the largest in three years. The dollar volume of refinance loans was down 10 percent from the second quarter of 2021, to $624.1 billion, although still up annually by 1 percent.
Refinance mortgages remained a majority of all residential lending activity during the third quarter of 2021. But that portion dipped to 55 percent, down from 59 percent in both the second quarter of 2021 and the third quarter of 2021.
The number of purchase loans also declined in the third quarter of 2021 as lenders issued 1.36 million mortgages to buyers. That was down 2 percent quarterly, although still up annually by 17 percent. The dollar value of loans taken out to buy property dipped to $482.6 billion, down 1 percent from the second quarter of this year but still up 30 percent from the third quarter of 2020.
Home-equity lending, meanwhile, rose for the second straight quarter, which last happened in mid-2019. The tally of home-equity lines of credit, while down annually by 9 percent, rose 2 percent between the second and third quarters of 2021, to about 238,500.
The continued dip in total loan activity during the third quarter represented a growing sign that the nation’s appetite for new home loans is easing – and that the nation’s decade-long housing market boom could even be cooling off.
The latest trends have reversed patterns seen from early 2019 through early 2021, when total lending activity nearly tripled amid various forces that pushed a frenzy of refinancing and purchasing. That surge came as interest rates dropped to historic lows and the Coronavirus pandemic which hit early last year spurred a rush of home buying among households looking for larger spaces and the perceived safety offered by a house and yard. That spike in buying has driven home prices to record highs.
“The overflow stack of work that was hitting lenders for several years shrank again in the third quarter across the U.S. amid a few emerging trends,” said Todd Teta, chief product officer at ATTOM. “It looks more and more like homeowner’s voracious appetites for refinance deals has eased notably, while purchase lending also dipped. It’s still too early to say if the trends point to major shifts in lending patterns or the broader housing market boom. But the drop-off is significant, especially for home buying, which could suggest an impending housing market slowdown. We will be watching the lending trends extra closely in the coming months.”
Total mortgages drop for second straight quarter in a pattern not seen this century
Banks and other lenders issued 3,591,794 residential mortgages in the third quarter of 2021. That was down 8.4 percent from 3,922,248 in second quarter of 2021, although still up 3.2 percent from 3,479,655 in the third quarter of 2020. The quarterly decrease was the second in a row, which had not happened since a period running from late 2018 into early 2019. It also stood out as the first time since at least 2000 that total lending activity went down from both the first to the second quarter and from the second to the third quarter of any year.
The $1.15 trillion dollar volume of all loans in the third quarter remained up 10.7 percent from $1.04 trillion a year earlier, but was down 6 percent from $1.23 trillion in the second quarter of 2021.
Overall lending activity decreased from the second quarter of 2021 to the third quarter of 2021 in 186, or 86 percent, of the 216 metropolitan statistical areas around the country with a population greater than 200,000 and at least 1,000 total loans in the third quarter. Total lending activity was down at least 5 percent in 126 metros (58 percent). The largest quarterly decreases were in Pittsburgh, PA (down 52.3 percent); Charleston, SC (down 48.2 percent); Myrtle Beach, SC (down 46.8 percent); Provo, UT (down 39.5 percent) and Peoria, IL (down 33.9 percent).
Aside from Pittsburgh, metro areas with a population of least 1 million that had the biggest decreases in total loans from the second quarter to the third quarter of 2021 were Buffalo, NY (down 29.8 percent); Baltimore, MD (down 20.9 percent); New Orleans, LA (down 20.4 percent) and Atlanta, GA (down 17.5 percent).
Metro areas with the biggest increases in the total number of mortgages from the second to the third quarter of 2021 were Ann Arbor, MI (up 122.7 percent); Des Moines, IA (up 70.5 percent); Sioux Falls, SD (up 51.5 percent); Yakima, WA (up 31.4 percent) and Dayton, OH (up 30.6 percent).
The only metro areas with a population of at least 1 million and an increase in total mortgages from the second quarter to the third quarter of 2021 were Jacksonville, FL (up 5.5 percent); Memphis, TN (up 4.3 percent) and Columbus, OH (up 2.7 percent).
Refinance mortgage originations down 13 percent from second quarter
Lenders issued 1,993,407 residential refinance mortgages in the third quarter of 2021, down 13.4 percent from 2,301,654 in second quarter of 2021 and down 2.9 percent from 2,053,918 in the third quarter of last year. The total was down for the second straight quarter, which had not happened since late 2018 into early 2019, while the latest decrease was the largest since the first quarter of 2018. The $624.1 billion dollar volume of refinance packages in the third quarter of 2021 was down 10.1 percent from $694.3 billion in the prior quarter, while it remained up 1.4 percent from $615.6 billion in the third quarter of 2020.
Refinancing activity decreased from the second quarter of 2021 to the third quarter of 2021 in 199, or 92 percent, of the 216 metropolitan statistical areas around the country with enough data to analyze. Activity dropped at least 10 percent in 121 metro areas (56 percent). The largest quarterly decreases were in Pittsburgh, PA (down 61.5 percent); Myrtle Beach, SC (down 54.7 percent); Charleston, SC (down 49.9 percent); Tuscaloosa, AL (down 48.8 percent) and Buffalo, NY (down 47.5 percent).
Aside from Pittsburgh and Buffalo, metro areas with a population of least 1 million that had the biggest decreases in refinance activity from the second to the third quarter of 2021 were Rochester, NY (down 28.2 percent); Baltimore, MD (down 26.8 percent) and New York, NY (down 25.8 percent).
Counter to the national trend, metro areas with the biggest increases in refinancing loans from the second quarter of 2021 to the third quarter of 2021 were Ann Arbor, MI (up 128.8 percent); Des Moines, IA (up 91.3 percent); Sioux Falls, SD (up 36.6 percent); Dayton, OH (up 13.4 percent) and Yakima, WA (up 9.9 percent).
The only metro area with a population of at least 1 million where refinance mortgages increased from the second to the third quarter of 2021 was Jacksonville, FL (up 5.9 percent).
Refinance lending still represents at least 50 percent of all loans in two-thirds of metros
Refinance mortgages accounted for at least 50 percent of all loans in 151 (70 percent) of the 216 metro areas with sufficient data in the third quarter of 2021. But that was down from 83 percent in the second quarter of 2021 and 80 percent a year earlier. By the end of the third quarter, refinance mortgages took up a smaller portion of all loans issued in 174 (81 percent) of the metros analyzed.
Metro areas with a population of at least 1 million where refinance loans represented the largest portion of all mortgages in the third quarter of 2021 were Atlanta, GA (72.2 of all mortgages); Detroit, MI (66.9 percent); Kansas City, MO (63.2 percent); New Orleans, LA (62.2 percent) and New York, NY (62.1 percent).
Metro areas with a population of at least 1 million where refinance loans represented the smallest portion of all mortgages in the third quarter of 2021 were Rochester, NY (40.9 percent of all mortgages); Oklahoma City, OK (43.2 percent); Pittsburgh, PA (48.1 percent); Miami, FL (48.2 percent) and Cleveland, OH (48.6 percent).
Purchase originations decrease 2 percent in third quarter
Lenders originated 1,359,888 purchase mortgages in the third quarter of 2021. That was down 2 percent from 1,387,307 in the second quarter, although still up 16.8 percent from 1,163,790 in the third quarter of last year. The $482.6 billion dollar volume of purchase loans in the third quarter was down 0.7 percent from $486 billion in the prior quarter, but remained up 29.9 percent from $371.6 billion a year earlier.
Residential purchase-mortgage originations decreased from the second to the third quarter of 2021 in 111 of the 216 metro areas in the report (51 percent). The largest quarterly decreases were in Jackson, MS (down 57.1 percent); Charleston, SC (down 43.8 percent); Provo, UT (down 43.6 percent); Pittsburgh, PA (down 42.2 percent) and Myrtle Beach, SC (down 38.4 percent).
Aside from Pittsburgh, metro areas with a population of at least 1 million and the biggest quarterly decreases in purchase originations in the third quarter of 2021 were New Orleans, LA (down 21.4 percent); Atlanta, GA (down 18 percent); Austin, TX, (down 16.9 percent) and San Jose, CA (down 15.7 percent).
Residential purchase-mortgage lending increased from the second quarter of 2021 to the third quarter of 2021 in 105 of the 216 metro areas in the report (49 percent). The largest increases were in Tuscaloosa, AL (up 553.7 percent); Ann Arbor, MI (up 120.6 percent); Yakima, WA (up 66.2 percent); Dayton, OH (up 63.3 percent) and Sioux Falls, SC (up 61.7 percent).
Metro areas with a population of at least 1 million and the largest increases in purchase originations from the second to the third quarter of 2021 were Rochester, NY (up 50.4 percent); Buffalo, NY (up 37.4 percent); Philadelphia, PA (up 25.2 percent); Columbus, OH (up 24.5 percent) and Detroit, MI (up 20.1 percent).
Metro areas with a population of at least 1 million where purchase loans represented the largest portion of all mortgages in the third quarter of 2021 were Oklahoma City, OK (51.9 percent of all mortgages); Miami, FL (46.7 percent); Las Vegas, NV (45 percent); Virginia Beach, VA (43.7 percent) and San Antonio, TX (41.9 percent).
Metro areas with a population of at least 1 million where purchase loans represented the smallest portion of all mortgages in the third quarter of 2021 were Detroit, MI (25.8 percent of all mortgages); Salt Lake City, UT (26.9 percent); Atlanta, GA (27.4 percent); Kansas City, MO (29.2 percent) and Boston, MA (30.1 percent).
HELOC lending up for second straight quarter
A total of 238,499 home-equity lines of credit (HELOCs) were originated on residential properties in the third quarter of 2021, up 2.2 from 233,287 during the prior quarter, but still down 9 percent from 261,947 in the third quarter of 2020. HELOC activity rose for the second straight quarter – the first time that happened since the middle of 2019. The $46 billion third-quarter volume of HELOC loans, though, was still down 0.8 percent from the second quarter and down 15 percent from the third quarter of 2020.
HELOC mortgage originations increased from the second to the third quarter of 2021 in 60 percent of metro areas analyzed for this report. The largest increases in metro areas with a population of at least 1 million were in Jacksonville, FL (up 45.6 percent); San Diego, CA (up 25.4 percent); Houston, TX (up 24.7 percent); Riverside, CA (up 23.1 percent) and Tucson, AZ (up 22.2 percent).
The biggest quarterly decreases in HELOCs among metro areas with a population of at least 1 million were in Atlanta, GA (down 58.9 percent); Buffalo, NY (down 30.9 percent); Pittsburgh, PA (down 29.9 percent); Hartford, CT (down 29.3 percent) and New Orleans, LA (down 19.5 percent).
FHA and VA loan shares inch down
Mortgages backed by the Federal Housing Administration (FHA) accounted for 336,483, or 9.4 percent of all residential property loans originated in the third quarter of 2021. That was down slightly from 9.6 percent in the second quarter of 2020. It also was down from 10.5 percent in the third quarter of 2020.
Residential loans backed by the U.S. Department of Veterans Affairs (VA) accounted for 229,456, or 6.4 percent, of all residential property loans originated in the third quarter of 2021, down from 6.9 percent in the previous quarter and 8.8 percent a year earlier.
Median down payments and loan amounts rise again
The national median down payment, the amount borrowed and the ratio of down payments to median home prices during the third quarter of 2021 again hit the highest levels since at least 2005.
The median down payment on single-family homes purchased with financing in the third quarter of 2021 stood at $27,500, up 5.8 percent from $26,000 in the previous quarter and up 41 percent from $19,502 in the third quarter of 2020.
The median down payment of $27,500 represented 8 percent of the nationwide median sales price for homes purchased with financing during the third quarter of 2021, up from 7.8 percent in the previous quarter and 6.5 percent a year earlier.
Among homes purchased in the third quarter of 2021, the median loan amount was $295,954. That was up 2.8 percent from the prior quarter and up 13 percent from the same period last year.
Report methodology
ATTOM analyzed recorded mortgage and deed of trust data for single-family homes, condos, town homes and multi-family properties of two to four units for this report. Each recorded mortgage or deed of trust was counted as a separate loan origination. Dollar volume was calculated by multiplying the total number of loan originations by the average loan amount for those loan originations.
 

David Goldsmith

All Powerful Moderator
Staff member


In 2021, more money was borrowed to buy homes than ever before​

Mortgages lenders handed out over $1.6T in loans last year​

Charge it! More money was borrowed to buy homes by Americans in 2021 than ever before.
The Wall Street Journal is reporting that mortgage lenders handed out more than $1.6 trillion in loans in 2021, beating the record of $1.15 trillion set in 2005, and topping the $1.5 trillion lent in 2020.

The paper says the boom is reflective of the flourishing housing market along with the uptick in prices during the last year, driven by low interest rates and the inclination for bigger homes. On top of that, the strong labor market and increases in pay across a number of industries — private-sector worker pay grew 4.6 percent, according to the Bureau of Labor Statistics — helped pad savings accounts, pushing potential buyers into the market.

“Buying a home is really a statement of confidence in your job situation, your financial situation, your family situation,” Mike Fratantoni, chief economist at the MBA, told the paper.
The price of homes rose 19.1 percent in the year, and the sales of existing homes were predicted to hit their highest level since 2006, according to the publication.

Younger buyers also pushed the market upwards, with millennials seeking 67 percent of first-time mortgage applications between January and August of 2021, according to the publication.
But while new buyers were hopping on the home train, refinances were slowing — down to $2.3 trillion in 2021 from $2.6 trillion in 2020.

Fixed rates for 30-year mortgages are still hovering at a very low 3 percent, and economists aren’t expecting rate increases to dissuade potential buyers. But the uptick in prices is making it difficult for some to become homeowners.
In October, it took 33 percent of income to cover a mortgage payment on a median-priced home, according to the paper, up from 29 percent earlier in the year — making it the most expensive time to take on a mortgage relative to income since 2008.
 

David Goldsmith

All Powerful Moderator
Staff member
First week of January 2021 30 Year mortgage rates hit an all time low of 2.65%. Last week they spiked to 3.45%. Another 50 points and they will be up 50% off the low. Another 185 points and they will be double. While I agree with those who say a full 1% increase off the bottom won't tank the Real Estate market, I'm pretty sure double would. The only question is where in between is the tipping point.
 
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