2024 – Page 32

ICE First Look: Mortgage Performance Remains Strong as Delinquencies, Foreclosures Continue to Improve in May

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Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, reports the following “first look” at May 2024 month-end mortgage performance statistics derived from its loan-level database representing the majority of the national mortgage market. Data as of May 31, 2024 Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 3.04% Month-over-month change: -1.55% Year-over-year change: -1.94% Total U.S. foreclosure pre-sale inventory rate: 0.36% Month-over-month change: -3.83% Year-over-year change: -17.95% Total U.S. foreclosure starts: 24,000 Month-over-month change -6.47% Year-over-year change: -4.77% Monthly prepayment rate (SMM): 0.58% Month-over-month change: 10.45% Year-over-year change: 6.60% Foreclosure sales: 6,300 Month-over-month change: 6.26% Year-over-year change: – 7.21% Number of properties that are 30 or more days past due, but not in foreclosure: 1,634,000 Month-over-month change: -24,000 Year-over-year change: -5,000 Number of properties that are 90 or more days past due, but not in foreclosure: 410,000 Month-over-month change: -7,000 Year-over-year change: -38,000 Number of properties in foreclosure pre-sale inventory: 191,000 Month-over-month change: -7,000 Year-over-year change: -38,000 Number of properties that are 30 or more days past due or in foreclosure: 1,825,000 Month-over-month change: -31,000 Year-over-year change: -43,000 Top 5 States by Non-Current* Percentage Mississippi: 7.41% Louisiana: 7.25% Alabama: 5.19% Indiana: 4.77% West Virginia: 4.68% Bottom 5 States by Non-Current* Percentage California: 1.97% Idaho: 1.89% Montana: 1.87% Washington: 1.83% Colorado: 1.83% Top 5 States by 90+ Days Delinquent Percentage Mississippi: 1.93% Louisiana: 1.70% Alabama: 1.41% Arkansas: 1.19% Georgia: 1.09% Top 5 States by 12-Month Change in Non-Current* Percentage Vermont: -12.16% Alaska: -10.42% New York: -9.64% New Hampshire: -9.63% New Mexico: – 8.79% Bottom 5 States by 12-Month Change in Non-Current* Percentage Louisiana: 7.03% South Dakota: 4.45% Arizona: 2.28% Nebraska: 1.80% Arkansas: 1.48% *Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. The company will provide a more in-depth review of this data in its monthly Mortgage Monitor report, which includes an analysis of data supplemented by detailed charts and graphs that reflect trend and point-in-time observations. The Mortgage Monitor report will be available online at https://www.icemortgagetechnology.com/resources/data-reports by July 1, 2024. For more information about gaining access to ICE’s loan-level database, please send an email to Mortgage.Monitor@bkfs.com. Source: Intercontinental Exchange

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Forty-three percent of last year’s home buyers used a gift from family or friends to help with their down payment, the most since at least 2018 To comfortably afford a typical U.S. home, a home buyer making the median income needs to put down nearly $127,750, or 35.4%, a new Zillow® analysis shows. Five years ago, when mortgage rates were hovering just above 4% and the typical home was worth about 50% less, that home would have been affordable with no money down. That $127,750 down payment is what a household making the median income would need to put down when purchasing a typical U.S. home — valued at about $360,000 — so that the monthly mortgage payments take up no more than 30% of that household’s monthly income. The enormous gap between the down payment needed now and five years ago underscores how the pandemic fueled a scorching-hot housing market, and why the rise in mortgage rates in the time since has cooled the market. Stubbornly high mortgage rates have pushed both buyers and sellers to the sidelines. With so few homes for sale, competition is stiff among the remaining buyers. “Down payments have always been important, but even more so today. With so few available, buyers may have to wait even longer for the right home to hit the market, especially now that buyers can afford less. Mortgage rate movements during that time could make the difference between affording that home and not,” said Skylar Olsen, chief economist at Zillow. “Saving enough is a tall task without outside help — a gift from family or perhaps a stock windfall. To make the finances work, some folks are making a big move across the country, co-buying or buying a home with an extra room to rent out. Down payment assistance is another great resource that is too often overlooked.” To save up $127,750, it would take a household making the median income about 12 years (assuming its members save 10% of their income each month with a 4% annual return). It’s no wonder then that 43% of last year’s buyers used a gift from family or friends for at least part of their down payment, the highest share since at least 2018. There are still affordable pockets of the U.S. In 10 major metropolitan areas, the typical home is affordable to a median-income household with less than 20% down. Pittsburgh boasts the most affordable housing market. A median-income household there could afford the monthly payments on a typical home even with no money down. California is on the other end of the affordability spectrum. A median-income household in San Jose would need to put down more than $1.3 million to afford the mortgage payments on a typical home — that’s more than the typical home is worth in every other major market. In Los Angeles, a median-income household would need an 81.1% down payment ($780,203) to afford the typical home, the highest in the country. This helps explain why many California metros have seen population losses since 2020, as long-distance movers target areas with more affordable housing. For those who qualify, down payment assistance can amplify savings and help a buyer enter homeownership more quickly. In Minneapolis, for example, the average amount of down payment assistance available across the metro is just under $22,750, according to data from Down Payment Resource. A median-income buyer in Minneapolis without down payment assistance would need a 27% down payment to comfortably afford the typical home. With $22,750 in down payment assistance, they would need to put 21% down. “Homeownership is the primary source of net worth and generational wealth for most Americans, and declining affordability is making it harder for average earners to get their foot in the door of an entry-level home. Luckily, there are more than 2,373 down payment assistance programs nationwide with at least one program in every county and 10 or more programs available in 2,000 counties,” said Down Payment Resource Founder and CEO Rob Chrane. “In fact, down payment assistance providers have responded to the difficult housing market by increasing the number of programs offered and expanding inventory options with support for manufactured homes and owner-occupied multi-unit homes.” SOURCE Zillow

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Rise in Listings Likely Means Many Homeowners No Longer Willing to Delay Moving Affordability constraints continue to limit the number of buyers willing and able to make home purchases, even as listings of for-sale homes rise, according to the June 2024 commentary from the Fannie Mae (OTCQB: FNMA) Economic and Strategic Research (ESR) Group. As such, the ESR Group downgraded its total home sales forecast to 4.82 million in 2024, representing a modest 1.3 percent annual gain compared to the previously projected 2.8 percent. Home sales have remained weaker than expected despite the recent rise in listings, which may indicate that many homeowners are no longer willing to delay moving due to the so-called “lock-in effect” – perhaps in part due to a general upward recalibration in mortgage rate expectations by consumers following the historically low mortgage rates of the pandemic. While the number of homes available for sale remains tight by historical standards, the months’ supply of inventory is gradually increasing, a dynamic the ESR Group sees as consistent with a deceleration in home price growth. The ESR Group also downgraded its 2024 real gross domestic product (GDP) growth outlook to 1.6 percent on a Q4/Q4 basis due to downward revisions to Q1 2024 GDP data, as well as recent data showing slowing income and spending growth. While recent inflation prints have been encouraging, the ESR Group expects the Federal Reserve will likely need to see several consecutive cool reports to gain confidence that inflation is returning sustainably to its 2-percent target. Given ongoing resilience in nonfarm payroll growth and volatility in inflation readings, the ESR Group now believes the Fed will cut rates only once this year, in December, as opposed to the previously projected two rate cuts. “The economy appears to be slowing, and recent readings offer hope that inflation is cooling after progress on that front stalled in the first quarter – a trend that will likely need to be sustained for the Fed to feel comfortable cutting rates,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Additionally, the labor market is showing signs of a gradual slowdown, with the unemployment rate creeping up to 4 percent in the June report. Unfortunately, we’re still not forecasting a ramp-up in housing activity, which will require some combination of continued household income growth, a further slowing of home price appreciation, or a decline in mortgage rates to bring affordability within range of many waiting first-time and move-up homebuyers.” Visit the Economic & Strategic Research site at fanniemae.com to read the full June 2024 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary. To receive e-mail updates with other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here. SOURCE Fannie Mae

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Company Addresses False Narrative Concerning Revenue Management Software RealPage, a leading global provider of software and data analytics to the real estate industry, issued a statement to correct factual inaccuracies that have been reported related to its revenue management software and its impact on renters. Starting in October 2022, false and misleading claims about RealPage and its revenue management software have been reported to the media and in legal filings. These factual inaccuracies threaten to undermine the essential benefits RealPage’s solutions provide to both renters and housing providers. In fact, RealPage’s revenue management software contributes to a healthier and more efficient rental housing ecosystem. “The time is now to address a number of false claims about RealPage’s revenue management software, and how rental housing providers operate when setting rent prices,” said Dana Jones, RealPage CEO and President. “Housing affordability should be the real focus. RealPage is proud of the role our customers play in providing safe and affordable housing to millions of people. Despite the noise, we will continue to innovate with confidence and make sure our solutions continue to benefit residents and housing providers, alike.” Housing affordability is the real problem Housing affordability, including the lack of affordable rental housing, is a critically important national problem created by a host of complex economic and political forces, including: Setting the record straight Here are the facts about RealPage’s revenue management software solutions: RealPage revenue management software offers prospective residents and housing providers more options and flexibility in lease terms, aids compliance with Fair Housing laws, does not use any personal or demographic data to generate rent price recommendations, and helps ensure that prospective residents have access to the best pricing available to everyone. RealPage has developed a resource center to educate stakeholders on the facts. Read more here: https://www.realpagepublicpolicy.com Contacts Jennifer Bowcock, SVP Communications & Creative for RealPage, Inc.jennifer.bowcock@realpage.com / 408-768-8221

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The median U.S. home sale price hit a record high in May as demand continued to outpace supply, with the number of homes for sale roughly 25% below pre-pandemic levels Home sales fell 1.7% month over month in May on a seasonally adjusted basis and dropped 2.9% from a year earlier, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. There have been just two months in the past decade with fewer home sales: October 2023, when mortgage rates jumped to a 23-year high, and May 2020, when the onset of the pandemic brought the housing market to a halt and home sales to a record low. “Buyers today are facing many of the realities of a hot market even though few homes are changing hands,” said Redfin Senior Economist Elijah de la Campa. “Sales are sluggish because high homebuying costs are making both house hunters and prospective sellers skittish. And with so few homes for sale, buyers in some markets are getting into bidding wars, which is helping push home prices to record highs.” Sales may pick up later this year if mortgage rates slowly tick down as expected. May 2024 Highlights: United States May 2024 Month-over-month change Year-over-year change Median sale price $439,716 1.6% 5.1% Homes sold, seasonally adjusted 407,959 -1.7% -2.9% New listings, seasonally adjusted 527,785 0.3% 8.8% All homes for sale, seasonally adjusted (active listings) 1,634,420 0.4% 11.1% Months of supply 2.3 -0.1 0.4 Median days on market 32 -3 0 Share of for-sale homes with a price drop 19.2% 2.4 ppts 6 ppts Share of homes sold above final list price 35.0% 1.4 ppts -2.4 ppts Average sale-to-final-list-price ratio 99.9% 0.2 ppts -0.1 ppts Average 30-year fixed mortgage rate 7.06% 0.07 ppts 0.63 ppts Home Prices Hit Another Record High in May, and Mortgage Rates Kept Climbing The median home sale price rose 5.1% year over year in May to a record $439,716. The average 30-year-fixed mortgage rate hit 7.06%. That’s up from 6.99% one month earlier and 6.43% one year earlier, and is more than double the all-time low of 2.68% during the pandemic. Daily average mortgage rates did drop to their lowest level in about three months this week after the latest CPI report showed that inflation is continuing to cool. Even though homes are selling for more than ever before, many sellers are still having to lower their list prices after putting their homes on the market—one silver lining for buyers. Nearly One of Every Five Homes for Sale Faced a Price Cut Nearly one in five (19.2%) homes for sale in May had a price cut, up from 13.2% a year earlier and just shy of the 21.7% record high set in October 2022. Some sellers are reducing their prices because they listed their home for too much initially and it ended up sitting on the market. The typical home for sale in May spent 32 days on the market. While that’s comparable with a year earlier, it’s the highest level for any May since the start of the pandemic. Price drops are particularly common in areas where housing supply has been rising quickly, like Florida and Texas. In these areas, individual home sellers have been facing strong competition from homebuilders. The Housing Shortage Is Improving, But Remains Severe New listings rose 0.3% month over month in May on a seasonally adjusted basis and climbed 8.8% from a year earlier. Still, they were roughly 20% below pre-pandemic (May 2019) levels. That’s largely because many homeowners don’t want to sell, as they feel “locked in” by the low mortgage rate they scored during the pandemic. Active listings, or the total number of homes for sale, rose 0.4% month over month on a seasonally adjusted basis and jumped 11.1% from a year earlier—the largest annual gain since the start of 2023. Still, active listings were about 25% below pre-pandemic levels. While new listings represent the number of homes that were listed for sale during a given month, active listings represent the total number of homes that were for sale during a given month. That means that the latter metric includes homes that aren’t selling. One reason active listings have risen so much is that in some areas, homes are lingering on the market and getting stale. Active listings are also soaring along Florida’s southwest Gulf Coast. In North Port, they surged 51.1% year over year on an unadjusted basis—the largest increase in the nation. Next came Tampa (46%) and Cape Coral (45.1%). Those housing markets are cooling faster than anywhere else in the country amid a new-construction boom, intensifying natural disasters and soaring insurance costs, a separate Redfin report found. Meanwhile, many of the markets that are holding up best and seeing price increases—like Rochester, NY—are relatively affordable and have near-record-low supply. Metro-Level Highlights: May 2024 To view the full report, including charts, please visit: https://www.redfin.com/news/home-sales-fall-to-near-record-low