Mortgage Market Update (6/17/24)

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • It’s been a volatile week for rates as they are now slightly lower than where they were a week ago.
  • A strong BLS Jobs Report earlier in the month moved rates higher before last week’s CPI report brought them back down.
  • Last Thursday’s Producer Price Index helped rates move even lower as inflation measured from the perspective of manufacturers came in much lower than expected.


Consumer Price Index (CPI)

  • The May CPI report showed that overall inflation was flat at 0% month-over-month (expected 0.1%) and decreased year-over-year from 3.4% to 3.3%.
  • May brought cooler than expected consumer inflation, due in large part to easing motor vehicle insurance costs.
  • This follows better than expected readings in April as the annual Headline and Core readings both took important steps lower.


The Fed Meeting

  • The Fed’s fourth meeting of the year concluded last Wednesday and left their Fed Funds Rate unchanged once again.
  • An updated dot plot showed that the median forecast for the rest of the year would be one rate cut.
  • Fed Chair Jerome Powell acknowledged that their policy is restrictive but needs to see more progress on inflation lowering.
  1. RATES DROP AFTER CPI DATA – Lower inflation numbers help bring rates back down after last week’s spike from the BLS jobs data.
    https://www.mortgagenewsdaily.com/…
  2. WHOLESALE PRICES COME DOWN – The Producer Price Index (PPI), a gauge of prices that producers get for their goods and services, declined 0.2% for the month.
    https://www.cnbc.com/…
  3. MORTGAGE APPLICATIONS RISE IN MAY – New-home purchase mortgage applications rose 1% month-over-month in May according to the Mortgage Bankers Association (MBA).
    https://www.housingwire.com/…
  4. VA NOW ALLOWING BUYER-PAID BROKER FEES – Veterans using VA home loan benefits will have the ability to pay the buyer-broker fee beginning August 10, 2024.
    https://news.va.gov/…

Mortgage Market Update (6/3/24)

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • Mortgage rates moved higher in the early half of last week, but have since moved back down.
  • April’s Personal Consumption Expenditures (PCE) report was released last Friday, which showed inflation slightly below expectations and helped rates move lower.
  • Today’s weaker manufacturing data further supported the decrease in rates and we essentially back to where we were for rates about a week ago.

Personal Consumptions Expenditure

  • The Fed’s favored inflation measure, Core PCE, rose 0.2% from March to April, coming in slightly below estimates.
  • On an annual basis, Core PCE remained at 2.8% for the 12 months ending in April.
  • While this is well below 2022’s 5.6% peak, progress toward the Fed’s 2% inflation target remains stalled.

All-Time High for Home Values

  • Two of the most notable home price indices, Case-Shiller and FHFA, show that home values continue to rise on a year-over-year basis in their most recent reports for the end of March 2024.
  • Case-Shiller reports that home prices rose 6.5% year-over-year while FHFA reported a year-over-year gain of 6.6%.
  • Strong demand and tight supply will continue to push home values higher and help homeowners build wealth through equity.
  1. ERASING LAST WEEK’S SPIKE – Lower inflation and weaker manufacturing data helped rates return back to where they were about a week ago.
    https://www.mortgagenewsdaily.com/…
  2. MOST HOMES FOR SALE SINCE JULY 2020 – Recent data shows that active inventory and new listings are up significantly year-over-year.
    https://www.calculatedriskblog.com/…
  3. TURNING CAUTIOUS ON SPENDING – Consumers and businesses are slowing down on the rate of purchases made according to banking data.
    https://www.cnbc.com/…
  4. CFPB REVIEWING JUNK FEES – The Consumer Financial Protection Bureau (CFPB) is assessing how “junk fees” directly impact the health of consumers.
    https://www.housingwire.com/…

Mortgage Market Update (5/20/24)

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • Mortgage rates have been on a consistent downward trend the last two weeks due to weakening economic data from reports such as the BLS Jobs Report, CPI, and Retail Sales.
  • With the weaker data, the financial markets are now expecting two rate cuts from the Fed this year.
  • The next market moving data will likely be the Personal Consumption Expenditures (PCE) report at the end of the month, which is the Fed’s favorite measure of inflation.

Consumer Price Index (CPI)

  • The Consumer Price Index continues to be the biggest source of momentum for mortgage rates as it measures inflation.
  • The April report released today showed overall inflation rose 0.3% for the month versus the expected 0.4%, while year-over-year inflation decreased from 3.4% to 3.5%.
  • Much of the core rate, which excludes food and energy, is coming from motor vehicle insurance (+22.6% YoY) and shelter (+5.7% YoY).

New Home Construction

  • Housing starts rebounded in April, rising 5.7% from March.
  • Building permits, which represent future construction, declined.
  • Completions did rise in April, but the numbers were a bit softer than expected and could limit much-needed supply down the road.
  1. RATES ON A DOWNWARD TREND – Mortgage rates have consistently moved lower the last two weeks after multiple reports showing weakness in the economy.
    https://www.mortgagenewsdaily.com/…
  2. INFLATION EASES IN APRIL – Today’s CPI report showed inflation in line with expectations and the lowest 12-month core reading since April 2021.
    https://www.cnbc.com/…
  3. UNLOCKING MORE HOME EQUITY – Freddie Mac, one of the US’s government-sponsored enterprises, is proposing that it be allowed begin purchasing home equity loans which would help unlock equity for homeowners.
    https://www.businessinsider.com/…
  4. INVESTMENT FROM HUD – The US Department of Housing and Urban Development (HUD) announced it has secured approval for $1.1 billion in funding to help with tribal housing and community development.
    https://www.housingwire.com/…

Homeseed’s 2024 Mortgage & Real Estate Spring Update

Welcome to Homeseed’s 2024 Spring Market Update! We are in the thick of the spring market and  there have been many promising shifts in the real estate and mortgage markets recently. Whether you’re a seasoned homeowner or a hopeful buyer, the current market presents ample opportunities worth exploring. Let’s delve into the latest trends shaping the spring market and what they mean for you.

Mortgage Rate Outlook

The trajectory of mortgage rates has been a focal point for many, and recent developments shed light on what lies ahead. Since the outset of the year, rates have shown an upward trend, influenced by factors such as inflation dynamics and the strength of the labor market. While initial projections hinted at multiple rate cuts by the Fed in 2024, the latest forecasts suggest a more conservative approach, with one potential cut on the horizon. Fed Chair Jerome Powell’s reaffirmation of a probable cut underscores the Fed’s commitment to stabilizing inflation. However, the timing of this adjustment hinges on forthcoming economic indicators.

Inventory Is Increasing

Recent data on inventory signals a welcomed uptick in available homes especially when compared this time a year ago. This surge in inventory translates into a plethora of choices for both homeowners seeking upgrades and prospective buyers eyeing entry-level properties. For first-time buyers particularly, increased options alleviate some of the affordability concerns exacerbated by fluctuating mortgage rates. Simultaneously, current homeowners looking to sell find themselves in a favorable position, with heightened demand and an array of properties to explore.

Home Values Are Expected to Continue Appreciating

The continued increase in the value of homes underscores the allure of owning a home as an investment. Unlike renting, homeownership offers the dual benefits of shelter and equity accumulation. As the housing market continues its upward trajectory, homeowners stand to bolster their financial portfolios through accrued equity. Projections from the Home Price Expectations Survey paint a promising picture of sustained growth in home values over the coming years. This steady appreciation not only solidifies homeowners’ positions but also presents a compelling case for prospective buyers weighing their options. By capitalizing on the potential for long-term wealth accumulation, homeowners can leverage their equity to unlock new avenues of financial stability.

Opportunities in the Spring Market

The spring market offers a wealth of opportunities for both homeowners and homebuyers alike. With mortgage rates poised for potential adjustments later this year, it is estimated that 5 million buyers will enter the market for every 1% drop in mortgage rates. Coupled with the expanding inventory landscape, now is the time to stay informed and consider strategic financial decisions. Whether you’re looking to upgrade your current home or embark on the journey of homeownership, reach out today and lets discuss the opportunities for you this spring.

Mortgage Market Update (5/6/24)

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • After surging higher in early April, mortgage rates have moved lower in the last week.
  • Mortgage rates trended lower week-over-week after the Fed’s announcement of tapering their balance sheet reduction and a weaker BLS Jobs Report.
  • The financial markets now expect just one rate cut this year due to the persistence of elevated inflation.

The Fed Meeting

  • The Fed wrapped up its third of eight annual meetings yesterday that followed with its usual press conference.
  • The financial markets tune in to the press conference where Fed Chair, Jerome Powell, acknowledged that elevated inflation meant a delay for the Fed’s next move with rates.
  • The good news was Powell reiterated that the next move is more likely to be a cut rather than a hike as the Fed believes they are still on track to return inflation back to their 2% target.

BLS Jobs Report

  • April’s job growth missed estimates, as there were 175K new jobs created versus the 243K that were expected.
  • Revisions to the data for February and March also shaved 22K jobs from those months combined while the unemployment rate rose to 3.9%. 
  • Overall, the data suggests softening in the labor sector, which could pressure the Fed to cut rates if this trend continues. 
  1. RATES MOVE LOWER AFTER FED MEETING – Positive momentum following the Fed meeting continue for a second day after Fed acknowledges next move will likely be a rate cut.
    https://www.mortgagenewsdaily.com/…
  2. ACTIVE INVENTORY IS UP – Report shows that active inventory and new listings are up on both a year-over-year and week-over-week basis.
    https://www.calculatedriskblog.com/…
  3. FED MEETING HIGHLIGHTS – The Fed keeps rates unchanged as it notes lack of further progress on inflation, but did acknowledge its next move would likely be a cut later in the year.
    https://www.cnbc.com/…
  4. FHFA’S EQUITABLE HOUSING PLANS – FHFA announced their finalized plans to address barriers to sustainable housing opportunities for first-time and low-and-moderate income buyers.
    https://www.housingwire.com/…

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Mortgage Market Update (4/22/24)

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • Mortgage rates are flat but volatile week-over-week after surging much higher the week prior.
  • The pressure for higher rates was caused by a strong jobs report, more troubling inflation data, and a higher consumer spending.
  • The odds for the first rate cut by the Fed’s July meeting has now fallen below 50%.


Consumer Price Index (CPI)

  • The monthly report showed inflation was much hotter than expected in March, continuing a trend we’ve seen in recent months.
  • Rising energy, automobile insurance, and shelter costs were the main contributors to the increase in inflation.
  • Annual inflation still remains below the peaks in 2022, but stubbornly high inflation readings will likely delay the Fed’s timing for rate cuts this year.


Home Builder Sentiment

  • The most recent Home Builder Sentiment report by NAHB showed that sentiment among builders remains in positive territory.
  • Internal components of the report show that buyer traffic and current sales expectations ticked higher.
  • Forward looking sales expectations have softened a bit due to higher rates as some buyers remain on the fence.
  1. MORTGAGE RATES FLAT – Rates are relatively unchanged week-over-week but the daily changes have been volatile.
    https://www.mortgagenewsdaily.com/…
  2. RATE CUTS DELAYED – The Fed Funds Rate could stay higher for longer if inflation persists.
    https://www.morningstar.com/…
  3. WHAT HOMEBUYERS WANT – A recent study shows that a vast majority of homebuyers are looking for a home with at least one home office.
    https://www.eyeonhousing.org/…
  4. HOME PRICES KEEP CLIMBING – Higher rates are keeping a lid on housing supply and putting pressure on home price appreciation.
    https://www.housingwire.com/…

Rent Costs Are Increasing

In recent years, the rental market has seen a significant trend: rent prices are steadily climbing year after year. According to a recent CoreLogic Index for US Single-Family Rent, February 2024 marked the highest annual increase in the last 10 months, with US single-family rents surging by 3.4% year-over-year. Many large cities, in particular, have witnessed spikes of over 5%, putting a strain on renters’ budgets as they also grapple with high inflation.

As rent prices continue to soar, many individuals and families are grappling with the question of whether renting or owning a home is the better financial choice. The answer becomes increasingly clear when considering the broader economic landscape and the long-term benefits of homeownership. In fact, data from the Federal Reserve reveals that the median net worth of homeowners is a staggering 40 times greater than that of renters.

Benefits of Owning A Home

  • Owning a home provides stability and predictability in housing expenses. Unlike renting, where landlords can raise rents at their discretion, homeowners enjoy fixed monthly payments, consisting of principal and interest, that do not fluctuate over time. This stability not only offers peace of mind but also serves as a hedge against inflation, as the cost of housing remains consistent regardless of economic conditions.
  • Homeownership enables individuals to build equity over time and leverage their asset. Home prices have historically appreciated, increasing in value in 74 out of the last 82 years. Additionally, as mortgage payments are made, homeowners accumulate equity in their property, which can then be tapped into for various purposes, such as funding home improvements, financing education, or even investing in additional real estate properties. This ability to leverage one’s home as an assets opens up a world of financial opportunities and contributes to long-term wealth accumulation.

In conclusion, as rent prices continue to rise annually, the case for homeownership as a superior investment becomes increasingly compelling. Not only does homeownership offer the potential for significant wealth accumulation, but it also provides stability, predictability, and the opportunity to leverage one’s assets for further financial growth. Aspiring homeowners should consider these factors carefully when making their housing decisions, as owning a home represents not only a roof over one’s head but also a pathway to financial security and prosperity.

Mortgage Market Update (4/8/24)

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • Mortgage rates increased noticeably on Monday and are higher on a week-over-week basis.
  • The increase in rates was due to higher than expected numbers for the S&P and ISM manufacturing indices, which also mentioned higher prices in their reports.
  • Prices are crucial due to the persistent inflationary pressures, and if they fail to revert to the downward trend it will make it hard for the Fed to want to cut rates.


Personal Consumption Expenditures (PCE)

  • This is the Fed’s preferred measure of inflation and its goal is for the Core reading, which strips out volatile food and energy prices, to be at 2%.
  • Last week’s release of data showed that the Core headline reading fell to 2.8%, but the progress lower has been slowing.
  • With future data projecting a slow progress towards 2% for Core PCE, it may take weaker labor market data before the Fed cuts rates.


BLS Jobs Report

  • March’s job growth roared in above forecasts, as the BLS reported that 303K new jobs were created.
  • 68% of the job gains came from three sectors: Leisure & Hospitality (49,000), Government (71,000), and Education & Health Services (88,000)
  • Revisions to the data for January and February added an additional 22K jobs to those months combined.
  • Unemployment rate declined to 3.8%.


Case-Shiller Home Price Index

  • The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices rose 6% year-over-year in its most recent report for January 2024.
  • The 6% annual rate is the fastest increase since 2022 and all 20 cities in its composite index saw annual increases for the second straight month.
  • Home values are expected to remain supported throughout 2024 as housing demand remains high.
  1. RATES MOVE HIGHER EARLY IN WEEK – The concern for higher prices and inflation after Monday’s manufacturing data pushed rates higher early in the week.
    https://www.mortgagenewsdaily.com/…
  2. ISM INDEX TURNS POSITIVE – A barometer of business conditions at U.S. manufacturers turned positive in March for the first time in 17 months.
    https://www.marketwatch.com/…
  3. BABY BOOMERS PLAN TO STAY IN HOMES – More than three-quarters of baby boomers plan to stay in their home as they grow older.
    https://www.businesswire.com/…
  4. HOUSING MARKET STAYS TIGHT – New home listings are down to start the Spring market, but competition remains fierce as demand is still high.
    https://www.mpamag.com/…

FCC Closes The Lead Generation Loophole

You can read our previous blog post on trigger leads and how to reduce them by CLICKING HERE.

In the world of mortgage lending, trigger leads have long been a point of contention. While some praise them for their potential to foster competition and secure better rates for applicants, most oppose them for inundating borrowers with unwanted solicitations. However, developments in regulations over the past few years are refining rules for trigger leads in the pursuit of stronger data privacy and consumer protections. Most recently, the FCC announced a new ruling on December 13, 2023 that will effectively close the “lead generator loophole.”  

The FCC’s adopted rule to close the lead generator loophole marks a significant change in the way consumer information is shared with businesses through comparison shopping websites. Under this rule, consumers must provide individual consent for their information to be shared with each business, effectively closing the loophole that allowed for the sale of a single lead to multiple businesses at once. This move aims to address consumer frustrations with receiving an overwhelming number of calls and texts after submitting an online lead.

How Will This Ruling Impact Borrowers and Businesses?

  • Mortgage applicants can expect relief from the inundation of solicitation calls. The previous influx of unwanted calls and texts from solicitors has been a source of frustration for many applicants, but the FCC’s actions aim to mitigate this issue, ultimately enhancing the borrower experience.
  • Requiring businesses to obtain one-to-one consent before contacting new leads. The rule will likely reshape lead strategies for businesses built on this type of lead generation model and challenge the operational models of comparison-shopping sites due to compliance regulations.

Link to FCC Announcement

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