News You Can Use – December 2022 Edition

Market News

• Mortgage Orb — Falling Mortgage Rates Helped Boost New Home Sales in November. “Falling mortgage rates gave new home sales a boost in November compared with October, but they remained down from a year ago.”
• DSNEWS — Average Rent Surpasses $2,000. “Median rent climbed 7.4% in November on a yearly basis to $2,007, its smallest increase in 15 months and now the sixth month in which median annual rent growth has slowed. This information comes from Redfin’s latest Rental Market Tracker Report which found overall that rents are growing at half the pace they were in the summer and this cooling trend is expected to continue—good news in terms of interest rates. “Rent growth is likely to continue cooling,” said Redfin Economics Research Lead Chen Zhao. “Asking rents are already down annually in 14 of the metros Redfin tracks, and we expect declines to become more common in the new year. That should ultimately help slow inflation further. Slow inflation will lead to lower mortgage rates, which should also bring more homebuyers back to the market.”
• NMN — Mortgage delinquency rate will rise 0.5% in 2023: TransUnion. “The rate at which borrowers have been marked consistently late on their mortgages is on track to increase by half a percentage point next year, according to TransUnion. The 60-day-plus delinquency rate will rise to 1.4% by year-end 2023 from an estimated 0.9% this year, the credit bureau forecast. This year’s expected delinquency rate is marginally higher than last year’s 0.8%. The two-month delinquencies tracked by TransUnion typically average around 2% and at their height during the Great Recession’s housing crash they got into the 7% range.”
• National Mortgage Professional — The Fed Adopts Final Rule To Replace LIBOR. “The Federal Reserve Board said today it has adopted a final rule to implement the Adjustable Interest Rate (LIBOR) Act. The final rule identifies benchmark rates based on the Secured Overnight Financing Rate (SOFR) that will replace LIBOR in certain financial contracts after June 30, 2023. The final rule is substantially similar to the proposal, but with certain clarifying changes made in response to public comments.”
• NMN — Housing inventory sees biggest surge in 7 years. “For-sale inventory of single-family homes increased by its largest year-over-year margin since 2015, but it was the result of homes staying on the market longer rather than a flood of new listings, Redfin found.”
• SCOTSMAN GUIDE — After eight-month slide, Fannie Mae’s housing sentiment index sees slight increase. “Fannie Mae’s Home Purchase Sentiment Index (HPSI) finally reversed course in November, breaking an eight-month streak of decreases but remaining near its all-time low point. The HPSI, which is derived from a survey that assesses consumer attitudes toward housing, increased by 0.6 points during the month, reaching a reading of 57.3. It is the first such increase for the index in nine months, although its reading is still hovering around the record low of 56.7, set in October.”
• DSNEWS — Foreclosures Have Likely Peaked for 2022 “ATTOM, a leading curator of real estate data nationwide for land and property data,  today released its November 2022 U.S. Foreclosure Market Report, which shows there were a total of 30,677 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions – up 57 percent from a year ago, but down 5 percent from the prior month. States with the highest foreclosure rates were again: Illinois (one in every 2,401 housing units with a foreclosure filing); Delaware (one in every 2,736 housing units); New Jersey (one in every 2,916 housing units); South Carolina (one in every 3,195 housing units); and Wyoming (one in every 3,237 housing units). Lenders repossessed 3,770 U.S. properties through completed foreclosures (REOs) in November 2022, down 9 percent from last month but up 64 percent from last year. States that had the greatest number of REOs in November 2022, included: Illinois (343 REOs); New York (313 REOs); Pennsylvania (220 REOs); Michigan (210 REOs); and Ohio (208 REOs).”
• CNBC— Why your credit score is so important as interest rates rise “The national average credit score sits at an all-time high of 716, unchanged from a year ago, according to a report from FICO, developer of one of the scores most widely used by lenders. When the data is broken down by state, residents of Minnesota have the highest average credit score nationwide, at 724, followed by New Hampshire, Vermont and Massachusetts, according to a separate report by WalletHub based on TransUnion data. With an average credit score of 662, Mississippi residents had the lowest ranking across the country, along with Louisiana, Alabama and Arkansas.”
• MORTGAGE ORB—Connecticut Market Leads Realtor.com List of Top Spots for 2023. “Realtor.com has released its 2023 Top Housing Markets forecast, highlighting markets that will see strong growth in home sales and listing prices following a period of relatively calm price increases and a smaller affordability crunch than other markets across the U.S.”
• SCOTSMAN GUIDE—Fannie Mae integrates more banking and investment account data into automated underwriting. “Fannie Mae has added more upgrades to its automated underwriting system aimed at further extending homeownership opportunities for underserved demographics. Specifically, the enhancements are targeted at simplifying the borrowing process for homebuyers who don’t have a credit score by pulling data from banking and investment accounts.”
• USA TODAY—The 10 hottest real estate markets of 2023: Goodbye COVID boomtowns. “After a sudden slowdown in many housing markets this year, will markets that are “slow and steady” shine in 2023? Midsize markets, which saw lower price increases and less of an affordability crunch than others, are poised to see the strongest combined growth in home sales and listing prices in the coming year, according to a report from Realtor.com.” 
• HOUSING WIRE—How to Reach the Growing Segment of Hispanic American Homebuyers in 2023.“As interest rates remain volatile and demand continues to suffer, lenders across the industry are seeking new avenues to reach borrowers. Often, that means analyzing target markets to determine fresh ways to connect with growing demographics. For many, this analysis is unearthing a noteworthy trend: In many pockets of the U.S., Hispanic Americans represent a fast-expanding segment of borrowers with an increasing number seeking home loans and homeownership.” 
• DSNEWS—Investor Home Sales Slide in Q3.“With rising rates, instability in home prices and overall economic uncertainty, an increasing number of investors held back from purchasing homes in the third quarter of 2022. According to Redfin, investor home purchases fell 30.2% year-over-year nationwide in Q3 of 2022—marking the largest decline since the Great Recession aside from the Q2 of 2020, when investor activity plummeted due to the onset of the pandemic. The dip in investor home purchases outpaced a 27.4% drop in overall home purchases nationwide in Q3. From Q2 to Q3, investor home purchases slumped 26.1%, the largest quarterly decline on record with the exception of the start of the pandemic—compared to a 17.4% quarterly drop in overall home purchases.” 
• NMN— Regions are most at risk of housing decline. “Several counties in Mid Atlantic states, as well as California and Illinois, have an elevated risk of housing market declines compared to the rest of the country, according to analysis (Attom). Using information on gaps in home affordability, underwater mortgages, foreclosures and unemployment, Attom found that 28 out of the 50 U.S. counties most vulnerable were located in New Jersey, Illinois and California. In the second quarter, those same states had 27 of the counties that would be most at-risk in the event of a major economic downturn. Also New York City, Chicago and Philadelphia had the highest concentrations of most vulnerable counties.”
• FHFA—House Price Index (HPI) Quarterly Report. “Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012. House prices rose in all 50 states and the District of Columbia between the third quarters of 2021 and 2022. The five areas with the highest annual appreciation were: 1) Florida 22.7 percent; 2) South Carolina 18.4 percent; 3) Tennessee 17.9 percent; 4) North Carolina 17.4 percent; and 5) Georgia 16.7 percent. The areas showing the lowest annual appreciation were: 1) District of Columbia 1.8 percent; 2) Oregon 7.6 percent; 3) California 7.6 percent; 4) Minnesota 7.7 percent and 5) Louisiana 8.3 percent.”