Hello, LOs!
Across America, homebuyers locked mortgages at rates around 5.4% yesterday. If you told me a year ago that mortgage rates would be at that level, I would have scoffed.
The Mortgage Bankers Association, however, believes the climb will be over soon.
"I think we are about at the end of the increase in mortgage rates," Bob Broeksmit, the president of the trade group, said on Bloomberg TV. "We've seen mortgage rates go up over 150 basis points just this calendar year and we think they are anticipating the full range of Fed movements. So we think rates are not going to go much above 5."
Fannie Mae's forecasters lowered their mortgage outlook yesterday. Fannie's economic and strategic research group dropped its projected single-family mortgage origination volume for 2022 to $2.8 trillion from $3 trillion. It also downsized the 2023 forecast to $2.4 trillion from $2.7 trillion. In 2021, total origination volume checked in at $4.5 trillion.
Fannie Mae expects a 7.4% decline in home sales for 2022, followed by a 9.7% reduction in 2023 – previously, it expected a 4.1% drop this year and 2.7% in the next year.
The government sponsored enterprise is also predicting a "modest recession."
LOs, what do you think of these forecasts? Are you preparing your business for a big slowdown? Did you create a rainy day fund during the exceptional years of 2020 and 2021? Share your thoughts with me at james@hwmedia.com.
Other stuff to know today:
*A new Redfin report claims 51% of homeowners with a mortgage have a rate below 4%. In other words, tens of millions of Americans likely won't be moving anytime soon. The rise in mortgage rates has a sizable impact on housing supply, which is already at historically low levels. New listings fell 7% year over year during the four weeks ending April 10, according to Redfin. By comparison, they were only down 1% at the end of February, before mortgage rates shot up.
*Mortgage applications dropped 5% for the week ending April 15. Both the purchase and refi indices fell. Refis are now just 35.7% of applications, though ARMs are up to 8.5%.
*Mike Eshelman, formerly the senior VP of marketing at Pennymac, is now chief marketing officer at Mr. Cooper.
*Spruce, which provides an API-driven solution for title and closing services, is launching a relocation services program.
*Homepoint has a new referral business for mortgage brokers and regional homebuilders. The wholesale lender is also launching jumbo ARMs in May.
*Now that LO pipelines are thinning, recruiting is picking up, several LOs told me. I'm curious – are nonbank lenders still handing out big signing bonuses? Email me anonymously at james@hwmedia.com.
Alright, that's it from me. Hope you all have a great Wednesday!
James Kleimann
Managing Editor, HousingWire
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