Housing Market Roundup, Jan. 4, 2021
We hope you had an enjoyable holiday break. Here is a summary of some reports that came out over the holidays:
RE/MAX: Monthly Housing Report Shatters Records
RE/MAX, Denver, said home sales eclipsed previous high for November while also breaking records for highest median sales price and fastest sales.
The company’s monthly National Housing Report for November reported home sales up by nearly 20% from a year ago, while inventory reached its lowest point since the report debuted in 2008. New November records, which reflect averages across 52 U.S. markets, included a median sales price of $292,000 – up 13.8% year-over-year – and an average number of days on market at 36 – down nearly two weeks from last year’s 49.
“The nearly 20% year-over-year gain in sales is another sign of the housing market’s enduring strength and appeal,” said RE/MAX Holdings CEO Adam Contos. “People are on the move, and we anticipate buyer demand staying high into next year. The low interest rate environment is driving opportunities for both buyers and sellers, so the upticks in price aren’t slowing things down much at all. The primary headwind continues to be the severe lack of available inventory across the country.”
The report noted although November did experience the normal seasonal decline from October, with home sales decreasing 14.5% month-to-month (in line with the 12% average drop of the past five years), home sales were up 19.7% from a year ago.
First American: ‘Super Sellers’ Market Could Hinder 2021 Affordability Outlook
First American Financial Corp., Santa Ana, Calif., released its October Real House Price Index, showing the coronaviru pandemic has intensified a sense of home as refuge and falling mortgage rates have made financing a home purchase historically inexpensive. As a result, demand for homes has surged while the supply of homes for sale has fallen to near record lows, resulting in rapid house price appreciation. Nominal house price appreciation was 7.9 percent higher in October than in March of this year, a precipitous rise in just seven months that has pushed back against the 10.7 percent increase in house-buying power over the same period.”
“The good news is affordability has improved nationally by 2.5 percent since the start of the recession in March,” said First American Chief Economist Mark Fleming. “Mortgage rates are fairly consistent across the country, so when mortgage rates fall, they boost house-buying power and increase affordability in every city. However, the other components of the RHPI, household income levels and nominal house prices, vary market by market, so they do not have a uniform impact on affordability.”
The report said states with the greatest year-over-year increase in the RHPI were Wyoming (+2.7 percent), Vermont (+0.3 percent) and Oklahoma (+0.2 percent). States with the greatest year-over-year decrease in the RHPI were California (-9.0 percent), New Hampshire (-7.6 percent), Hawaii (-7.6 percent), Massachusetts (-7.6 percent) and Nevada (-7.4 percent).
FHFA Issues RFI on Appraisal-Related Policies, Practices, Processes
The Federal Housing Finance Agency on Dec. 28 issued a Request for Input on appraisal-related policies, practices and processes. The input received in response to the RFI will be used by FHFA to determine necessary modifications needed to ensure Fannie Mae and Freddie Mac operate in a safe and sound manner.
The RFI covers four areas related to appraisals:
- Appraisal modernization;
- The Uniform Appraisal Dataset (UAD) and the design of appraisal forms;
- Automated Valuation Models (AVMs) and appraisal waivers; and
- Valuation differences by borrower and neighborhood ethnic makeup.
“Modernizing the appraisal process has the potential to create a more streamlined and accurate collateral valuation process. But if modernization is not properly adopted, it could have negative unintended consequences,” said Director Mark Calabria. “[The] RFI will improve FHFA’s understanding of how the Enterprises can improve the appraisal process while at the same time ensuring they don’t take on unintended or inappropriate levels of risk. The comments we receive will inform how we will modernize appraisals to improve both loan quality and the origination process.”
FHFA invites feedback on all the questions in the RFI by Feb. 26.
Redfin: Home Prices Up 14%, Pending Sales Rise 34%
Redfin, Seattle, said the median home sale price increased 14% year over year to $320,714 during the four-week period ending December 20.
The report also said pending home sales rose by 34% year over year. In the single week ending December 20, pending sales increased by 30% from the same week a year earlier. New listings of homes for sale rose by 12% from a year earlier.
Redfin said active listings (the number of homes listed for sale at any point during the period) fell 31% from 2019 to a record low. Thirty-nine percent of homes that went under contract had an accepted offer within the first two weeks on the market, well above the 26% rate during the same period a year ago.
“Going into the new year, it will truly be out with the old, because there will be very few homes from 2020 left on the market,” said Redfin chief economist Daryl Fairweather. “So those who resolve to buy a home in 2021 may need to wait with bated breath for sellers to list their homes.”
Washington State is Nation’s Hotspot
Six of the 10 most competitive cities for buying a home this year are in Washington state, according to a new report from Redfin, Seattle. Spanaway, Wash., 45 miles south of Seattle in the Tacoma metro area, is the most competitive city of 2020, with 68.9% of homes sold above list price and the typical home staying on the market for just five days before going under contract, eight fewer days than last year. Home prices were up 20.8% from the year before and supply was down 32.7%.
Lacey, Wash., and Tacoma, Wash., are the are next-most competitive cities. Seventy-two percent of homes in Lacey sold above list price, and the typical home went under contract in five days, six fewer days than last year. In Tacoma, 62% of homes sold above list price, and the typical home went under contract in just six days, 12 days less than last year. Home prices in those cities were up 17.5% and 17.9% from the year before, respectively.
Other cities on the list are Wyoming, Mich.; Eastmont, Wash.; Frederickson, Wash.; Graham, Wash.; Pleasant Hill, Calif.; San Leandro, Calif.; and South Portland, Maine.
FHA Releases TOTAL Mortgage Scorecard Version 4.0
The Federal Housing Administration on January 1 released a new version of its Technology Open To Approved Lenders (TOTAL) Mortgage Scorecard. This new version incorporates adjustments to maintain and improve upon predictiveness as part of FHA’s continual revalidation of the TOTAL scoring model.
All mortgages being scored for the first time will be scored using the new version. For mortgages with a case number, the mortgages will be scored using the version that was effective when the case number was assigned. Existing mortgages scored without a case number will be scored according to the version number tag that is provided in the TOTAL file by the Automated Underwriting System (AUS) provider (if none, then the current version will be used). All mortgages without a case number will be scored using the new version 90 Days after the new version is implemented.
The online or PDF versions of the FHA Single-Family Handbook can be accessed here. View TOTAL Mortgage Scorecard information here.
CFPB Issues Approval Order for Dual Usage Credit Cards
The Consumer Financial Protection Bureau on Dec. 30 issued a compliance assistance sandbox approval order to Synchrony regarding its proposal to develop a “dual-feature credit card.”
The card is designed for consumers with a limited or damaged credit history as a tool that can be used to establish or reestablish a favorable credit history. Synchrony intends to offer a lower rate on secured use with the opportunity for eligible accountholders to graduate to unsecured use after 12 months. The terms of both secured use and unsecured use will be disclosed at the opening of the dual-feature credit card account. The terms will then be redisclosed with the opportunity to opt-in to unsecured use.
A copy of the CAS approval order issued to Synchrony can be found here.
Black Knight: Forbearance Volume Up for 3rd Straight Week
Black Knight, Jacksonville, Fla., released its latest blog reporting forbearance plan volumes ticked upward for the third consecutive week, rising by 15,000 from the week prior and pushing the number of active plans to its highest level since early November.
The report said FHA/VA forbearances increased by 11,000 from the week prior, with portfolio/PLS forbearances increasing by 4,000, while GSE forbearance volumes remained flat.
Black Knight said forbearance plan starts also hit their lowest level since the start of the pandemic, a number also likely impacted by the holidays. Start volumes have now fallen in each of the last three weeks. Despite three consecutive weekly rises, the number of active plans only stands 13,000 higher than the same point last month. As of Dec. 29, some 2.83 million (5.3% of) homeowners remain in COVID-19-related forbearance plans, including 3.5% (964,000) of GSE mortgages, 9.6% (1.16 million) of FHA/VA loans and 5.4% (700,000) of portfolio-held and privately securitized loans.
