Housing Market Roundup: Oct. 25 2021

While we were in San Diego last week for the MBA Annual Convention & Expo, a number of housing reports came across the MBA NewsLink desk that we didn’t get a chance to cover. Here’s a quick summary of those reports:

Redfin: September Homebuyer Bidding War Rate Drops to 2021 Low

Redfin, Seattle, said in September, 58.9% of home offers written by Redfin agents faced competition, a record low for 2021. That’s down from a revised rate of 60.8% in August and a peak of 74.3% in April. September marked the fifth-straight month of declines, putting the bidding-war rate on par with the level seen a year earlier (58.3%).

The report said the housing market has been cooling due to a typical seasonal slowdown, which has helped ease competition, but homes are still selling faster than usual for this time of year. This demand is largely fueled by an ongoing shortage of homes for sale. New listings fell 9% year over year in September and the typical home that sold went under contract in 18 days—more than a week faster than a year earlier.

“It’s typical to see a decline in competition as families head back to school and the weather cools down,” said Redfin Deputy Chief Economist Taylor Marr. “Buyers also aren’t having to offer as much above the asking price as they were in the spring, when competition in the housing market was peaking. As mortgage rates continue to rise, we can expect bidding wars to keep slowing.”

Black Knight: Forbearances Down Another 7,300

Black Knight, Jacksonville, Fla., said its weekly snapshot of its McDash Flash daily loan-level forbearance data noted after two weeks of sizable drops in the number of active forbearance plans (as hundreds of thousands of homeowners reached the end of their allowable terms), data showed more modest improvement last week.

The number of active forbearance plans fell by just 7,300 (-0.6%) this week, with declines of 10,500 among FHA/VA loans and 2,800 among GSE mortgages, partially offset by a 6,000 rise in plan volumes among portfolio and private-label securities mortgages.

As of October 19, Black Knight said 1.24 million mortgage holders remain in COVID-19 related forbearance plans, representing 2.3% of all active mortgages, including 1.3% of GSE, 3.9% of FHA/VA and 3.0% of portfolio held and privately securitized loans.

CFPB Orders Tech Giants to Turn Over Information on Payment System Plans

The Consumer Financial Protection Bureau on Oct. 21 issued a series of orders to collect information on the business practices of large technology companies operating payments systems in the United States. The Bureau said this information will help it better understand how these firms use personal payments data and manage data access to users so the Bureau can ensure adequate consumer protection.

“Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits,” said CFPB Director Rohit Chopra. “We have ordered them to produce information about their business plans and practices.”

The initial orders were sent to Amazon, Apple, Facebook, Google, PayPal and Square. The Bureau will also be studying the payment system practices of Chinese tech giants, including Alipay and WeChat Pay.

Black Knight: Foreclosure Starts Reverse Course in September

Black Knight, Jacksonville, Fla., said its monthly Mortgage Monitor found despite the recent moratoria expiration, the national delinquency rate fell to 3.91 percent in September—the first time the rate fell below 4 percent since start of the coronavirus pandemic.

The delinquency rate is down by 2.3 percent from August and by 41.3 percent from a year ago. Foreclosure starts also dipped in September after seeing a noticeable rise in August in the wake of the federal foreclosure moratoria expiration. September’s 3,900 foreclosure starts was the third lowest monthly total on record and within 6% of the record low set back in April of this year.

The report also said active foreclosures fell in September to another record low. However, some 1.2 million homeowners remain 90 or more days past due on their mortgages but are not yet in foreclosure, including those who are still in active forbearance plans.

Redfin: Fast Sales Increasingly Common this Fall

Redfin, Seattle, said 44 percent more homes are pending sale than at this time in 2019, but only 3% more homes recently hit the market—down from 12% growth over 2019 just seven weeks prior. As a result of the severe imbalance between the number of homes for sale and the number of buyers, the pace of the market is picking up at a time when it typically slows.

The report said one-third of homes are finding buyers within a week of hitting the market, up from 30.8% at the end of the summer. “The boost of housing supply that came on the market during the summer has already faded away, even as demand tapers off as we expected it to in the fall,” said Redfin Deputy Chief Economist Taylor Marr.

The report said the median home-sale price increased 13% year over year to $355,875. This was up 29% from the same period in 2019.

Financial Regulatory Agencies in Issuing Statement on Discontinuation of LIBOR

Five federal financial regulatory agencies and state bank and credit union regulators issued a statement highlighting risks posed by the discontinuation of LIBOR.

The Consumer Financial Protection Bureau urged banks and nonbanks alike to continue their efforts to transition to alternative reference rates to mitigate consumer protection, financial, legal, and operational risks.

The approaching discontinuation of most LIBOR tenors in June 2023 presents financial, legal, operational, and consumer protection risks, the Bureau said. “Additionally, consumers may not know when the transition from LIBOR will occur or how institutions will calculate their interest rates if they do not issue required disclosures to consumers.

Second-Home Demand Jumps in September, Bouncing Back After Summer Slowdown

Redfin, Seattle, said September demand for second homes was 60% higher than it was before the coronavirus pandemic hit.

The popularity of vacation homes skyrocketed at the onset of the coronavirus pandemic, with many well-off Americans opting to leave city-life behind and work remotely. But the surge in demand for second homes started to slow as cities lifted stay-at-home restrictions, the initial shock of the pandemic faded, spring homebuying season ended and the overall housing market began to cool.

ATTOM: Illinois, N.J., Delaware Face Highest Risks from Pandemic Fallout

ATTOM, Irvine, Calif., released its third-quarter Special Coronavirus Report, spotlighting county-level housing markets around the United States that are more or less vulnerable to damage from the ongoing Coronavirus pandemic still endangering the U.S. economy. The report shows that New Jersey, Illinois and Delaware had the highest concentrations of the most at-risk markets in the third quarter – with the biggest clusters in the New York City and Chicago areas – while the West remained far less exposed.

The third-quarter trends, which generally continued second-quarter patterns, revealed that New Jersey, Delaware and Illinois had 26 of the 50 counties most exposed to the potential housing-related impacts of the pandemic. They included eight counties in the Chicago metropolitan area, six near New York City, along with two of Delaware’s three counties. Three counties in the Philadelphia suburbs also made the top-50 list.

Elsewhere, the rest of the 50 most vulnerable counties were scattered mainly along the East Coast states. Among them, only Florida had more than three counties in the top 50. Just two western counties, both in California, made it into the top 50 during the third quarter of this year, while the West again had the highest concentration of markets considered least vulnerable to pandemic-related damage.