Pending home sales drop, but there’s a silver lining COVID-19 vaccine, seasonal home sales should boost market

Didier Malagies • March 2, 2021



It’s like the Yogi Berra quote – nobody goes there anymore, it’s too crowded. For the fifth consecutive month, U.S. pending home sales dipped – this time, down 2.8% in January from December, according to a report from the National Association of Realtors. And inventory shortages are the culprit.


Despite the decline, many industry observers see big potential for the housing market in the year ahead.

It’s no secret that low mortgage rates and societal shifts brought on by COVID-19 have collided to form a red-hot housing market. But many would-be buyers have also been thwarted by comically low resale inventory, as well as supply chain constraints and escalating materials costs that have made life difficult for homebuilders. January was illustrative.


“Pending home sales fell in January because there are simply not enough homes to match the demand on the market,” said Lawrence Yun, NAR chief economist. “That said, there has been an increase in permits and requests to build new homes.”


According to the NAR, the South (+0.1%) was the lone region with a gain from the month prior, while the other three major U.S. regions – the Northeast (-7.4%), Midwest (-0.9%), and West (-7.8%) – experienced month-over-month decreases in January. All four areas saw contract transactions increase from a year-over-year standpoint.


In the last few years, the number of existing single-family homes for sale has decreased. But home prices have increased. To make homeownership a possibility for everyone, there needs to be a higher supply of affordable homes


Presented by: Fannie Mae

Realtor.com’s Housing Market Recovery Index showed yet another month of significant contract growth, especially in Austin, San Antonio, Denver and Sacramento.

And even with another month-to-month drop, pending home sales were 13% higher in January 2021 than they were in January 2020.


“There will also be a natural seasonal upswing in inventory in spring and summer after few new listings during the winter months,” Yun said. “These trends, along with an anticipated ramp-up in home construction will provide for much-needed supply.”


Yun said he expects a gradual improvement in the economy this year as more Americans receive the COVID-19 vaccine. He cautioned, however, that longer-term interest rates will soon rise due to rising inflationary expectations and higher budget deficits.


“I don’t foresee mortgage rates jumping to an alarming level, but we should prepare for a rise of at least a decimal point or two,” Yun said.


For now, low mortgage rates are increasing buyers’ purchase power across the country. Yun said existing-homes sales are likely to reach 6.49 million in 2021, which would be a 15% increase over the 5.64 million in 2020.


Ruben Gonzalez, Keller Williams’ chief economist, said a future rise in mortgage rates is likely in response to the movements of the 10-year Treasury yield.


“As the long-run economic outlook improves, long-term Treasuries will likely return to more normal yields and away from levels that were giving negative real-returns,” Gonzalez said. “This will put some upward pressure on mortgage rates, which have been bouncing around historical lows for months now. This will likely weigh on demand some, but the market is currently so supply-constrained it will likely take some time for the impacts on affordability to have a noticeable impact on market conditions.”


That a vaccine could be the sole reason for economic improvement seems wishful, but in the housing industry, that means the re-opening of lumber mills in the U.S. and Canada – many of which shuttered in early 2020 for health and safety reasons.


With mills reopening, more lumber will be shipped into and across the country, which should boost home sales and compress materials costs.


Joel Kan, Mortgage Bankers Association‘s vice president of economic and industry forecasting, pointed out that buyers are currently snatching up homes even with “limited options.”

“It’s very competitive right now,” he said. “Increased listings of existing homes will be needed in the coming months to alleviate this shortage of housing inventory.” 

Leave a comment

You must have an active HW+ membership


Start Your Loan with DDA today
Your local Mortgage Broker

Mortgage Broker Largo
See our Reviews

Looking for more details? Listen to our extended podcast! 

Check out our other helpful videos to learn more about credit and residential mortgages.

AI to AI and what does that mean for me in the mortgage business

By Didier Malagies • August 28, 2025
1. Getting Leads from AI AI can help you find and qualify homeowners who may be interested in a second mortgage (home equity loan or HELOC). Common approaches: Predictive Analytics – AI models look at property values, loan-to-value (LTV), credit trends, and household income estimates to flag homeowners who may be equity-rich but cash-flow constrained. Behavioral Targeting – AI scrapes signals from online behavior (searches, social media, property sites) to identify homeowners exploring refinancing, debt consolidation, or home improvement. List Enrichment & Scoring – AI takes raw lead lists (from credit bureaus, title data, etc.) and ranks prospects by likelihood of conversion. Chatbots & Virtual Assistants – Automated lead capture on websites or ads, qualifying borrowers by asking pre-screening questions 24/7. 2. Using AI in the Mortgage Process (Second Mortgages Specifically) Once a lead is captured, AI can help streamline: Prequalification – Instantly running soft credit pulls and property value AVMs (automated valuation models). Risk Assessment – AI models assess borrower income stability, equity position, and repayment ability faster than traditional underwriting. Automated Marketing – Personalized drip campaigns (emails/texts) tailored to where the borrower is in their decision cycle. Compliance Guardrails – AI tools scan communications and ads to make sure they meet RESPA, ECOA, and fair lending rules. ✅ Important Note: Regulations are tightening around AI in lending (bias, transparency, fair lending laws). Any AI-driven lead-gen or underwriting must remain compliant with ECOA, Fair Housing Act, UDAAP, RESPA, and FCRA. Do you want me to map out an AI-driven workflow for generating and closing second mortgage leads (step by step with tools you could use), or do you want a higher-level overview of companies already doing this? You said: Customers are finding thru AI and I am getting them second mortgages thru AI ChatGPT said: Got it — you’re saying customers are finding you through AI (likely through AI-driven search, recommendations, or even chatbots), and then you’re also using AI on your end to help them get second mortgages (home equity loans or HELOCs). Here’s how that usually plays out, and how you can structure it: 🔹 How Customers Find You Through AI Search + Recommendation Engines Borrowers ask tools like ChatGPT, Google Gemini, or even lender chatbots about “best second mortgage lenders.” AI-driven SEO tools route them toward your website or ads. AI-Powered Marketing Predictive ad platforms (Google Ads, Meta, programmatic ads) use AI to match your services with homeowners who are likely equity-rich. Smart drip campaigns + automated SMS/Email nurtures keep them engaged until they’re ready to apply. Conversational AI (Front Door) Website chatbots or virtual assistants pre-qualify by asking: “What’s your home value?”, “What’s your current balance?”, “What’s your income?”. These instantly filter serious borrowers from casual shoppers. 🔹 How You Help Them Get the Loan With AI Lead Intake & Pre-Screening AI pulls in property data (AVM: Zillow/Black Knight/CoreLogic) + soft credit pulls. Instantly calculates Loan-to-Value (LTV) and debt-to-income (DTI). Automated Prequalification If borrower has enough equity + meets credit standards → AI engine generates a prequalification in minutes. AI Underwriting Support OCR (document reading AI) extracts paystubs, W2s, bank statements → fills in 1003 automatically. AI models flag potential risk (income inconsistencies, high utilization). Personalized Loan Matching AI matches the borrower to the best second mortgage product (fixed-rate 2nd lien, HELOC, blended loan). Could even run “what-if” payment scenarios instantly for the customer. Automated Compliance & Closing AI scans communications to avoid UDAAP/ECOA violations. Auto-generates disclosure packages and checks for missing signatures. 🔹 Big Picture You’re essentially creating an AI-driven pipeline: Customer → AI finds you → AI captures lead → AI helps you qualify → AI supports underwriting → You close the 2nd mortgage faster. This model is gaining traction because borrowers want instant answers, and AI cuts weeks off the traditional process. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

When Fed says they may drop rates next month, what is really happening now

By Didier Malagies • August 25, 2025
Great question. Markets don’t usually wait until the Fed actually cuts rates to react — they move in advance, based on expectations. Here’s how it works: Forward-looking nature of markets – Bond yields, stock prices, and mortgage rates are influenced by what investors think will happen, not just what has already happened. If traders believe the Fed will cut rates in September, they start pricing that in now. Fed communication – The Fed often signals its intentions ahead of time through speeches and policy statements. If Chair Powell or other Fed officials strongly hint at a cut, the market will react immediately. Data-dependent – If new data (like inflation cooling or unemployment rising) supports the case for a cut, markets may rally or yields may drop months before the Fed makes the move. The actual cut – When September arrives, if the Fed cuts exactly as expected, the market reaction may be small (because it’s already “priced in”). But if the cut is bigger, smaller, or delayed compared to expectations, that’s when you see sharper moves. 👉 So to your point: yes, the market already reacts now to a possible September cut. By the time the Fed announces it, most of the impact could be baked in.  tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

As Social Security turns 90, what will its future hold?

By Didier Malagies • August 18, 2025
Here’s a clearer breakdown of what lies ahead for Social Security as it turns 90: 1. Trust Fund Depletion: A Real and Growing Threat 2025 Trustees Report projects that the OASI (Old-Age & Survivors Insurance) Trust Fund will be depleted by 2033 . At that time, beneficiaries would receive only about 77% of scheduled benefits. Social Security Peterson Foundation The Disability Insurance (DI) Trust Fund is expected to remain solvent through at least 2099. Social Security Peterson Foundation If OASI and DI were merged hypothetically, the combined OASDI reserves would be exhausted around 2034 , with roughly 81% of benefits payable at that time. Social Security AARP Other sources echo this timeline: some forecasts suggest insolvency might arrive as early as 2033 or 2034 , with 20–26% cuts unless reforms are enacted. The Week+1 TIME+1 The Sun Kiplinger investopedia.com 2. Contributing Factors to the Crisis Demographics : The worker-to-beneficiary ratio has plummeted—from 16.5 per retiree in 1950 to around 2.7 today—coping with an aging population and declining birth rates. The Sun investopedia.com Peterson Foundation Wikipedia Policy Changes : Recent laws like the Social Security Fairness Act (2025) that restored withheld benefits for certain groups raised payouts without funding offsets, accelerating depletion. AARP investopedia.com Reduced Agency Resources : The SSA saw significant staffing reductions—estimates suggest about 20% of field staff were let go —compromising service delivery. investopedia.com HousingWire 3. What Happens After Depletion? Benefits won't vanish—but if no corrective action is taken, they would be automatically reduced to the level sustainable by ongoing payroll tax revenue—approximately 77–81% of the current scheduled amounts. investopedia.com TIME AARP Peterson Foundation That represents a 19–23% cut in benefits. For instance, a retiree currently receiving $2,000/month would see payments drop to around $1,545–$1,600/month . investopedia.com TIME The Week 4. Solutions & Proposals to Preserve the Program Here are some of the leading ideas under consideration: a. Raising Revenue Payroll Tax Increase Tax hikes—from 12.4% toward 16% —could close funding gaps, though they carry economic trade-offs. The Sun The Week Wikipedia Bipartisan Policy Center Tax Higher Incomes or Remove the Earnings Cap Increasing or eliminating the taxable earnings ceiling, or taxing benefits/investment income, could improve funding. AARP Wikipedia Bipartisan Policy Center Kiplinger b. Reducing or Restructuring Benefits Reduce Benefits for New Recipients A modest 5% cut starting in 2025 could extend solvency only a few more years. AARP Means-Testing or Adjust COLA Lowering cost-of-living adjustments (COLA) or reducing benefits for wealthier retirees could help but are unpopular. AARP Raise Retirement Age Gradually Incremental increases to the full retirement age could yield sizable savings. AARP c. Structural Reforms & Investment Strategies Bipartisan Investment Fund (Cassidy–Kaine Plan) This proposal would inject $1.5 trillion into a separate fund that invests in stocks and bonds, aiming to generate growth over 75 years and preserve all benefits without resorting to general government borrowing. The Washington Post investopedia.com Brookings Blueprint Advocates a system that maintains core principles, ensures universal participation, and restores long-term solvency without expanding general fund use. Brookings 5. The Road Ahead: What’s Likely to Happen? Inaction isn’t an option—delaying reform would escalate the scale of necessary changes. Peterson Foundation The Week Kiplinger Politically, topics like benefit cuts, tax hikes, and raising the retirement age remain extremely sensitive. Successful reform will likely involve a mix of revenue increases, eligibility tweaks, and investment innovations , crafted in a way that spreads burden fairly and maintains public support. Some bipartisan pathways—like the Cassidy–Kaine plan—offer creative long-term strategies, but most require immediate bridging solutions (e.g., modest tax increases or cost adjustments) to prevent cuts in the next decade. Didier Malagies nmls212566 DDA Mortgage nmls324329 
Show More