Still many refi opportunities out there, new report finds

There was a 34% increase in consumers searching for “rate-and-term” in the third quarter

There is still ample opportunity in the market for lenders to rope in refi business, according to a quarterly report published Monday by Sales Boomerang. And the reason for this is two-fold.

The report – which is compiled using data sourced from more than 150 residential mortgage lenders – found that one in 12 borrowers saw “significant home equity growth” in the third quarter.

Plus, the frequency of borrowers searching for the phrase “cash-out” increased by almost 300% from Q2 to Q3. The behavioral data analytics firm says these developments point to the fact that “borrowers have grown their credit scores alongside their equity, paving the way for more cash-out refinance and HELOC activity in the coming months.”

Additionally, there was a 34% increase in consumers searching for “rate-and-term” in the third quarter, showing a continued interest in getting a refi, Sales Boomerang said in its report.

However, the company also noted that the refi opportunities still out there are not low-hanging fruit and will require lenders “to be proactive in reaching out to potential refi customers, as many eligible customers do not appear to be shopping for rates on their own.”

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Sales Boomerang concluded this based on the decline in customers looking up mortgage information (5.27%, down 10.22% from Q2) and early pay offs (2.23%, down 8.23% from Q2).

The analytics vendor also threw a bit of a wrench at predictions voiced by market experts that a home purchase boom is imminent in late 2021, with the firm finding a 24% quarter-over-quarter dip in “new listing” alerts. Sales Boomerang suggested that “lenders may need to revise their year-end revenue forecasts.”

Alex Kutsishin, CEO of Sales Boomerang, said in a statement that refi activity has indeed started to slow and the purchase market “has not yet picked up the slack.”

“Still, the big-picture view says we are still in the midst of a housing boom,” he said. “Ample purchase and refinance opportunities remain, and our data intelligence points to myriad ways lenders can improve borrowers’ financial position with the right loan product.”

One of the ways for lenders to do this is by reaching out to FHA borrowers “with mortgage insurance [who] are unaware they have the option to remove their MI once they reach 20% equity,” the report said.

From Q2 to Q3 there was a 366% quarter-over-quarter increase in “FHA MI removal” alerts and “lenders have the opportunity to deliver immediate monthly savings to borrowers,” the report added.

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Retiring at age 65 is no longer feasible, older investors say

By Didier Malagies • 22 Apr, 2024

Retirement at 65 has been a longstanding norm for U.S. workers, but older investors believe that not only is such an outcome unfeasible, but they’re likely to face more challenging retirements than their parents or grandparents. This is according to recently released survey results from Nationwide , with a respondent pool that included 518 financial advisers and professionals, as well as 2,346 investors ages 18 and older with investable assets of $10,000 or more. The survey follows other ongoing research into the baby boomer generation as it approaches “ Peak 65 .” The investors included a subset of 391 “pre-retirees“ between the ages of 55 and 65 who are not retired, along with subsets of 346 single women and 726 married women, Nationwide explained of its methodology. Seven in 10 of the pre-retiree investors said that the norm of retirement at age 65 “doesn’t apply to them,” while 67% of this cohort also believe that their own retirement challenges will outweigh those of preceding generations. Stress is changing the perceptions of retired life, especially for those who are closest to retirement, the results suggest. “Four in 10 (41%) pre-retirees said they would continue working in retirement to supplement their income out of necessity, and more than a quarter (27%) plan to live frugally to fund their retirement goals,” the results explained. “What’s more, pre-retirees say their plans to retire have changed over the last 12 months, with 22% expecting to retire later than planned.” Eric Henderson, president of Nationwide Annuity , said that previous generations who observed a “smooth transition” into retired life do not appear to be translating to the current generation making the same move. “Today’s investors are having a tougher time picturing that for themselves as they grapple with inflation and concerns about running out of money in retirement,” Henderson said in a statement. The result is that more pre-retirees are changing their spending habits and aiming to live more inexpensively. Forty-two percent of the surveyed pre-retiree cohort agreed with the idea that managing day-to-day expenses has grown more challenging due to rising costs of living, while 27% attributed inflation as the key reason they are saving less for retirement today. Fifty-seven percent of respondents said that inflation “poses the most immediate challenge to their retirement portfolio over the next 12 months,” while 41% said they were avoiding unnecessary expenses like vacations and leisure shopping. Confidence in the U.S. Social Security program has also fallen, the survey found. “Lack of confidence in the viability of Social Security upon retirement (38%) is a significant factor influencing pre-retirees to rethink or redefine their retirement planning strategies,” the results explained. “Over two-fifths (43%) are not counting on Social Security benefits as much as previously expected, and more than a quarter (27%) expect to receive less in benefits than previously anticipated.” The survey was conducted by The Harris Poll on behalf of Nationwide in January 2024.

Opportunities for First Time Home Buyers

By Didier Malagies • 22 Apr, 2024

Depending on where you live there is an opportunity in certain areas that you can get $2,500 towards the closing costs. You also get a lower rate and monthly PMI. Programs open up to you where there is down payment assistance and also the 1% down program available. I am seeing more and more first-time home buyers coming out now and this is information you need to know. Yes, home prices are higher and rates as well. But if you have these programs available and the payment is affordable then the probability of refinancing down the road is in your favor and if inflation continues to go up so will home prices. Maybe it is the right time to buy a home now? Tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

The mortgage rate pendulum swings yet again

By Didier Malagies • 18 Apr, 2024

Expect 2024 to be mildly better than 2023 with mortgage rates falling in the second half of the year, housing experts opined in their forecasts at the end of the year. Cuts to the Federal funds rate (and subsequently to mortgage rates) are imminent, traders enthused after December’s meeting of the Federal Open Market Committee in which committee members predicted three rate cuts in 2024. Some experts forecasted as many as six rate cuts in the year based on this news. Rate cuts are still coming, just not in March , traders and market experts reasoned more recently as the economy continued to run hot. And now on the heels of reports of stronger than expected jobs growth and stickier than anticipated inflation , the market’s shift from optimism to pessimism over rate cuts is complete. Some even expect rate hikes before rate cuts. The pessimism is visible in mortgage rates. Freddie Mac‘s weekly Primary Mortgage Market Survey is climbing back towards 7%. HousingWire’s Mortgage Rate Center , which relies on data from Polly, is already above 7.2%. Rates were as low as 6.91% for Polly and 6.64% for Freddie as recently as February. On Tuesday, they reached 7.50% on Mortgage News Daily, a high for this year. Mortgage rates hold major power in the housing industry; most importantly, high rates exacerbate the current affordability crisis by walloping the buying power of would-be buyers and discouraging some would-be sellers – those with low, fixed-rate mortgages – from listing their homes, a drain on available inventories. All this leaves housing professionals once again fighting for their share of shrinking pies – as we have observed with recently released mortgage data and RealTrends Verified’s brokerage data , as well as deeper dives on the brokerage landscapes in Jacksonville and San Diego . It is unsurprising, then, that real estate stocks have suffered since the FOMC’s March meeting and the recent job and inflation reports. That includes the nation’s top homebuilders (DR Horton and Lennar), mortgage originators (United Wholesale Mortgage and Rocket Mortgage), brokerages (Anywhere and Compass) and residential search portals (Zillow and CoStar, which owns Homes.com). There are other dynamics at play for some of these companies, however. The brokerages are also contending with the rule changes included in a proposed settlement by the National Association of Realtors; some investors also believe those rule changes advantage CoStar at the expense of Zillow . UWM, meanwhile, is contending with a scathing investigative report by a hedge-fund-affiliated news organization whose hedge fund shorted UWM and went long on Rocket; it is also dealing with pending litigation . UWM denies the allegations made in the report. High mortgage rates, fewer mortgage applications and fewer home sales are unfortunately not the only effects housing professionals could see from a more prolonged high-rate environment. There are also spillover effects from other industries, especially office real estate. Regional banks – which traditionally have been major residential mortgage originators – went big on commercial real estate loans as larger banks scaled back in this area in recent years. That increased their exposure to downtown office towers, which have seen an exodus of tenants and a bottoming out of appraised values just as a record $2.2 trillion in commercial real estate debt comes due over the next few years. That ties up capital that could otherwise flow to residential mortgages and in some cases stresses banks like New York Community Bank, parent of Flagstar Bank — the 7th-largest bank originator of residential mortgages, 5th-largest sub-servicer of mortgage loans and the 2nd-largest mortgage warehouse lender in the country. Homebuilders, too, feel the effects of prolonged high rates. Although homebuilder confidence is still up significantly since last fall, new housing starts are slowing . The dim prospects for homebuyers have turned some investors to the nascent build-to-rent sector , essentially a bet that high rates are here to stay for long enough that would-be buyers are now would-be renters.