A Third of Homes Are ‘Equity Rich’ – Industry Outlook

By August 23, 2021Industry Outlook

First-Time Home Buyers Lead Uptick in Mortgage Apps – According to the Mortgage Bankers Association’s recent report, mortgage demand for home purchases reversed course, after falling for the past month. Mortgage applications to purchase a home increased 2% and offered a signal that more first-time buyers may be emerging. Still, purchase applications are 18% lower than a year ago, the MBA said. Higher prices and the scarcity of housing inventories have been blamed on slowing many segments of the housing market. “The higher level of purchase activity recently was driven by more government purchase applications, including a 3.3% increase in FHA loans,” said Joel Kan, an MBA economist. “With low for-sale inventory keeping home price appreciation in many markets at record highs, the jump in FHA purchase applications is potentially a sign that more first-time buyers are finding purchase options despite the high prices.”

Source and link to the full article:  “Weekly Mortgage Demand Hints at Return of the First-Time Homebuyer,” CNBC (Aug. 11, 2021)

Fannie Mae to Factor Rental Payments into Mortgage Underwriting – Based on the Federal Housing Finance Agency’s announcement, Fannie Mae will now allow lenders to factor in a borrower’s rental payment history during the mortgage underwriting process. This move could qualify more potential buyers for a home loan. The FHFA’s addition of rental payments could help borrowers with limited credit histories access home loans more easily. Credit reports usually don’t include rent payments to residences because most landlords don’t report such data to credit reporting firms. Credit scores of renters, therefore, don’t usually reflect their timely payments. But “for many households, rent is the single largest monthly expense,” said Sandra L. Thompson, acting director of the FHFA. “There is absolutely no reason timely payment of monthly housing expenses shouldn’t be included in underwriting calculations. With this update, Fannie Mae is taking another step toward understanding how rental payments can more broadly be included in a credit assessment, providing an additional opportunity for renters to achieve the dream of sustainable homeownership.”

Source and link to the full article:  FHFA.gov

A Third of Homes Are ‘Equity Rich’ –  According to a new report from ATTOM Data Solutions, higher home prices are translating into mega wealth for those who own. Thirty-four percent of residential properties in the U.S. with a mortgage were considered “equity rich” in the second quarter, which means the combined estimated amount of loans secured by the properties was at least 50% of its estimated market value. The number continues to grow, increasing from 31.2% in the first quarter and 27.5% in the second quarter of 2020. “The huge home price jumps over the past year that helped millions of sellers earn big profits also kicked in big-time during the second quarter for other owners who saw their typical equity improve more than at any time in the last two years,” said Todd Teta, chief product officer with ATTOM. “Instead of the virus pandemic harming homeowners, it’s helped create conditions that have boosted the balance sheets of households all across the country.”

Source and link to the full article:  “Homeowner Equity Surges Across U.S. During Second Quarter in Yet Another Sign of a Healthy Housing Market,” ATTOM Data Solutions (Aug. 5, 2021)

2020 Census Reveals Most Diverse U.S. Population Ever – Based on newly released 2020 Census Bureau data, the U.S. population is more multiracial than ever before. People of color represented 43% of the total U.S. population in 2020. That is up from 34% in 2010. The percentage of non-Hispanic whites has dropped in that time, marking the largest decrease of any race or ethnicity. Non-Hispanic whites dropped to 57% of the U.S. population in 2020; in 2010, the category accounted for 63% of the population. The number of Americans who identified as Hispanic or Latino or as multiracial posted the most growth.

Source and link to the full article:  Census.gov and “Census Release Shows America Is More Diverse and More Multiracial Than Ever,” CNN.com (Aug. 12, 2021)

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