FHFA: Desktop Appraisals to Become a Permanent Option – Industry Outlook

By XINNIX | November 1, 2021 |

FHFA: Desktop Appraisals to Become a Permanent Option – According to Sandra Thompson, acting director of the FHFA, the Federal Housing Finance Agency will accept appraisals conducted remotely, those conducted without the physical presence of an appraiser, starting in early 2022 for qualifying Fannie Mae and Freddie Mac backed mortgages. Public records, including listings and tax appraisals, will be used to process desktop appraisals for purchase loans.

What was first used as a temporary option at the start of the pandemic when the industry faced high demand and a shortage of appraisers, will now allow banks and mortgage lenders a viable option to stay on track.

Source and link to full article: “FHFA Will Make Desktop Home Appraisals a Permanent Option,” American Banker (Oct. 18, 2021) [Log-in required.] and FHFA.gov

Lenders Shift Focus to Home Buyers as Refinances Slow – Based on a report from the Mortgage Bankers Association, applications to refinance fell by 7% recently, which is 22% lower than just a year ago.

As the 30-year fixed-rate mortgage rates rise above 3%, lenders are now shifting their focus to compete for purchase transactions.  This may prove beneficial for buyers.  As refinancing activity declines, home buyers may find themselves better positioned to negotiate a lower interest rate, Sam Polland, a loan officer at Intercoastal Mortgage LLC in Potomac, Md., told The Wall Street Journal.

Source and link to full article: “Rising Mortgage Rates Shift Lenders’ Focus to Home Buyers,” The Wall Street Journal (Oct. 17, 2021) [Log-in required.] and “Weekly Mortgage Demand Drops Over 6% After Interest Rates Move Even Higher,” CNBC (Oct. 20, 2021)

Co-Buying with Friends, Roommates Inching Up – According to the National Association of REALTORS® some Americans are buying a home with a friend or roommate to deal with the rising costs of ownership.  The increased buying and saving power of these partnerships has helped homebuyers deal with double-digit price increases in home prices.

The trend has been increasing since the pandemic.  During the second quarter of this year, the share of homes purchased by roommates rose to 3% of all buyers, an increase of 2% from a year ago.

Source and link to full article: “Buying a House With a Friend or Roommate? There’s a Lot to Agree To,” WTOP News (Oct. 25, 2021)

New-Home Sales Surge Despite Rising Prices – Based on a recent report from the U.S. Department of Housing and Urban Development and U.S. Census Bureau, reported sales of newly built, single-family homes jumped 14% in September compared to August, reaching a six-month high.

Despite price increases, the median new-home sales price continued to increase to $408,800 in September, up 18.7% over a year ago.

Overall, housing demand remains high, builders report. “Limited existing inventory and low interest rates are keeping demand strong, and more potential buyers may be coming off the fence as they expect interest rates to rise in the future,” says Chuck Fowke, chairman of the National Association of Home Builders.

Source and link to full article: National Association of Home Builders