THE BIG SPLASH

Mortgage Lenders Take a Hit

Mortgage lenders in the United States lost money on loans for the first time in years as soaring interest rates impacted demand, according to a new report by the Mortgage Bankers Association.

More

• The study found that banks and mortgage firms lost an average of $301 per loan they originated in 2022, down from an average profit of $2,339 per loan the previous year.

• Low housing inventory and affordability issues, coupled with the rapid rise in mortgage rates over a relatively short period, resulted in lower revenues and higher costs per loan.

• This led to declining volumes of purchase and refinance, and a rise in the cost per loan to an all-time high of $10,624.

• The report also noted that average loan balances for first-time mortgage holders increased to $323,780 in 2022 from $298,324 in 2021, marking the largest single-year increase since 2008.

• Although mortgage rates have settled after hitting a peak of 7% for the benchmark 30-year fixed rate mortgage, the Federal Reserve's efforts to tamp down inflation have led to even more interest rate increases.

A SCOOP OF HOUSE FLIPPING

The End of House Flipping?

Zillow's Chief Economist Skylar Olsen has warned that short-term real estate investors, who use house-flipping tactics, won't make quick bucks anymore in the current US housing market.

More

• Olsen attributed her bearish outlook to the mortgage rates expected to stay around 5.5-6% and elevated house prices that have barred homebuyers from the market.

• However, Olsen suggested three ways to generate positive cash flow in real estate investments.

• Firstly, Olsen suggested adopting a buy-and-hold strategy that would help build equity while riding out the market's tumultuous times.

• Secondly, she urged investors to purchase cash-flowing properties with good rental returns.

• Thirdly, Olsen advised investors to purchase properties with potential appreciation value in locations that could become future hotspots.

A SCOOP OF MARKET DATA

The U.S. Housing Market Has Bottomed Out

The US housing market has shown signs of stabilizing, with a slight increase in home prices in February, according to real estate data firm CoreLogic.

More

• After seven consecutive months of home price declines, the firm says the national home price bottom has been reached, with home prices rising by 0.8% in February, double the historical month-over-month increase.

• The firm is predicting that home prices will continue to rise, by 3.7% between February 2023 and February 2024, although some analysts, such as Fannie Mae and Moody's Analytics, are forecasting falls.

• Selma Hepp, chief economist for CoreLogic, has highlighted the regional disparities in the US housing market, with gains in the Southeast and South reflecting strong job markets, in-migration patterns and relative affordability due to new home construction.

• In contrast, declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply.

A SCOOP OF LOTTERY

Housing Lottery Alert

A new housing lottery in Manhattan Valley, New York City, is offering three two-bedroom apartments for just under $315,000 to qualifying applicants.

More

• The apartments are located at 107 West 105th Street, a newly renovated HDFC co-op building, and will be available for occupancy in June.

• To be eligible, applicants must be prospective first-time homebuyers looking to occupy the space as their primary residence.

• The income requirements are based on household size, with each unit accommodating between two and five occupants.

• Eligible collective incomes must fall between $102,000 and $158,510, with a collective asset limit of $249,169.

• The estimated sale price for each unit is $314,383, with a monthly carrying cost of $3,075 and a minimum down payment of 5%.

• The lottery will be open until May 1, and applicants can visit the NYC Housing Connect website to learn more and apply.

How was today's shake?

Send us your feedback, ideas, love at [email protected]