MReport February 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 11 INDUSTRY SNAPSHOT By the Numbers From declining down payments to a cooling of the housing market, here are the trends defining the industry landscape in the early days of 2019. 1 Down Payment Downturn Only 43 percent of buyers nation- ally are putting down the traditional 20 percent or more on their first homes, according to a study by Zillow. "There are many mortgage options that require less than 20 percent down, but buyers should be careful that they don't set themselves up to be under- water," said Aaron Terrazas, Senior Economist at Zillow. 2 Unfair Housing A University of California, Berkeley, study entitled "Consumer- Lending Discrimination in the Era of Fintech" found that Latino and African- American borrowers pay between $250 million and $500 million extra in mortgage interest every year. On a $300,000 online mortgage applica- tion, that means an African-American or Latino applicant would need to pay around $2,000 more upfront in order to secure the same mortgage rate as a white applicant. 3 How Low Can They Go? TransUnion's 2019 Consumer Credit Report forecasts that delin- quencies will continue to drop in 2019, sliding from 1.62 percent at the end of 2018 to an estimated 1.45 percent by the end of 2019, continuing a down- ward year-over-year trend that has continued since 2010. 4 Older Americans, Increasing Housing Wealth According to the NRMLA/RiskSpan Reverse Mortgage Market Index, released by the National Reverse Mortgage Lenders Association, home- owners aged 62 years and older saw their housing wealth grow to $6.97 trillion in Q3 2018. 5 Over and Under CoreLogic Market's Conditions Indicators (MCI) reported that 35 percent of the nation's 100 largest metropolitan areas were overvalued, while 27 percent were undervalued, and 38 percent remained at value. "The rise in mortgage rates has dampened buyer demand and slowed home-price growth," said Dr. Frank Nothaft, Chief Economist at CoreLogic. 6 Cooling Off Fifteen percent of home listings saw price reductions in December 2018, according to a report by realtor. com. In addition, 19 of the top 45 metros saw properties spend more time on the market compared to December 2017. 7 With a T A Zillow study reported that the housing market has regained $10.9 trillion in value over the past six years, putting its total value at $4 trillion more than what it was at the peak of the housing bubble. Nearly one- third of the value gained during the nationwide housing recovery came from markets in one state—California. 8 The Gender-Gap Flip A LendingTree survey of the 50 largest metropolitan areas in the U.S. found that single women own nearly twice as many homes as single men do. On average, single women own 22 percent of homes in these metros, compared to less than 13 percent for single men. 9 Give and Take Housing inventory went up by 5 percent in November 2018, recording the fastest growth in three years, according to a report by Redfin. However, the same report revealed an 8 percent decline in sales. 10 Untapped According to Black Knight's Mortgage Monitor Report, total equity on mortgaged properties stood at $9.8 trillion in Q3 2018, $5.9 trillion of which was tappable. This represented a drop of $140 billion in tappable equity over Q2.

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