MReport July 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 19 COVER STORY encouraging for buyers. "Homes are staying on the market longer, which means more inventory is available to choose from and there's less chance of a bidding war that pushes the sale price well above asking," she observed. "In addition, a higher share of list- ings have experienced a price cut, especially in the most-expensive third of homes for sale, as sellers look to find the new asking price sweet spot in a shifting market." The fact that investors have taken a lot of properties off the market and home builders are not adding a lot of new supply could add to the inventory woes, ac- cording to Kapfidze. Additionally, "affordability will remain a challenge for most buyers despite mortgage rates providing a mea- sure of relief," he said. However, a report by Freddie Mac forecast a steadily growing market in the second half of 2019. "We still expect stronger home sales and housing starts in the coming months due to favorable market conditions and accelerating wage growth," Khater observed in the report. Additionally, Freddie Mac pegged mortgage rates to average 4.1% during the year, for the 30- year fixed-rate mortgage slightly below last year's 4.6%. And the ongoing stable rates mean that consumer confidence in the hous- ing market is growing. Lending Right C onsumers' income perceptions, as well as their mortgage rate and home price outlooks, suggest improving affordability condi- tions," Palim said. Additionally, the fact that mortgage rates have remained low could help more homebuyers enter the market. "While there has been a slow- down in home sales and prices, the monthly payment remains affordable because mortgage rates remain fairly low," Khater said. According to the New York Fed, on average, households perceive that mortgage rates have risen about 40 basis points since last year and that the rate they would be offered has risen about 30 basis points. This percep- tion, however, was based on the change in rates through December 2018, but by February 2019 rates had returned to their February 2018 levels, the New York Fed survey revealed. Lenders are also taking advan- tage of the low rates to get more buyers involved in the mortgage process. According to Viars, the best way for lenders to help homebuyers is education. "There are many different types of mortgage loans available today as we are seeing the non-prime loans return to the market," he said. "Educating the buyers regarding their options and advising them on what type of loan might be right for their individual needs is more critical today than in the past, especially with the first-time homebuyer." Bryant listed a number of ways that Wells Fargo is work- ing towards achieving this goal. "Customers can apply for loans where, when and how they want—from the convenience of their kitchen table or in person with one of our home mortgage consultants," she said. "We're also taking the work out of the process for customers wherever we can by striving to collect more and more of the informa- tion needed for the application on their behalf, so they spend less time typing in information or col- lecting documents. As consumers demand more from lenders such as a smooth lending process, good information, and the ability to choose the way in which they work with their lender, Bryant observed that lend- ers were also going that extra mile to fulfill those demands. "Even as we invest in making the process easier, we believe many buyers—and especially first-time buyers—want help along the way," she said, giving an ex- ample of how the home mortgage consultants at Wells Fargo were helping customers to make the entire lending experience one that ended with a customer getting the keys to their new home. RADHIK A OJHA is a professional writer and editor specializing in the mortgage banking sector. She is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master's degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd covering the retail market and at Honeywell as an executive in corporate communications. "The retiree market has tended to be more consistent, fueled by a rising number of aging baby boomers looking to downsize and/or relocate to warmer climates and lower tax states. Buyers are value-focused in both cases and are moving quickly on homes priced at or below the median price in most rapidly growing markets." —Liz Bryant, Retail National Sales Manager, Wells Fargo Home Lending

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