MReport April 2020

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M REPORT | 53 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Refinances Stable in First Reading of 2020 Although COVID-19 has now introduced uncertainty, the year started out strong. E llie Mae's January Origi- nation Insight Report revealed that interest rates experienced a slight dip during the first month of 2020, falling from December's 3.99% down to 3.96%. Refinances during the month made up 46% of total closed loans—unchanged from the month prior. Conventional loan refinancing experienced a hike, rising from December's 53% posting to a few percentage points higher at 55%. In contrast, January's VA and FHA refinances declined slightly from December's showings. Another rise was reported by Ellie Mae, with its data showing that FICO scores on all closed loans in January rose just a tad from December: 735 to 738, respec- tively. Ellie Mae also reported that the time to close all loans remained at 48 days for the second-consecutive month. Regarding sealing the deal, the report revealed that borrowers and buyers can expect to pay more when closing, with closing rates on all loans experiencing an uptick to 78.2% in January versus the previous month's rate of 77.8%. Specifically, for purchases, the closing rate in January was 80.7%, while the clos- ing rate for refinances was 75.8%. "The start to 2020 saw interest rates decline and refinances hold steady, driving an increase in our closing rate to 78.2% in January," said Ellie Mae President and CEO, Jonathan Corr on the Origination Insight Report. Corr then proceeded to fore- shadow what such movement may mean moving forward into 2020: "All indicators show that we will continue to see a healthy housing market in 2020 as more millenni- als look to purchase homes and interest rates remain at historic lows driving refinance activity. We do expect 2020 to bring some chal- lenges for homebuyers, not because of what they can afford but rather what they can find due to lagging inventory." Share of Older Homeowners to Grow N umber of homes with people in their 80s forecasted to double by 2038. By 2038, there will be 17.5 million households in their 80s or older, which is more than double to 8.1 million recorded in 2018, accord- ing to Harvard's Joint Center for Housing Studies. Harvard also reports that these households will represent a larger share of all U.S. households, dou- bling from 6% in 2018 to 12% in 2038. The share of homes owned by someone aged 65 or older are either married couples living by themselves is at 37% and single homeowners in this category are at 42%. However, the share of home- owners over the age of 80 is 58%. Harvard reports that the number of homeowners in the oldest age group over the next 20 years is forecasted to grow from 4.7 million in 2018 to 10.1 million in 2038. The majority of older single-per- son homes are female, representing 74% of solo households over the age of 80 in 2018. Harvard said this trend is likely to continue over the next two decades. Also, single people in the oldest age group are more likely to pay for in-home assistance, while also having lower average incomes than their married counterparts. People over the age of 80 who live alone have an average income of $22,000 in 2018, compared to $51,700 for married couples. "Lower incomes make it more difficult to afford housing, and single-person households are indeed more likely to face housing cost burdens (paying more than 30% of one's income on housing) than those in other living situations," Harvard states in its report. Single homeowners over the age of 80 are more than twice as likely to face cost burden than married couples of the same age. Twenty- two percent of couples are cost- burdened—48% of single-person households are cost-burdened. Additionally, single homeown- ers of the oldest age group are more likely to rent their homes than married couples. Under half of the homeowners over the age of 80 are single, compared to 77% of renter households of the same age. A virtual summit on how COVID-19 is affecting the industry May 6, 2020 P A R T N E R S Join us May 6 for a one-day event featuring over 25 leading experts covering the operational challenges we face and the possible solutions for originations, government, servicing and vendor management. Full session titles, descriptions and speaker information available on our website. Sessions will include: Keynote: State of the Mortgage Industry, Based on the Impact of COVID-19 The Economist's Magic 8 Ball: What to Expect in the Next Year Lessons Learned: What the 2008 Mortgage Crisis Can Teach Us 4 Executive Roundtables: Servicing, Origination, Vendor Management, Business Continuity Planning Workforce Tetris: Lining Up Resources with Today's Needs Government Update: How Emergency Actions Are Impacting the Market Register today at THEFIVESTARINSTITUTE H O S T E D BY

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