TheMReport — News and strategies for the evolving mortgage marketplace.
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44 | M R EP O RT 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 ORIGINATION Active Listings Fall to All-Time Low A Q4 market report reveals the state of median home prices, pending home sales, new listings, and more. F or the four-week period ending February 7, Redfin reported that median home prices increased 15%, pending home sales were up 29%, and new listings fell 11% from the same period a year earlier. The median home sale price increased to $318,750 and ask- ing prices on new listings hit an all-time high of $334,770, which is 10% higher than last year. "In a typical year, asking prices do not surpass the previous year's peak until March," researchers noted. Active listings fell 37%, and 52% of homes had an accepted offer within two weeks of going under contract. That's "well above" 43% seen a year ago, researchers said. Also, Redfin reported, "This is the first time the four-week aver- age has surpassed 50% since at least 2012 (as far back as Redfin's data for this measure goes). For this period, the rate was 57%." The seasonally adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other services from Redfin agents—was up 63% from the same period a year ago, ac- cording to the Q 4 report. Mortgage purchase applications decreased 5% week over week (seasonally adjusted) and were up 17% from a year earlier (unad- justed) during the week ending February 5. For the week ending February 4, 30-year mortgage rates were unchanged at 2.73%. "There is a serious lack of new listings, and although prices are through the roof, homeowners are reluctant to sell, because it's so hard to buy again unless you are moving to a less expensive area where you can afford to outbid other buyers," Redfin Chief Economist Daryl Fairweather said. "Sellers who are concerned about finding their next home are asking buyers for a rent- back agreement, which allows the seller to stay in the home until they can move into their next one. Offering a rent-back agreement can also be a winning strategy for buyers with flexible timelines." Shifts in Mortgage Lending Standards Economists say credit availability growth "coincides with a housing market that is poised for a strong start to the year." L ending standards overall loosened during January, the Mortgage Credit Avail- ability Index (MCAI) from Mortgage Bankers Association (MBA) and Ellie Mae indicates. A decline in the MCAI indi- cates that lending standards are tightening, while increases in the index are indicative of loosening credit. The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.). The MCAI rose by 2% to 124.6 in January. The Conventional MCAI increased 4.8%, while the Government MCAI decreased by 0.1%. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 2.2%, and the Conforming MCAI rose by 7.7%. "The growth in credit availability in January coincides with a housing market that is poised for a strong start to the year. Improvements were driven by the conventional segment of the mortgage market, as lenders added ARM loans with lower credit score and higher LTV re- quirements," said Joel Kan, MBA's AVP of Economic and Industry Forecasting. "Despite ARM loans accounting for a very small share of loan applications in recent months, lenders are likely looking ahead to a strong homebuying season by expanding their prod- uct offerings." Added Kan, "Ongoing strength in home-purchase applications and home sales continue to signal robust housing demand, even as low housing inventory remains a constraint. However, even with overall credit availability pick- ing up in three of the past four months, credit supply is still at its tightest level since 2014." The Total MCAI has an expanded historical series that gives perspective on credit avail- ability from the last 10 years. It was created to provide historical context to the current series by showing how credit availability has changed, including during the housing crisis and ensuing recession.