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M R EP O RT | 41 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 Soaring Prices Force Prospective Vacation- Home Buyers to Reconsider After nearly a year of surging activity, interest in vacation and second homes has tailed off for the second consecutive month, falling 21% YoY. A new report from Redfin has found that demand for second homes fell 21% year over year in July, marking the second consecutive month of annual declines in mortgage-purchase locks, following 13 months of surging activity in second-home purchases. Demand for primary home purchases fell by 4% year over year in July, marking the first time the growth rate for second- home demand fell behind that of primary homes since April 2020. Soaring home prices is forcing some prospective second-home buyers to reconsider their plans. As of June, home prices were up 25% to record highs, but have since begun to plateau. Mortgage rates remain below the 3% mark, setting the table for second-home buyers to lock into rates that sit at all-time lows. "There is a general migration pattern toward southern, south- western, and mountain states," said Chris Stroud, HouseCanary Co-Founder and Chief of Research. "While these themes were present before COVID-19 hit the U.S. in spring 2020, they have significantly accelerated as the pandemic has altered the way many Americans work and live." HouseCanary recently found that regionally, some metros have seen more intense surges than others, as the median home price in Boise, Idaho, for example, jumped nearly 13% in the first half of 2021, from $410,100 in December 2020 to $463,383 in June, a nation- wide high. "Demand for second-homes remains well above pre-pandemic levels, and we can expect the high level of interest in vacation homes to persist in the new era of remote work," said Taylor Marr, Lead Economist at Redfin. "Builders have responded to this increased interest by putting more resources into building homes and less into hotels and lodging. If you build it—amid a historic housing shortage—they will come. I expect vacation homes to remain popular as more homes are built." As vaccinations have become more prevalent and more return to the office, the need for hybrid work situations has waned. The National Association of Realtors' (NAR) 2021 Vacation Home Counties Report, found a spike in the vacation home market from the second half of 2020 and through April 2021. That same report found that in 2020, the share of vacation home sales to total existing-home sales increased to 5.5% (5% in 2019). Vacation home sales rose by 16.4%, outpacing the overall growth in existing-home sales of 5.6%. From January to April 2021, the share of vacation home sales to total existing-home sales rose to 6.7%. Vacation home sales jumped 57.2% year over year compared to the 20% year-over-year growth in total existing-home sales. Angel Oak Exceeds $10 Billion in Lifetime Non-QM Production Lender hits milestone achievement via nontraditional lending offerings catering to freelance and nontraditional employees. T he Angel Oak lending platform—comprised of non-qualified mortgage (non-QM) lender Angel Oak Mortgage Solutions and retail mortgage lender Angel Oak Home Loans—has announced these enti- ties have funded more than $10 billion in non-qualified mortgages since their founding, consisting of more than 26,000 loans funded. "As the mortgage industry continues to strengthen post COVID-19, non-QM will keep expanding as a key market sector, and we plan to continue being at the forefront of that growth," said Mike Fierman, Managing Partner and co-CEO for Angel Oak Companies. "The pandemic taught our firm so much, and we have truly emerged as a better company. Crossing the $10 billion milestone is a testament to our success and commitment in this space." With freelance and nontra- ditional employment becoming more commonplace, an estimated 50 million Americans are turning to nontraditional work, whether it's starting their own businesses, freelancing, or being part of the gig economy (with companies like Uber, Airbnb, etc.). Angle Oak's non-QM offerings are assisting more of this popula- tion on the path to homeowner- ship, with the company having achieved more than $700 million in non-QM origination over the two-month span of June and July of 2021 alone, surpassing June and July 2019 volume levels by 38% collectively. Angel Oak lending companies have returned to pre- pandemic-level monthly volumes. In tandem with this growth, the lending platform has increased their head count by 67% year over year across a variety of roles. To facilitate this growth, Angel Oak Home Loans opened 17 new retail branches nationwide since the start of 2020, bringing the total number of retail offices to 44 nationwide. The Angel Oak Mortgage Solutions team has added more than 30 AEs nation- wide in 2021 alone to help educate brokers and correspondents on the power of non-QM. "Our success would not have been possible without the skills and dedication of our grow- ing team," Fierman noted. "The mortgage industry, at its core, is a business about people—provid- ing homeowners with the right solutions, connecting originators with new opportunities, and ensuring that the Angel Oak mis- sion is present in all of our team's practices. Our team has paved new roads for non-QM, which has helped us cross the $10 billion threshold, and will continue to support our company moving forward. We fully expect to con- tinue this momentum and foresee August being our largest month ever to date."