TheMReport — News and strategies for the evolving mortgage marketplace.
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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 Monthly Home Prices Dropped in October "Following the recent mortgage rate surge above 7%, real estate activity and consumer sentiment regarding the housing market took a nosedive," said Selma Hepp, Interim Lead of the Office of the Chief Economist at CoreLogic. A head of the Federal Reserve's Federal Open Market Committee Meeting December 13-14, CoreLogic announced the release of its latest Home Price Insights report (HPI) covering October 2022 along with forecasts for 2023. CoreLogic's report is designed to provide an early indication of home price trends at the national, state, and metropolitan levels and has 40 years of data to compare to current trends. On a national level, home prices (including distressed sales) increased on a yearly basis by 10.1% in October 2022. On a monthly basis, the HPI declined by 0.1% in October 2022 compared to September 2022. Home prices also cooled to levels last seen in 2021 due to mortgage rates, but low inventory will still prop prices up. Home price acceleration is projected to decline steadily until next spring when the market could post some annual losses, but then will slowly tick back into single digits as the rest of the year progresses. "Following the recent mortgage rate surge above 7%, real estate activity and consumer sentiment regarding the housing market took a nosedive," said Selma Hepp, Interim Lead of the Office of the Chief Economist at CoreLogic. "Home price growth continued to approach single digits in October, and it will move in that direction for the rest of the year and into 2023." "However," Hepp continued, "while some housing markets have seen significant recalibra- tion since the spring price peak and are likely to post losses in 2023, further deteriorating for-sale inventory, some relief in mort- gage rate increases and relatively positive economic news may help eventually stabilize home prices." Top Takeaways: • U.S. home prices (including distressed sales) increased 10.1% year over year in October 2022 compared to October 2021. On a month-over-month basis, home prices declined by 0.1% compared to September 2022. • In October, the annual appre- ciation of detached properties (10.1%) was 0.3 percentage points higher than that of attached properties (9.8%). • Annual U.S. home price gains are forecast to slow to 4.1% by October 2023. • Miami posted the highest year- over-year home price increase of the country's 20 largest metro areas in October, at 22.6%, while Tampa, Florida, retained the No. 2 slot at 20%. • Florida and South Carolina recorded the highest home price gains: 20.2% and 16.1%, respectively. Georgia and North Carolina tied for third, with 15.3% year-over-year increases. Washington, D.C., ranked last for appreciation at 0.2%. this population. » Since 2008, Hispanic Americans have seen a steady increase in mortgage approval fairness, from 77.7% to 87.7%. » Hispanic mortgage appli- cants, in contrast to Black applicants, tend to experience higher approval rates for mortgages in communities where they make up a larger percentage of the overall population. • Asian mortgage applicants: For Asian homebuyers, the fair- ness story continues to remain positive. Asian Americans had fairness parity with white mortgage applicants in 1990 and have consistently maintained comparable levels of mortgage approvals to white applicants. Many government programs intended to increase homeown- ership and financial inclusion have been put in place since 1990. Financial regulators have 30 years of additional enforce- ment of fair lending laws. The Consumer Financial Protection Bureau (CFPB) has emerged on the regulatory scene and has con- ducted multiple supervision and enforcement actions related to fair lending in the mortgage market. This 30-year period also coincides with the introduction of modern credit scores. Despite these regula- tory efforts at removing bias from lending, progress has clearly been uneven, with particularly trou- bling data for Black and Native American borrowers. "Despite decades of government intervention and the growth of high-priced consultancies devoted to fair lending practices, there is clearly much work to be done," FairPlay CEO/Founder and report co-author Kareem Saleh said. "It's time for policymakers, regulators, and lending institutions to admit that our efforts to reduce bias in mortgage lending have not moved the needle. If we want to extend the American Dream to histori- cally underrepresented groups, we must start encouraging new approaches to lending fairness."