MReport June 2017

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 63 SECONDARY MARKET THE LATEST 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 Latest Report Shows Drop in Buyer's Confidence Homebuyers feel it's a good time to sell but not a good time to buy. T he Home Purchase Sentiment Index (HPSI) released in April by Fannie Mae showed a March slump, after gains in the previous two months. "Home purchase sentiment gave back some of the gains accumulated over the prior two months that sent the index (HPSI) to its survey high in February,'' said Doug Duncan, SVP and Chief Economist at Fannie Mae. "Strong home price appreciation has turned into a double-edged sword for the housing market as it boosted the net share of consumers saying it's a good time to sell to a record high, surpassing the plunging good time to-buy- indicator for the first time in the history of the survey. "In addition, the net share of consumers who expect mortgage rates to rise over the next year exceeded that experienced during the 2013 taper tantrum," Duncan added. "However, the housing market could get some tailwinds from a seasonal rise in for-sale inventory, particularly as home sellers seek to lock in profits from recent rapid home price gains. The market could also get a boost from homebuyers who decide to jump into the market before rates rise further." The Fannie Mae survey polls 1,000 households and simply asks how they feel about owning or renting a home, the economy, finances, and other factors. All in all, the survey asks 100 questions designed to track shifts in at - titude. The findings are compared to the same monthly survey going back to 2010. Those who said it is a good time to sell increased by 9 percentage points to 31 percent. That is a sur - vey high for two straight months. High home prices were the most important reason for both the bad time-to-buy and good time-to-sell indicators, cited by 39 percent of consumers who said it is a bad time to buy (a survey high) and 24 percent of those who said it is a good time to sell. Americans who said that home prices will go up decreased by 1 percentage point in March to 44 percent. Those who foresee rising mortgage rates in the next year fell five percentage points, which is a survey low. Additionally, more Americans were concerned about losing their jobs; and in the March Fannie Mae survey, fewer reported a rise in household income. Conversely, Fannie Mae's first- quarter 2017 Mortgage Lender Sentiment Survey showed lenders, both big, small, and in between, felt hopeful about the economy and believe the economy is mov - ing in the right direction. This particular survey began in the first quarter of 2014, and those confi- dence levels are at their highest. New Homebuyer Assistance Available in the Manufactured Housing Market Freddie Mac is teaming with Next Step Network to provide homebuyers financial education and credit access for manufactured housing. F reddie Mac wants to help homebuyers become "mortgage-ready" starting in Kentucky, according to an announcement in April. The GSE is teaming up with Louis - ville-based housing intermediary Next Step Network and three nonprofit housing counseling agencies to implement an online education curriculum, with a focus on manufactured homes. The goal is to support access to credit and affordable lending for the manufactured homes segment of the housing market. Freddie Mac stated that manufactured homes are a crucial source of housing stock, and the average price of a manufactured home is $71,600, while the average price of a new single-family, site-built home is $373,900, according to the U.S. Census Bureau. Freddie Mac previously announced its partnership with Next Step in November 2016, with a plan to develop a consumer education curriculum for manufactured homebuyers called SmartMH, an energy- efficient manufactured housing initiative led by lenders, retailers, manufacturers, nonprofits, and public stakeholders. The program pairs participating buyers with one of three U.S. Department of Housing and Urban Development- approved housing counseling agencies: Community Ventures Corporation in Lexington, Kentucky; Frontier Housing in Morehead, Kentucky; or In Charge Debt Solutions in Orlando, Florida. The education curriculum will be offered through eHome America, an online homebuyer education platform. These agencies will provide assistance to potential homebuyers with blemished credit histories and offer homebuyer education and advice on strengthening their credit and navigating the finance and purchase processes. Several lenders are already participating in Next Step's SmartMH program, including Community Ventures, Credit Human Federal Credit Union, Frontier Housing, Forcht Bank, Kentucky Housing Corporation, and Key Mortgage Company. Freddie Mac and Next Step are in the process of seeking new lenders interested in making real property loans for energy-efficient manufactured homes.

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