Guardian Asset Management
Weekly Newsletter
Guardian endeavors to provide you with the latest in housing, industry and market news from Washington D.C. and around the country. It is our goal as your industry partner to be informative, relative and topical.
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From the General
Counsel's Desk
Housing affordability 'is the worst it's ever been,' analysts say
Homebuyers are facing the worst affordability conditions, according to two analysts who expect the housing market will get harder to break into this year.
"Affordability from a home price/down payment perspective is the worst it's ever been, meaning extreme barriers to entry," according to a BofA Global Research note by BofA Securities U.S. Economist Alexander Lin and BofA Securities U.S. and Global Economist Jeseo Park.
Still, “consumers remain steadfast in their interest to buy, but are uncertain," the analysts wrote.
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Lou Salerno, Esq.
General Counsel
LSalerno@GuardianAssetMgt.com
267-252-6282
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This Is the Most At-Risk Housing Market in America |
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The housing market in America has not been this healthy in decades, if ever. The carefully followed S&P Case-Shiller housing price index showed that home prices increased almost 19% in December, which was close to a record in the history of the index. In some cities, that figure was closer to 30%.
Not all places in the U.S., however, are enjoying a healthy housing market, and some have been negatively affected by the pandemic. The most at-risk housing market in America is Sussex County, New Jersey.
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First-mortgage default rate rises to 11-month high |
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In February, the number of primary mortgages that went into default for the first time rose at the highest rate seen in nearly a year, according to Standard & Poor’s Dow Jones Indices and Experian.
The balance-weighted first-mortgage default rate increased to 0.34% from 0.31% the previous month, which marks the highest point it’s reached since March 2021, when it was 0.37%.
The second-mortgage default rate rose even more, to 0.39% in February compared to 0.30% the previous month, following an unusual period in which it actually dipped below the first-lien rate multiple times. The second-lien default rate was last this high in April 2021, when it was 0.41%.
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Here’s what the Fed’s rate hike means for borrowers, savers and homeowners |
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The central bank just announced the first rate hike in three years, and that means consumers will see their borrowing costs rise, as well.
Here’s how that could impact your monthly expenses.
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CFPB issues warning to mortgage servicers on Homeowner Assistance Fund |
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While strongly encouraging mortgage servicer participation in Homeowner Assistance Fund programs, a supervisory official at the Consumer Financial Protection Bureau has laid out specific responsibilities for those that do, and warned that related activity will be monitored closely.
The bureau’s heightened review of mortgage servicing will focus on "complaints about challenges working with servicers to use HAF funds,” Lorelei Salas, assistant director for supervision policy, said in a blog Monday.
“Servicers should review their existing policies and procedures to ensure that borrowers are not improperly referred to foreclosure, for example, especially while a servicer is working with a borrower during the HAF application process or waiting for payment of HAF funds,” said Salas.
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Mortgage demand falls as interest rates surge to multiyear highs |
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A sharp jump in mortgage rates last week soured demand from both current homeowners and potential homebuyers, causing mortgage applications to drop. With rates now back on the expected upward trajectory, following a brief drop at the start of the Russian invasion of Ukraine, mortgage volume is likely to fall further in the coming weeks. |
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Homebuilders’ sales expectations drop dramatically,
as mortgage rates soar
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Builder sentiment in the market for single-family homes dropped 2 points to 79 in March on the National Association of Home Builders/Wells Fargo Housing Market Index.
While current sales conditions fell 3 points to 86, sales expectations in the next six months declined a steep 10 points to 70. The index doesn’t often see such large monthly moves.
Builders have long cited building material supply side constraints and rising construction costs as headwinds, but now the expectations of higher interest rates are hitting them harder.
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Single-family rent prices are surging at a record rate, led by homes in Sun Belt cities like Miami and Phoenix |
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Demand for single-family rental homes is soaring, pushing prices to record highs, as Americans continue to want larger homes with outdoor spaces.
Single-family rents gained a record 12.6% year over year in January, according to a new report from CoreLogic. That compares to an increase of 3.9% in January 2021.
Every major market saw increases, but cities in the Sun Belt saw truly stunning numbers.
For example, single-family rents soared 38.6% in Miami, up from just 2% the previous January. Orlando, Fla., and Phoenix were next in line, with gains of 19.9% and 18.9%, respectively, as Americans continued their migration to warmer parts of the nation. The Washington, D.C., area saw the lowest annual growth in rent prices — but they were still up 5.6%.
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Navigating the Housing Market Frenzy |
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According to a new report from Redfin, some 60% of homes that went under contract during the four-week period ending March 6 found a buyer within two weeks—an all-time high—which appeared around the same time as supply declined to a new low. |
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