Volume 157 | October 13, 2023

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.

U.S. Foreclosure Activity Shows Continued Rise In Third Quarter, Approaching Levels Seen Before Pandemic

ATTOM, a leading curator of land, property, and real estate data, released its Q3 2023 U.S. Foreclosure Market Report, which shows there were a total of 124,539 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — up 28 percent from the previous quarter and 34 percent from a year ago.

The report also shows there were a total of 37,679 U.S. properties with foreclosure filings in September 2023, up 11 percent from the previous month and up 18 percent from September 2022.

Lenders started the foreclosure process on 68,961 U.S. properties in Q3 2023, down 1 percent from the previous quarter but up 3 percent from a year ago — nearly reaching pre-pandemic levels.

Foreclosures Continue To Surge:

Are They a Threat to the Housing Market?

Is this a repeat of the

2008 housing bust?

The number of homeowners hit with foreclosure notices in the third quarter of the year jumped 34% from a year ago to nearly 125,000, according to a recent report from real estate data firm ATTOM. They were up 28% from the previous quarter.

Across the country, about 1 in every 1,121 properties had a foreclosure filing in the third quarter. That’s a return to almost pre-pandemic levels as foreclosure moratoriums put in place in the early days of COVID-19 have expired.

Filings included default notices, scheduled auctions, and bank repossessions.

“Foreclosures are on the rise again,” ATTOM CEO Rob Barber said in a statement. “It’s evident that some homeowners are still grappling with the pandemic’s financial aftermath or encountering new challenges.”

About 11,000 homes were repossessed in the third quarter, representing a 5% jump from a year ago.

84% of Americans polled in Fannie Mae's National Housing Survey said it was a bad time to buy a home, and most weren't expecting mortgage rates to come down anytime soon

A record 84 percent of Americans polled by mortgage giant Fannie Mae in September thought it was a bad time to buy a home, and most didn’t think their biggest concern — elevated mortgage rates — will be alleviated anytime soon.

“Mortgage rates persistently over 7 percent appear to be deepening the malaise consumers feel about the home purchase market,” Fannie Mae Chief Economist Doug Duncan said in a statement Monday. “In fact, high mortgage rates surpassed high home prices as the top reason why consumers think it’s a bad time to buy a home, a survey first.”

Only 17 percent of households polled for Fannie Mae’s latest National Housing Survey thought mortgage rates would come down in the next 12 months, and fewer than one in four (23 percent) said they expected home prices to come down during the same period.

Trade Groups Call Upon Fed to Curb Rate Hikes

Leadership from the Mortgage Bankers Association (MBA), National Association of Home Builders (NAHB), and National Association of Realtors (NAR) have sent a joint letter to the Honorable Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, regarding the housing industry’s concerns over the negative market impacts that the Fed’s monetary policy actions, including rate hikes and quantitative tightening, are having on the market.

The letter urges the Fed to make two clear statements to the market:

• That the Fed no longer contemplate any further rate hikes; and
• That the Fed not sell off any of its MBS holdings until and unless the housing finance market has stabilized and mortgage-to-Treasury spreads have normalized.

Mortgage Rates Rise for Fifth Consecutive Week

For the fifth straight week, Freddie Mac has reported a steady rise in the 30-year, fixed-rate mortgage (FRM), as the latest Primary Mortgage Market Survey (PMMS) shows the 30-year FRM averaging 7.57%, up eight basis points over last week’s average of 7.49%. A year ago at this time, the 30-year FRM averaged 6.92%.

Also rising this week was the 15-year FRM, which averaged 6.89%, up 11 basis points from last week’s reading of 6.78%. A year ago at this time, the 15-year FRM averaged 6.09%.

Sheila Bair, who had a front row seat to the subprime mortgage meltdown, is worried today’s housing market is unsustainably hot.

The median home price of an existing home stood at just $278,200 in August 2019, according to the National Association of Realtors. That figure has since spiked to $407,100 as of August 2023.

“Talk about a bubble. That’s a classic supply-demand imbalance,” Bair told CNN in a phone interview.

Bair, who served as a federal regulator when the mid-2000s housing bubble popped, nearly taking down the entire financial system, said home prices today are “bubbly” following years of rock-bottom mortgage rates.

A housing bubble can form when prices rise to unsustainable levels. This can be caused by speculative buying, as was the case during the sub-prime mortgage crisis when people who could not make the monthly payments on their mortgages were buying homes with very little money down. The bubble popped when home prices dropped and many people owed more on their home than it was worth.