Volume 111 | October 6, 2022

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.

From the General

Counsel's Desk

FHA solicits feedback on the rare small-balance mortgage

The Federal Housing Administration (FHA) on Tuesday issued a request for feedback from the public on how it can increase access to small balance mortgages through its single-family mortgage insurance programs. 

The Department of Housing and Urban Development (HUD) back in April said it would be taking a hard look at small balance mortgages, which typically have balances less than $200,000 and are hard to find.

Total mortgage application volume fell 14.2% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

Refinance volume, which is most sensitive to weekly interest rate moves, dropped 18% for the week and was 86% lower than the same week one year ago.

Mortgage applications to purchase a home fell 13% for the week and were a steep 37% lower year over year.

Mortgage activity slowed for the seventh time in the past eight weeks, as Hurricane Ian added further downward pressure on already falling national demand, according to the Mortgage Bankers Association.

The MBA's Market Composite Index, a measure of loan activity based on surveys of association members, fell a seasonally adjusted 14.2% for the week ending Sept. 30, a seven-day period dominated by news of the hurricane devastation in Florida. Weekly activity came in 68% below its level from the same week one year ago.

"Mortgage rates continued to climb last week, causing another pullback in overall application activity, which dropped to its slowest pace since 1997," said Joel Kan, MBA's associate vice president of economic and industry forecasting, in a press release.

Americans More Fearful of Home Prices than a Recession

Personal Capital’s new survey has found the rising price of homes is more worrisome than a pending recession to many Americans. Home prices are up 14% year-over-year in August, and one-in-four people say they’ve decided to delay purchasing a home indefinitely. Gen Z is most likely to delay home ownership. The study found more than 75% of Americans predict a recession within two years, although interest rates were the top homebuying concern among respondents. 

Interest rates are at their highest levels since 2008 (5.89%) and double what they were last year. This results in mortgage payments several hundred dollars more than for the same loan a year ago.

CoreLogic’s Loan Performance Insights Report for July 2022 has found that for the month of July 2022, 3% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure), representing a 1.2-percentage point decrease compared to 4.2% in July 2021.

The data in this report accounts for only first liens against a property and does not include secondary liens. The delinquency, transition and foreclosure rates are measured only against homes that have an outstanding mortgage. Homes without mortgage liens are not subject to foreclosure and are, therefore, excluded from the analysis.

Mortgage Rates Drop For First Time In 6 Weeks—But Housing Market Downturn Could Last Several Years, Wells Fargo Warns

Despite mortgage rates falling for the first time since mid-August, experts are warning the higher borrowing costs that have tanked the housing market this year could stick around for at least another year—and perhaps even longer, depending on how the Federal Reserve’s battle against inflation pans out in the coming months.

Mortgage rates are on the rise, but that doesn’t mean retirees can’t take advantage of mortgage options for seniors, allowing them to downsize, purchase a second property, or take advantage of their home equity to pay off debt or make home improvements. 

While there are plenty of senior mortgages, it’s important to consider your financial situation.