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Housing break; Lender competition; 7 million houses to go! 😱

By July 13, 2021 No Comments

Finally a (little) break as home listings rise and mortgage rates drop

We’re kicking off this morning with some good news! 

According to coverage in CNBC, new listings of homes jumped 4% in the four-week period ending July 4 compared with the same period one year ago, according to Redfin.

They were up 3% from the same time in 2019. It was the first time new supply topped pre-pandemic levels.

The number of active listings is still down 32% from a year ago, but that’s actually the smallest annual drop since early February. Active listings are now up 8% from their 2021 low in early March.

“Many buyers have backed away from the housing market and are waiting until more and better homes are listed,” said Daryl Fairweather, Redfin’s chief economist. “Buyers don’t have the same sense of urgency that they did at the beginning of the year. They aren’t racing to buy before prices increase, because asking prices have already increased and stabilized.”

A monthly housing sentiment survey in June from Fannie Mae found that 64% of respondents said it’s a bad time to buy a home, up from 56% in May. On selling, 77% of respondents said it’s a good time to sell, up from 67% in May.

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Most mortgage lenders expected increased competition from online, direct-to-consumer lenders

Jumping over to another piece of research by Fannie Mae!

As part of the most recent Fannie Mae Mortgage Lender Sentiment Survey special topic analysis, economists asked mortgage lenders about their lending institutions’ top business priorities for 2021. 

In a new Perspectives blog, Mark Palim, Deputy Chief Economist, and Li-Ning Huang, Market Research Advisor, share that lenders once again cited business process streamlining and consumer-facing technology as two of their top three priorities.

However, perhaps in part due to the impact of the pandemic and lenders’ need to adopt new workplace strategies and manage increasingly distributed workforces, talent management and leadership moved up to the second spot.

Among the findings: 

  • Business process streamlining remained the top priority for a plurality of mortgage lenders for the second consecutive quarter, while talent management surpassed consumer-facing technology as the second most important business priority.

  • Lenders’ business priorities appear to be consistent with their assessment of market threats and trends. Once again, most lenders cited “online direct-to-consumer lenders” as their biggest expected competitor over the next five years, followed by mortgage brokers. Many pointed to direct-to-consumer lenders’ advantages in user experience, streamlined mortgage processes, and advanced analytical and marketing capabilities.

  • Lenders commented that running a mortgage business requires highly experienced professionals, who are not only knowledgeable of processes and technology but also have the interpersonal skills to provide quality customer service. Lenders pointed to employee turnover as an ongoing challenge, along with a tight hiring market, an aging workforce, and the continued need to invest in training as their key challenges.

Click here to read the research report.

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People, people!!! Listen, we just need to build another 7 million houses to catch up!!!

Geez, that’s a big, daunting number. But there you have it.

According to a new report from the National Association of Realtors, the U.S. would need a whopping 6.8 million housing units to meet demand fully. 

It sounds wild, according to one investment journalist, but when you take into account the underproduction of new homes, rising household formation, and recent losses in housing stock, the shortage is not going away anytime soon.


Investment writer Aly Yale is covering the data for Millionacres, the real estate investment-focused website owned by The Motley Fool. 

In her coverage, she notes: “Of course, some areas have it worse than others. The South has been better with construction completions in the last decade, but other regions — particularly the Northeast and Midwest — have fallen woefully behind.”

New York has an underbuilding gap of nearly 150,000, while San Francisco‘s is over 113,000. It's not just big cities, though. Smaller markets like Grand Rapids, Michigan, and Modesto, California, have major shortages, too,” Yale writes.

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