Mortgage lenders are spending more and making less $$$

A greater share of lenders are now expecting profit margins to decrease next year, according to Fannie Mae’s Q4 2020 mortgage lender sentiment survey.

Only 19 percent of those responding to the survey think their profit margins will increase, one-third expect no change while 48 percent are looking for a decline. In the third quarter survey, 48 percent were expecting their profits to grow. Fannie Mae says this is a change from the prior six quarters in which lenders indicated increasingly optimistic profitability expectations.

Lenders, however, reported that consumer demand remained strong in the fourth quarter for all loan types. The rub here is that the MBA also reported that total loan production expenses – commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations – increased to $7,452 per loan in the third quarter, up from $7,138 per loan in the second quarter. From the third quarter of 2008 to last quarter, loan production expenses have averaged $6,566 per loan.

This means lenders are spending more and making less $$$ per loan, on average.

Demand for purchase mortgages set a new survey high for GSE-eligible loans and a new fourth-quarter survey high for government loans. Looking ahead, purchase mortgage demand expectations fell compared to the prior quarter but reached new highs for any fourth quarter in the survey's history. For refinances, lenders reported that consumer demand fell on both a looking-back and looking-ahead basis across all loan types but generally remains strong.

“Moving into 2021, lender sentiment paints a more cautious picture, aligning neatly with our recently reported consumer-side sentiment expectations, which appear to have plateaued, and supporting our forecast for a more modest pace of housing growth,” said Fannie Mae Senior Vice President and Chief Economist Doug Duncan. “The resurgence of COVID-19 cases and uncertainty around the economic recovery path pose risks to the pace of housing growth.”

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Here’s what’s annoying about the COVID-19 vaccine

Distribution of the COVID-19 vaccine has begun. That’s the good part. The bad news is that it will take time to get it to everyone, which means at least one co-worker will get it and bother you until you do.

“Did you get your vaccine yet? Did you get your vaccine yet?” So annoying, amirite? In that case, here are three tricks to dealing with an annoying coworker.

Also, there is about one-third of the population that is declaring they won’t get the vaccine at all. So say you’re a big fan of getting vaccinated and your co-working sitting right next to you feels being forced to get the shot is an infringement on their freedoms. AWKWARD.

This is creating an interesting simulation for employers. What should bosses do about the vaccine? According to Reuters, U.S. workers could soon face choices such as free COVID-19 shots and a cash bonus if all get immunized, or those unwilling to be vaccinated get reassigned or even lose their jobs.

What does the law say? Private employers could set up mandatory vaccinations so long as they offer accommodations to workers with religious and medical conditions that would exempt them, said Sarah Mitchell Montgomery, a partner at Jackson Walker LLP advising corporate clients. The direct threat posed by the COVID-19 pandemic will allow mandatory programs to win approvals soon, she believes.

So, it’s ultimately up to each employer to determine how to best tackle the vaccination of workers.

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Latest COVID-19 numbers and colder weather haven’t chilled homebuyer appetite

The latest Redfin economic figures show that homebuyers, unfazed by the cold weather and worsening  pandemic, are still out looking for homes.

Median home sale price increased 15% year over year to $322,000, the highest on record during the 4-week period ending December 6, according to Redfin.

Pending home sales were up 31% year over year. Even though many more homes are selling than last year, sales are still experiencing a seasonal cooldown and have declined 25% since early October. In the single week ending December 6, pending sales were up 29% from the same week a year earlier.

For the week ending December 6, the seasonally adjusted Redfin Homebuyer Demand Index—based on tour requests and requests for service from a Redfin agent—was up 37% from pre-pandemic levels in January and February. The fact that this measure has held relatively steady since July indicates that there is no shortage of people interested in buying homes, but a decline in the number of listings may be depressing actual sales.

“The problem is, there aren’t enough homes for sale,” said Redfin chief economist Daryl Fairweather. “With buyers this eager now, I expect the housing market will really pop immediately after New Year’s Day, especially as more homeowners decide to list.”

Here’s another factor that could impact home prices next year. Fitch Ratings said in a report last week that inaction on the part of Congress would threaten home prices even further. The rating agency is projecting prices to grow between 1% and 3% in 2021 and 2022 but said if Congress failed to approve another stimulus package, home prices could flatten. borrowers who are

That could push borrowers who are unemployed, facing additional financial pressure when their current relief expires, to sell their homes. If that happens in large enough numbers, the nation’s supply of homes for sale will grow considerably, correcting the imbalance seen in the market today with demand.

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