Here’s a snapshot of the latest mortgage activities and revised forecasts at the end of 2021.
Fannie Mae Boosts 2021 and 2022 Forecasts
Due to a stronger than previously forecast year-end finish, Fannie Mae boosted its outlook for mortgage originations for both 2021 and 2022.
Fannie’s December forecast indicates that 2021 will end with a record high of $4.45T in mortgage originations.
Fannie increased its 2022 forecast to $3.35T from its earlier forecast of $3.26T.
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Share of Houses with Multiple Bids Fell to 59.9% in November
The share of houses with bidding wars dropped to 59.9% in November. The last time multiple bids on for-sale homes were this low was in December of 2020 when bidding war competitions stood at 52.9%. A full one year ago, the share of homes with multiple bids was 55.9%.
Finally, exhausted homebuyers got a bit of a break.
Loan Applications for New Home Purchases Dropped -2.2% y/y in November
Consumer applications for purchase loans with home builders fell -2.2% y/y in November, according to the Mortgage Bankers Association. The share of applications submitted for conventional loans climbed to 76.3% in November from 75.7% in October
On the other hand, the new-home market has had a record-setting year in 2021. The average loan amount in November was $414,114 and the seasonally adjusted annual rate of new-home sales was 905,000.
The MBA’s associate vice president of economic and industry forecasting Joel Kan said, “A competitive purchase market, combined with increased building materials costs have been pushing sales prices higher. There also continues to be a shift to the higher end of the market, which is…contributing to the higher loan amounts.”
Home Equity Offerings Predicted to Take Off in 2022
Homeowners are likely to take advantage ofWith record-setting tappable home equity that resulted from increased home prices.
Jeff Taylor, managing partner with the mortgage processor and risk compliance consulting firm Digital Risk, said, “The biggest trend that I’m seeing is that 2022 will be the biggest year for home equity accounts opened in the history of the mortgage market.”
Dale Baker, president of home lending with KeyBank, also sees that home equity lines of credit (HELOCs) and junior lien home equity loans will “come back into vogue.”
Likewise, housing starts hit an eight-month high. Could this mean that inventories of new homes could improve in the coming months?
Thanks to National Mortgage News.