Fannie Mae Archives

March 27, 2024April 25, 2024

Time for a Move? Sellers Are Perking Up.

Home sellers are back. It’s an important sign of confidence in the U.S. housing market.

Fannie Mae keeps tabs on people’s feelings (“sentiment”) about the market. And people are feeling better about it — if they happen to be potential sellers. Two-thirds of the people surveyed told Fannie Mae this is a good time to sell.

Then there are the would-be buyers. With the median U.S. listing price hovering close to $400K, just 17% of the survey’s respondents think now’s a good time to buy. Home buyers have to deal with elevated home prices and mortgage rates.

But spring is in the air. And springtime sellers are placing homes on the market. That’s pressing the number of 2024 mortgage applicants up, too.

January 12, 2024April 25, 2024

Buying a Home While Interest Rates Are Still High? The Case for “Yes”

For too many years, the U.S. housing market has been out of reach for too many people. But giving up might not be an option.

Those able to get a foothold in this market often do it to attain a viable financial future. A homeowner’s wealth goes up along with home values. So, owners accumulate home equity month by month. And property inflation helps them do it.

In this context, a recent NBC News segment featured financial advisers who urge people to become homeowners — in spite of the current high interest rates. From their perspective, not owning is unaffordable.

After all, the gap between the haves and have-nots of real estate widens with inflation. Fear of missing out, a.k.a. FOMO, is a totally reasonable response to this reality.

Or you can…

January 3, 2024April 25, 2024

What’s a “Scratch and Dent” Mortgage?

Last year, mortgage lending slowed to a crawl. So, the lending industry had some extra time on its hands. Fannie Mae and Freddie Mac took advantage of some of that extra time to go over the loans they purchased in the sizzling hot market of 2020-21. During those frenzied months, underwriters were under pressure to close high volumes of loans.

When the dust settled, Fannie and Freddie found plenty of loans whose underwriters missed some things, perhaps not thoroughly checking the borrower’s documents. These errors could lead to flawed estimates of a borrower’s risk.

With nearly $10 trillion of loans issued in the hot market, the number with defects adds up to some $25 billion. Fannie and Freddie can’t hold these bags. Their legal standards rule them out. So they send these hot potatoes back to the lenders.

December 13, 2023April 25, 2024

Fannie Mae Was Going to Save Mortgage Borrowers Thousands by Dropping Its Title Insurance Requirement. Never Mind.

The Biden administration was working with loan backers to delete title insurance charges from closing costs. The move would have saved quite a few home buyers hundreds or even thousands of dollars.

Noting that the plan had been silently scuttled, the Wall Street Journal said pressure against it came from “an obscure industry.”

The obscure industry is the real estate title insurance sector. It’s hardly obscure in our book. But the Wall Street Journal pointed to the industry’s small population. Only some 155,000 people reportedly work in the title and settlement sector.

In 2023, Fannie Mae was getting ready to test its planned phase-out of the title insurance requirement for mortgage borrowers. Evidently, the aforementioned industry wanted to save itself from further obscurity!

The title insurers pushed back. And Fannie Mae abandoned its test run.

October 30, 2023April 25, 2024

“Mortgage Companies Are Desperate”: What’s Next for Homes and Mortgages in 2024?

In February, Zillow said home prices had bottomed out. Was the market about to rally again?

Zillow predicted that U.S. home prices would climb at the healthy pace of 6.5%, from August 2023 to August 2024. Of course, home prices usually do go up over time.

Now, Zillow economists have slashed their predictions. Their new call? Expect U.S. property prices to be up only about 5% by the time we get to August 2024.

Meanwhile, Wells Fargo thinks most of the valuation gains homeowners made in 2023 will melt back down. And then we’ll go into 2024 with prices down almost 3% from the market’s 2022 peak.

Why so gloomy? It’s about the mortgage rates.

September 13, 2023April 25, 2024

Arizona and Florida Buyers: Now There’s a 1% Down Payment Option

Interest on a 30-year mortgage has topped 7%, bringing rates up to levels not seen since 2002. And with the prices of homes as high as they are right now, it’s harder to buy a home today than at any time in the past 40 years.

Prices will stay high because of demand for homes — that owners aren’t selling. Owners don’t want to jump back into today’s market. No surprise there!

Meanwhile, those overwhelmed by rising rents find it hard to save enough for down payments. To draw potential buyers into a market like this, mortgage companies are creating incentives. Zillow Home Loans LLC, Rocket Mortgage®, and United Wholesale Mortgage are all advertising new, 1% down payment mortgages.