Another bank bites the dust

👋 Welcome back to Mortgage Nuggets, your safe haven from biased news. Today's newsletter is 782 words, a 3-minute read. Let’s dive in…

1. Fannie Mae: 85% of consumers say it’s a ‘bad time’ to buy a home

Consumer sentiment on the U.S. housing market is stalled by concerns over affordability and inflation, according to Fannie Mae's Home Purchase Sentiment Index® for October.

Despite more people feeling secure about jobs and incomes, 78% feel the economy is veering off course, mainly due to inflation. This is a 7% increase from last month.

• Buying a home is now considered a bad move by 85% of respondents, a survey record, largely because of steep home prices and mortgage rates. Conversely, only 37% think it's a bad time to sell.

Overall, the full index is up 8.2 points from its all-time low last year. LINK

2. Charted: The biggest lobbying spenders in 2022

Defined: In politics, lobbying or advocacy, is the act of lawfully attempting to influence the actions, policies, or decisions of government officials, most often legislators or members of regulatory agencies, but also judges of the judiciary.

You might ask, what is the National Association of Realtors (NAR) lobbying for? Find out here.

3. Fed president: Underbuilding, not the Fed, broke the housing market

Minneapolis Fed President Neel Kashkari challenged the narrative that the Federal Reserve's interest rate policies are to blame for housing market woes.

Speaking with Bloomberg, he highlighted underbuilding as the core issue: "We have structurally underbuilt the number of units we need," Kashkari stated, citing local regulations as a barrier to increasing supply.

In the face of concerns that mortgage rates might lock a generation out of homeownership, Kashkari pointed out the equilibrium in market forces, "when people don’t sell their home because they’re locked into a low mortgage, that’s less [resale] supply, but that’s also one less buyer" He remained steadfast that the Federal Reserve's legacy would be marked by its assertive response to inflation, rather than housing market disruptions.

You can listen to the exchange here. Go to the 11-minute mark.

4. Catch up quick

📉 The mortgage market is so bad, some lenders want ex-employees to give back their bonuses. (The Wall Street Journal)

🏦 Citizens Bank of Sac City, Iowa, becomes the 5th bank to fail this year. The $66 million asset entered receivership of the FDIC on Friday and was then acquired by Iowa Trust & Savings. (Banking Dive)

🧭 Compass trims losses in Q3. The brokerage saw revenue fall 10 percent year over year, but also managed to cut net losses from $154 million in the third quarter of last year to $39 million this Q3. (Press Release)

🏡 Private-equity giant TPG has started buying single-family homes in Florida vacation markets, where it is renting them out nightly as alternatives to hotels and short-term rentals on websites like Airbnb. (WSJ)

5. Will the Fed raise rates again this year? Markets say no.

Financial markets seem increasingly sure the Federal Reserve won't raise rates at its next few meetings.

Odds derived from prices in the Fed Funds futures market show traders think there's a roughly 90% probability that the Fed leaves its target rate — now 5.25%-5.5% — untouched at its next meeting on Dec. 13.

The increased certainty follows the central bank's decision last week to leave rates alone, with chair Jerome Powell sounding optimistic about the economy. That decision was bolstered by a welcome slowdown in the labor market reported on Friday.

The market is now narrowly predicting a first 25 basis point cut from the Fed on May 1, 2024, according to CME Group’s FedWatch tool, with 100 basis points of cuts now expected by the end of next year.

6. Duo indicted for mortgage fraud

On Monday, a New Jersey grand jury indicted a father and son from Bergen County for mortgage fraud. The duo defrauded investors and mortgage lenders of more than $2.5 million through an investment scam involving Jersey Shore real estate.

George Bussanich Sr., 65, of Park Ridge, New Jersey, and George Bussanich Jr., 43, of Upper Saddle River, New Jersey, were indicted on charges of conspiracy, theft, and money laundering in connection with the scam, involving the purchase and renovation of residential homes for the purpose of profitable resale, i.e., fix and flip properties. LINK

☀️ See you on Friday!

🧙 1 weird thing: It’s a good time to be a witch. The New York Times dives into the lucrative business of being a Witch on Etsy and TikTok.

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