Builder confidence remains unchanged in April

Plus: Fannie Mae, Freddie Mac will not count buyer agent commissions as IPCs

April 17, 2024

👋 Good morning, loyal readers. Today's newsletter is 762 words, a 3.5-minute read.

Disclaimer: Average mortgage rates as of Apr 16, 2024. © MND's Daily Rate Index.

1. Builder confidence remains unchanged in April

Builder confidence was flat in April, registering at 51, as mortgage rates remained close to 7% and inflation data remained slightly elevated through the first quarter of the year.

Last month marked the first time since July 2023 that the index surpassed the breakeven point of 50, reaching 51. The stagnation in the HMI (in April) broke a streak of four consecutive monthly gains. LINK

“With many frustrated buyers back on the fence waiting for interest rates to fall, policymakers can help ease affordability challenges by reducing inefficient regulatory rules that raise housing costs and limit supply,”

NAHB chairman Carl Harris

2. Housing starts declined 14.7% in March

In March, housing starts fell due to unexpectedly high-interest rates and stagnant inflation. Builders are also still facing higher supply-side costs and tighter lending conditions.

Overall housing starts decreased 14.7% in March to a seasonally adjusted annual rate of 1.32 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The March reading of 1.32 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. LINK

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3. Catch up quick

✍️ The central problem: Too many bad agents. (Rob Hahn)

❄️ Powell dials back expectations on rate cuts. (WSJ)

⬆️ Mortgage rates back to 7.5%. (MND Daily)

4. Fannie Mae, Freddie Mac will not count buyer agent commissions as IPCs

On Monday, the GSEs clarified policies regarding interested party contributions in response to legal developments concerning real estate commissions and related questions from trade groups.

"If a seller or seller's real estate agent continues to pay the buyer's real estate agent in accordance with local common and customary practices, these amounts are not required to be counted toward the IPC limits for the transaction," Fannie said in a selling notice.

Freddie issued a similar statement in an industry letter, noting, "If these fees continue to be customarily paid by the property seller according to local convention, they will not be subject to financing concessions limits."

5. Top 10 metros where Gen Z is buying homes

Members of Gen Z (born 1997-2012) have typically been known for being thrifty, but neither the shortage of homes or high rates and prices have kept them from successfully becoming homeowners.

Using the most recent government data available, Realtor.com has identified the following metropolitan areas with the largest percentage of Gen Z homeowners:

  1. Jacksonville, NC – 17.91%

  2. Elkhart, IN – 17.86%

  3. Lima, OH – 17.44%

  4. Waterloo, IA – 17.14%

  5. Cumberland, MD – 15.2%

  1. Watertown, NY – 15.14%

  2. St. Joseph, MO – 14.96%

  3. Hinesville, GA – 14.86%

  4. Dubuque, IA – 14.78%

  5. St. Cloud, MN – 14.62%

6. Client Direct Mortgage owner says UWM suit violates his free speech

Ramon Walker, owner of Client Direct Mortgage, and creator of a Facebook group dubbed "Rocket Pro TPO vs. UWM" has asked a Michigan federal court to dismiss a suit pegged against him by UWM.

The original complaint accuses Walker of trademark infringement and not paying an outstanding early payout balance of $124,000.

The motion to dismiss filed Monday argues the trademark infringement claim is a "pretext to muzzle Ramon’s criticism." Additionally, Ramon’s filing says the broker never actually signed an agreement in which he would owe an EPO, thereby, the alleged breach of contract claim is void.

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