Existing home sales fell 2.2% in July

👋 Good morning and welcome back! Today’s newsletter is 670 words, a 3-minute read.

1. Trade groups raise concerns over proposed AVM rules

Two major industry trade groups, the Mortgage Bankers Association (MBA) and the Consumer Bankers Association (CBA), sent a letter to regulators on Monday warning of the “unintended consequences” of new quality control standards for automated valuation models (AVMs).

While AVMs are under scrutiny because of concerns about bias and rising valuation costs, the MBA and CBA argue against regulations that might hinder technological progress addressing these issues.

Regarding bias concerns, the associations believe lenders shouldn't be liable for third-party AVM biases since they lack control over these providers. They emphasize addressing systemic biases broadly rather than burdening lenders.

2. Forbearance numbers fall below 200K

The total number of loans in forbearance decreased by 5 basis points to 0.39% of servicers’ portfolio volume in July from 0.44% in June, according to the MBA monthly loan monitoring survey.

• The MBA estimates about 195,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to about 7.9 million borrowers since March 2020.

The prevalence of forbearance plans has dropped dramatically since 2020, and the reasons that borrowers are in forbearance are changing, the MBA said.

“About two-thirds (69.3%) of borrowers are still in forbearance because of the effects of COVID-19, but a growing share of borrowers are in forbearance for other reasons that cause temporary hardship such as financial distress (24.2%) or natural disasters (6.5%),” Marina Walsh, MBA’s vice president.

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3. More Nuggets

📈 Mortgage rates surge anew, inching closer to 8%. (Axios)

🙅 Union Home Mortgage denies discrimination claim from pregnant employee. (NEXT)

🏚️ Foreclosure inventory hits a 15-month low in July. (HW)

4. Existing home sales slide on higher rates

Sales of previously owned US homes fell in July to the lowest level since the start of the year, constrained by a lack of inventory and higher borrowing costs.

Existing home sales fell by 2.2% in July and were down 16.6% on a year-over-year (YoY) basis, according to data released by the National Association of Realtors on Tuesday.

Homeowners have been discouraged from listing their properties as mortgage rates have more than doubled, keeping asking prices elevated. More recently, the average 30-year fixed rate has pushed well above 7% to the highest level in more than two decades, suggesting demand will continue to struggle.

5. Where the most new-homes are being built

Newly built homes made up nearly one-third (31.4%) of U.S. single-family homes on the market in the second quarter. That’s the highest share of any second quarter on record, with new construction keeping the housing market afloat amid the severe shortage of existing homes for sale. Full Report

☀️ See you on Friday!

P.S. Is there a topic you would like me to cover more? Just hit reply and let me know. 🙏

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