Fannie Mae: Consumer confidence low

Good morning! This is Mortgage Nuggets, the daily newsletter that gets you caught up with important news and updates. Every Mon, Wed, and Fri morning.

1. Homepoint exits wholesale

Homepoint is closing its mortgage origination business and will sell its origination-focused assets to competitor The Loan Store.

The company will hold an equity interest in The Loan Store and focus on becoming an investor in the market. Home Point Capital, Homepoint's parent company, will manage its balance sheet and mortgage servicing rights (MSR) portfolio.

Homepoint's president of originations, Phil Shoemaker, will serve as CEO of The Loan Store, with the current CEO, Mark Lefanowicz, becoming executive chairman.

Brad Pettiford, a spokesperson for Homepoint, said approximately 100 current Homepoint employees, including operational staffers and account executives, are expected to join the new company. About 350 people will be laid off as part of the wind-down.

The last day to lock in a loan with Homepoint is today, Monday, April 10. All loans in the pipeline will be done and funded by May 31. Brokers who were approved partners with Homepoint will be automatically approved at The Loan Store.

2. Fannie Mae: Consumer confidence low

A Fannie Mae survey reveals that a majority of consumers think it's a bad time to buy a home. The percentage of respondents who believe it's a good time to buy remained at 20%, while those who think it's a bad time stayed at 79%.

“With the spring homebuying season now upon us, a large majority of consumers continue to believe that it’s a bad time to buy a home,” Mark Palim, Fannie Mae’s vice president.

On the seller side, 58% said it's a good time to sell, up from 54%.

Consumers cited unfavorable mortgage rates and the lock-in effect as reasons for their pessimism.

“Homeowners sharing this belief frequently cited ‘unfavorable mortgage rates’ as the primary reason for their pessimism, further corroborating the often-discussed disincentive – or ‘lock-in effect’ – that many mortgage holders who may be considering moving have toward giving up their lower rates,” Palim said.

3. More Nuggets

🔒 Calif. pauses mortgage aid program in less than two weeks because of demand. State officials thought funding would last months for a program to provide people with money for 20 percent down payments on a home (Bloomberg)

💰 Why are millennials facing such significant obstacles in achieving home ownership, even with higher education and earnings than previous generations? (FT Opinion)

4. Lock activity increased in March

Residential mortgage rate lock volume increased across the board in March after dipping in February, according to data compiled by Mortgage Capital Trading, Inc. (MCT).

• Purchase lock activity increased by 23% month-over-month.

• Rate/term refinance volume grew 39% month-over-month.

• Cash-out refinance volume rose 28% month-over-month.

Overall, lock activity spiked 24% compared to February.

“The fall of Silicon Valley Bank and the expectation of the fed to ease rate hikes resulted in a modest drop in mortgage rates in March,” the report states. “As the fed reaches for its terminal fed funds rate and we begin moving into the spring, we should see the effect on purchase activity.”

Rate lock activity compiled by MCT is based on the actual dollar volume of locked loans rather than the number of applications.

“Especially in a tight purchase market, MCT believes its methodology (using actual loans locked vs. applications) is a more reliable metric,” the company said.

5. Fastest growing (and shrinking) U.S. states

According to new Census Bureau data, Idaho, Montana, and Florida experienced the largest population growth among U.S. states from 2020 to 2022.

Idaho's population grew by almost 5%, while Montana and Florida each saw a 3% increase.

Meanwhile, New York, Illinois, and Louisiana experienced the most shrinkage. New York's population shrank by 2.1%, while Illinois and Louisiana lost 1.6% and 1.3%, respectively.

☀️ See you on Wednesday!

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