Fannie Mae unveils $2,500 homebuying credit

🥂 Happy Friday! Today's newsletter is 897 words, a 3.5-minute read.

1. Fannie Mae unveils $2,500 homebuying credit

Fannie Mae has announced an update to its HomeReady mortgage product that could save certain borrowers thousands of dollars on upfront homebuying costs.

In a lender letter issued Wednesday, the mortgage giant unveiled a temporary $2,500 credit for low-income homebuyers that can be used toward a down payment and closing costs, "two of the greatest barriers to homeownership," according to Fannie.

The credit is effective for Fannie Mae HomeReady mortgage loans delivered after March 1 through February 2025, and is available to borrowers who earn at or below 50% of the area median income where the property is located.

Lenders will provide the credit to the borrower and be reimbursed by Fannie Mae through the standard LLPA credit process.

2. NerdWallet 2024 home buyer report

NerdWallet just released its comprehensive 2024 Home Buyer Report, providing insightful data and analysis on the current state of home buying in the United States.

Here are some key findings from the report:

• 2023 buyers struggled to find success. More than three-fourths (77%) of Americans who began 2023 with the intention of buying a home fell short, an increase from 66% of unsuccessful would-be buyers in 2021. 

• Some buyer optimism seeps into 2024 home budgets. More than 1 in 10 (12%) of Americans say they plan to purchase a home in the next 12 months. On average, they hope to spend $274,800 — well under the national median sales price. 

• Overall, the current perspective is glum. About two-thirds (67%) of Americans say the housing market has never been worse for buyers than it is right now, and 64% of Americans believe a housing market crash is imminent in the next three years.

• More cite obstacles to homebuying in 2024 than years past. About three-fourths (74%) of Americans say something is preventing them from buying a home in 2024, up from 69% in 2023, 63% in 2022 and 61% in 2021.

• The current market could have lasting impact. Nearly two-thirds (64%) of Americans say buying a home is not the measure of achievement it once was, and 54% of Americans say there is too much pressure to own a home in the U.S., a sentiment more commonly felt among younger generations. 

Full report here.

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3. Catch up quick

🏘️ Freddie Mac, Fannie Mae revamp social MBS framework to boost affordable housing. (FT)

📈 What recession? The U.S. economy grew at a blistering 3.3% pace in Q4 while inflation pulled back. (CNBC)

👀 Realtors Jason Haber and Mauricio Umansky have launched the American Real Estate Association as an alternative to NAR. (LinkedIn)

📊 Mortgage applications rose by 3.7% in the week ending Jan. 19 compared to one week earlier. (MBA)

4. New home sales continue to grow

Last month, purchases of new single-family homes increased by 8%, reaching an annual pace of 664,000, government data shows.

The figures illustrate some momentum heading into 2024, underscored by the first pickup in annual sales in three years. Mortgage rates dropped by more than a full percentage point toward the end of last year, and once the Federal Reserve starts cutting interest rates, that should give the sector an even bigger boost.

The median sales price of a new home dropped for a fourth month to $413,200 in December. The supply of new homes climbed to 453,000 in December, the most in more than a year, according to the report.

5. LoanSnap receives cease and desist over unlicensed originators

The Connecticut Banking Department issued a cease and desist order to LoanSnap, a California-based mortgage lender, for using unlicensed individuals to negotiate and process residential mortgage loans.

LoanSnap faces allegations of violating the Truth in Lending Act and the Fair Credit Reporting Act. The order may lead to the revocation of LoanSnap's state mortgage lender license and impose a civil money penalty of up to $100,000 per violation.

LoanSnap requested a hearing following the department's 14-day deadline to contest the potential license revocation. The unlicensed employees, primarily working in out-of-state call centers, were involved in soliciting, taking applications, and negotiating mortgage loans in Connecticut.

6. Mortgage rates rise to highest level in a month

The average for a 30-year, fixed loan was 6.69%, up from 6.6% last week, Freddie Mac said in a statement yesterday. It was the biggest weekly jump since late October, putting the average rate back near the highest since the middle of December.

Investors are weighing the Federal Reserve’s next steps. The market was readying for the possibility of rate cuts early in 2024 given policymakers’ forecasts, but an acceleration of inflation in December and strong retail sales have raised concerns about how soon the central bank may start. The Federal Reserve is scheduled to meet next week.

1 fun thing: I’m loving the new season of True Detective. If you haven’t watched the show before, season 1 is one of the greatest pieces of television ever.

👋 See you on Monday!

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