FHFA imposes a $140B cap to GSEs

Good morning! It's the most Friday Monday of the year 🎉. Today’s newsletter is 651 words, a 2.5-minute read. Let’s dive in.

1. FHFA imposes a $140B cap on GSEs

The 2024 volume caps applicable to the multifamily loan purchases of Fannie Mae and Freddie Mac (the Enterprises) will be $70 billion for each Enterprise, for a total of $140 billion during the calendar year.

FHFA anticipates the 2024 cap levels will be appropriate given current market forecasts. However, FHFA will continue to monitor the multifamily mortgage market and increase the caps if necessary. If FHFA determines that the actual size of the 2024 market is smaller than initially projected, FHFA will not reduce the cap

To promote affordable housing preservation, loans classified as supporting workforce housing properties in Appendix A of the Conservatorship Scorecard will be exempt from the volume caps. All other mission-driven loans remain subject to the volume cap. LINK

2. McKinsey: Generative AI can change real estate

McKinsey released a report detailing how generative AI (gen AI) can revolutionize the real estate industry. The report highlights several key use cases where gen AI can be particularly impactful:

1. Streamlining Documentation Analysis: AI streamlines the review of extensive documents, enhancing efficiency and clarity.

2. Enhancing Real Estate Interactions: AI aids in managing customer interactions, improving engagement, and enhancing communication accuracy.

3. Facilitating Creative Visualization and Revenue Opportunities: Generative AI enables new forms of visualization, opening up avenues for engagement and novel revenue streams.

4. Accelerating Investment Decision-Making: AI supports more rapid and accurate analysis in investment decision processes.

5. Architectural Planning Optimization: AI assists in generating architectural plans designed to achieve specific outcomes, thereby enhancing creation and design processes.

For deeper insights into these applications, as well as actions you can take to realize the full value of gen AI as a real estate player, read the full report here.

3. Catch up quick

🏡 11 U.S. cities where you need to earn more than $200,000 to buy a home—New York City isn’t one of them. (CNBC)

⚖️ The National Association of Realtors and Keller Williams have hired former US solicitors general to help them beat back the multibillion-dollar verdict. (Real Deal)

🧑‍⚖️ Morgan Stanley fined $6.5M over client data breach. (BankingDive)

4. Housing starts rise moderately

New home construction unexpectedly picked up in October, indicating builders continue to benefit from a limited supply in the resale market.

Residential starts increased 1.9% last month to a 1.37 million annualized rate, the highest in three months, government data showed Friday. Construction of single-family houses edged up 0.2%, also to the highest level since July.

Applications to build - a proxy for future construction - rose to 1.49 million. Permits to build one-family homes increased to the highest level since May 2022, while multifamily authorizations also rose.

5. Charted: institutional homebuying activity

Below are 10 regional housing markets where institutional investors bought the most single-family homes over the last 3 months.

"Institutional investors" meaning operators that own at least 500 U.S. homes.

6. Movement sues Summit over poaching

Movement Mortgage sued three of its former executives after they joined rival Summit Funding, alleging misappropriation of trade secrets and illegal recruitment of Movement employees.

The executives, Deran Pennington, Matt Schoolfield, and Chris Shelton, are accused of misappropriating trade secrets, data theft, and use of confidential information to poach employees for Summit. In a countermove, Pennington filed a counterclaim against Movement, demanding about $9.8 million in unpaid compensation.

A recent court order partially favored Movement, requiring the return of any confidential information and prohibiting further solicitation of Movement employees by the defendants.

☀️ See you on Wednesday!

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