Florida overtakes New York as second-biggest US housing market

👋 Good morning and happy Wednesday. Today's newsletter is 768 words, 3 minutes.

1. New home-sales in August fell short of expectations

Sales of newly built homes fell 8.7% in August from July to a seasonally adjusted annualized pace of 675,000 units, according to the U.S. Census Bureau. That is the slowest pace since March. Sales were still 5.8% higher than August 2022.

The Census count is based on signed contracts during the month, and mortgage rates took a sharp jump higher. The average rate on the popular 30-year fixed loan ended July at 7.04%, according to Mortgage News Daily. By Aug. 22, it was at 7.48%.

“Very stretched affordability means demand will be unable to recover in the near term, causing new home sales to fall back from 675,000 annualized in August to 600,000 annualized by the end of the year,” wrote Imogen Pattison, assistant economist at Capital Economics.

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2. Florida overtakes New York as second-biggest housing market

Florida has overtaken New York to become the second most-valuable U.S. housing market, according to a new study by Zillow.

The total value of U.S. housing rose more than $2.6 trillion in the past year, Zillow said, defying predictions that higher borrowing costs would lead to a prolonged slump.

• Low levels of supply, enhanced by the lock-in effect — which has left current mortgage borrowers reluctant to give up their low-cost loans — have pushed nationwide prices to a new high.

The gains haven't been evenly spread across the country. In California, which contains about one-fifth of the U.S. housing market, prices have declined since June 2022. But in Florida, the value of residential property has risen $160 billion in that period — pushing the Sunshine State ahead of New York in the national rankings.

3. Catch up quick

⚖️ Potential government shutdown threatens home loan processing. (NMP)

😬 First the bubbly, then the layoffs. Inside Better's latest round of job cuts. (Insider)

⬆️ Home inventory is climbing even faster than this time a year ago. (Altos)

4. Mr. Cooper sues ACI for damages related to costly servicing incident

Mr. Cooper wants ACI Payments to further pay up for its servicing mistake two years ago which impacted borrowers' bank accounts for a combined $2.3 billion.

The Greater Dallas-area servicer, under its Nationstar Mortgage name, is suing the vendor in a Texas federal court for unspecified damages. The subsidiary of ACI Worldwide in June paid a $25 million fine to the Consumer Financial Protection Bureau for illegally charging borrowers in April 2021.

Contractors for ACI caused the incident that month when they used Nationstar's confidential customer information in quality assurance testing, which inadvertently triggered mortgage payment withdrawals at borrower's banks. Depositories in the process charged 100 customers overdraft or insufficient fund fees, and froze the accounts of others.

5. FHFA considers exceptions for GSE’s aiming to acquire mortgages with shared equity features

The FHFA is moving to consider an amendment to current regulations that restrict Fannie Mae, Freddie Mac and federal home loan banks from purchasing, investing in or dealing in mortgages on properties encumbered by certain types of private transfer fee covenants (PTFCs), according to an entry published in the Federal Register on Tuesday.

Current regulations conflict with the duty to serve regulation. They restrict the government-sponsored enterprises and banks from dealing in loans encumbered by PTFCs or related securities, “and prohibits the banks from accepting such mortgages or securities as collateral for advances, unless such PTFCs are ‘excepted transfer fee covenants,’” the entry explained.

☀️ See you on Friday!

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