Homeowners ready to sell despite the lock-in effect

👋 Welcome back. This morning we're looking at Fidelity's data breach lawsuits, single-family home price trends, HomeStreet's sale, and shifting homeowner sentiments.

1. Fidelity and LoanCare sued over loan data breach

Fidelity National Financial and its subsidiary LoanCare are facing multiple lawsuits following a November 2023 cyberattack by Alphv/Blackcat, exposing the personal data of over 1.3 million individuals.

Plaintiffs allege negligence in data protection and delayed breach disclosure, with most lawsuits seeking class-action status. The attack affected Fidelity's real estate and mortgage services and compromised LoanCare customer data, including sensitive personal information.

The lawsuits highlight delayed notification to customers and accuse Fidelity and LoanCare of recklessness and violations of privacy laws. One specific lawsuit cites the breach's impact on delaying a home closing, leading to financial harm.

2. HomeStreet to sell itself after a tough year

Seattle-based HomeStreet, which saw its share price plunge last year amid concerns over rising interest rates and high levels of multifamily loans, agreed to sell itself yesterday in an all-stock deal.

Buyer FirstSun Capital Bancorp is paying $286 million, a sum that works out to $14.75 per HomeStreet share. That's just over half of HomeStreet's share price a year ago, but a noteworthy 37% premium over Friday's $10.77 closing price.

"What we saw was a great deposit base where others had seen erosion given the uncertainty of the past year. We saw a very conservative credit profile…We saw a very strong fee income profile and a very experienced management team,” FirstSun CEO Neal Arnold said

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3. Rate lock’s grip on homeowners loosens

A recent Zillow survey found that 21% of homeowners are contemplating selling their homes within the next three years, a rise from 15% a year earlier.

Conducted in Q4 of 2023, the survey also found an interesting trend: the willingness to sell was almost equal among homeowners with mortgage rates above or below 5%.

This marks a considerable shift from six months ago, indicating that current mortgage rates are becoming less pivotal in homeowners' decisions to sell.

"Buyers found significant savings as rates fell. But mortgage rates are fickle things, as we've seen in recent weeks, and they'll play a massive role in determining appreciation and affordability. Fortunately, rate lock appears to be wearing off for some homeowners, who show encouraging signs that they're ready to come back to the market." Zillow Chief Economist Skylar Olsen said.

4. Catch up quick

🏡 Inside a plan to save homeowners hundreds of dollars closing their mortgages. (WSJ)

⚖️ Zillow sues rivals over software that schedules property showings. (Reuters)

🏞️ The top 100 landowners in America. (The LandReport)

🏢 Fannie Mae's 700K SF headquarters listed as available for lease. (CoStar)

5. Single-family home prices climb 7.1% in one year

Single-family home prices increased 7.1% over the last year. That's according to Fannie Mae's latest Home Price Index.

Home prices rose 7.1% from Q4 2022 to Q4 2023, up from the previous quarter's revised annual growth rate of 5.1%.

Quarterly, home prices rose a seasonally adjusted 1.7% in Q4 2023, a deceleration from 2.1% growth in the third quarter.

"In the current supply-constrained housing market, any changes to the fundamentals of affordability are going to affect demand, and we saw this in the fourth quarter with interest rates peaking near eight percent and helping further slow home price growth," Fannie Mae Senior Vice President and Chief Economist Doug Duncan said.

🙏 See you on Friday!

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