Mortgage credit availability decreased in September

Plus: Home builder confidence rises for the second straight month

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Disclaimer: Average mortgage rates as of Oct 17, 2024. © MND Daily Rate Index.

1. Mortgage credit availability decreased in September

The Mortgage Bankers Association’s (MBA) released its Mortgage Credit Availability Index (MCAI) report for September 2024. According to MCAI, mortgage credit availability declined in September.

The MCAI declined by 0.5% to a reading of 98.5 in September. The MBA notes that a decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012.

The Conventional MCAI decreased 1.7%, while the Government MCAI increased by 0.8%. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 2.6%, and the Conforming MCAI remained unchanged.

2. Home builder confidence rises for the second straight month

Home builder confidence rose in October for the second consecutive month but volatile mortgage rates and low housing affordability continued to pose headwinds.

The NAHB/Wells Fargo Housing Market Index of builder confidence increased to 43 this month from 41 in September, the National Association of Home Builders said on Thursday.

"We are forecasting uneven declines for mortgage interest rates in the coming quarters which will improve housing demand but place stress on building lot supplies due to tight lending conditions for development and construction loans,"

NAHB Chief Economist Robert Dietz

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3. More Nuggets

🏘️ Fannie Mae CEO says she has never seen a housing market like this before. (MarketWatch)

🔐 Lock-in effect keeps stalling the rebound in existing home sales. (Morgan Stanley)

🏡 Storms be damned, Florida keeps building in high-risk areas. (WSJ)

🧑‍⚖️ Judge hits Tzadik CEO Adam Hendry and affiliates with $10.6M judgment over nationwide multifamily sales. (TRD)

🗞️ A racial divide exists between FHA homeownership and rental assistance programs. (HUD)

🚨 Coach’s Corner

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— Dave Krichmar CEO

4. Home seller profit margins drop in the third quarter

Homeowners earned a 55.6% profit margin on typical single-family home and condo sales in the United States during Q3 2024, according to ATTOM's Q3 2024 U.S. Home Sales Report.

The figure was down by small amounts both quarterly and annually, dipping by one percentage point from Q2 2024 and two points year-over-year. While home-seller profits remain historically high, the national margin has declined almost every quarter from a 64% peak hit in 2022.

“The latest price and profit numbers provided another round of generally good news for homeowners, tempered by a bit of a downside, home values remained at or near record levels around large swaths of the country, keeping seller profits far above historical levels. At the same time, though, the housing market settled down after a big second quarter, which extended a slow fallback in profit margins that started last year. If history is a good guide, the fourth quarter is likely to bring more of the same as the peak buying season ends.”

Rob Barber, CEO ATTOM

5. Mortgage fraud risk up 8.3% from last year

Identity and transaction fraud have risen for the second consecutive year, according to CoreLogic’s 2024 Mortgage Fraud Report. The Fraud Risk Index increased 8.3% nationwide from last year, with one in 123 mortgage applications showing signs of fraud in Q2 2024.

  • New York, Florida, and California led in fraud risk, with California seeing the highest increase at 14.6%.

Identity fraud jumped 5.5% year-over-year, driven by the growth in ITIN loan programs, while transaction fraud rose 4.9%, linked to rapid resales and risky buyer behaviors. In contrast, property and income fraud risks declined slightly.

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