Mortgage demand falls during Christmas week

Good morning. Welcome to the newsletter that treats mortgage news like a speed dating round - fast, fun, and to the point.

1. Purchase applications fall during Christmas week

The MBA gauge of mortgage applications to buy a home slid 9.4 percent, the most since April, in the week ended Dec 29. The rate for a 30-year fixed mortgage contract increased by five basis points, reaching 6.76 percent.

In the prior week, the home-purchase index rose to the highest since late July as the 30-year rate dropped to a seven-month low. The figures tend to be volatile around holidays, and last week included Christmas.

The MBA’s overall index of mortgage applications, which includes both purchases and refinancings, decreased 10.7 percent last week, the most since February.

2. Monthly mortgage payments drop by $372

The median monthly mortgage payment was $2,361 during the four weeks ending December 31, down $372 (-14%) from October’s all-time high.

Even though mortgage applications dropped 9.4% this week, according to the MBA, Redfin said early-stage homebuying demand is starting to pick up.

Redfin’s Homebuyer Demand Index, a seasonally adjusted measure of requests for tours and other homebuying services, is up 10% from a month ago to its highest since August.

3. Catch up quick

💌 How work friends saved one banker’s life. (WSJ)

📝 Fed meeting minutes indicate interest rate cuts could be coming in 2024. (Fox)

🧑‍⚖️ Movement's ex-national sales director countersues for $13M. (BNN)

4. Charted: Shift in home prices

The latest home price reading from Freddie Mac’s House Price Index was released recently. It is calculated using a database of mortgages purchased by GSEs.

According to the Index, home prices fell -0.2% during the seasonally soft window between October 2023 and November 2023. On a year-over-year basis, home prices rose +6.2% between November 2022 and November 2023.

This interactive chart shows the home price change in America's 384 largest housing markets. Below is a segment of the chart.

Note: Whenever a group like Freddie Mac mentions U.S. home prices, they are referring to the national aggregate. However, on a market-by-market level, it can vary significantly.

5. CrossCountry, Loandepot trade punches in lawsuit

In a recent legal development, CrossCountry Mortgage (CCM) received permission from U.S. District Judge Arun Subramanian to proceed with false advertising counterclaims against competitor Loandepot.

This decision is the latest in ongoing legal disputes between the two companies. CCM alleges Loandepot sent marketing emails to potential customers using the email addresses of former employees who had moved to CCM in 2022.

Judge Subramanian's Dec. 29 order allows these allegations to be explored further, stating Loandepot can revisit its arguments after evidence discovery.

This case is part of a broader conflict, originating from Loandepot's July 2022 lawsuit accusing CCM of poaching New York-area workers and misappropriating confidential data.

6. Pennymac lays off 84 employees

Pennymac Financial Services laid off 84 employees in November across five California offices due to tough market conditions.

The layoffs, reported in a WARN alert to California’s Employment Development Department, included various positions like loan officers and vice presidents.

Pennymac cited the cyclical nature of the industry as the reason for this workforce reduction. Affected employees, not represented by a union, were offered severance and rehire possibilities.

Despite a 16% decrease in production volume from 2022, Pennymac remained the second-largest mortgage lender in the first nine months of 2023.

Coming up: The December jobs report is set for release today at 8:30 AM.

WORK-LIFE

There is a disconnect between CEOs and normal employees struggling to stay motivated. There’s a lot at play, from economic hardships to layoffs to family responsibilities. So we want to hear from you.

And come back next week on Wednesday to see the results.

👋 See you on Monday!

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