New home sales hit 15-month high

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1. New home sales hit a 15-month high

In May, new-home sales advanced to their fastest pace in over a year, bolstered by a limited inventory in the resale market.

Purchases of new single-family homes increased 12.2% to an annualized 763,000 pace last month — and up 20% over last year. The figure marked the third-straight monthly increase.

• The median sales price of a new home was down 7.6% from a year earlier to $416,300. That marked a second-straight month of annual declines.

However, the increase in sales was a negative for new home inventory. At the end of the reporting period, there were 428,000 homes available for sale, down 4,000 from the prior month. This was a 6.7-month supply at the current sales pace. Only 69,000 of these units are ready for occupancy. LINK

2. House passes bill to block LLPA changes

The U.S. House of Representatives passed legislation this week that reverses actions taken on the Loan-Level Price Adjustment (LLPA) mortgage rule.

The Middle-Class Borrower Protection Act of 2023 would restore the former LLPA mortgage structure and roll back new fee changes made by the Federal Housing Finance Agency (FHFA) based on the debt-to-income ratio (DTI). It also imposes a temporary one-year freeze in FHFA’s ability to make new LLPA fee changes. LINK

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3. Home prices continued to rise in April: Case-Shiller

Home prices in the US rose for a third straight month, pushed up by growing buyer demand for a tight supply of listings. A national gauge of prices increased 0.5% in April from March, according to seasonally adjusted data from S&P CoreLogic Case-Shiller.

• Despite being in what's traditionally the busiest homebuying season, the number of properties listed for sale is only about half of what it was in spring 2019. The inventory shortage is keeping a lid on transactions, but shoppers determined to seal a deal are often forced to pay more than the asking price in many areas of the country.

“If I were trying to make a case that the decline in home prices that began in June 2022 had definitively ended in January 2023, April’s data would bolster my argument. Whether we see further support for that view in coming months will depend on how well the market navigates the challenges posed by current mortgage rates and the continuing possibility of economic weakness.” Craig J. Lazzara, Managing Director at S&P DJI, said. LINK

4. More Nuggets

ACI Worldwide agreed to pay a $25 million civil penalty for illegally processing $2.3 billion in unauthorized mortgage payments from nearly 500,000 homeowners. LINK

LoanDepot has sued Movement, claiming that they used all-expenses-paid recruiting trips to poach loan officers and entice them into taking the company's trade secrets. LINK

Spy Tip: All Google ads can now be seen in the transparency library. Just type in the company name and see what Google Ads they are currently running. LINK Facebook already has such a tool.

In Other News: A spike in injuries from pickleball — the nation's fastest-growing sport — is driving up medical costs, possibly to the tune of a half billion dollars, according to a new report. LINK

5. Fannie Mae sees tightening ahead but leaves housing forecast unchanged

The outlook for the housing market and overall economy remains uncertain, with the possibility of a recession still looming, says Fannie Mae.

Despite a pause in central bank rate hikes, the GSE maintains that high-interest rates will continue for the foreseeable future, with little chance of relief for mortgage rates in the coming year. Fannie Mae's home sales forecast remains unchanged from its May prediction, anticipating sales of 4.86 million and 4.97 million units in 2023 and 2024, respectively.

However, citing an increase in all-cash offers, the organization has revised its forecasts downwards for single-family purchase originations (from $1.36 to $1.32 trillion) and refinance volumes (from $292 to $270 billion). Despite these adjustments, home prices are expected to continue rising due to low inventory.

☀️ See you on Friday!

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