New-home sales reach 13-month high

Good morning! This is Mortgage Nuggets, the telescope of mortgage news. Our updates can help give you a clearer view of everything that’s going on in the mortgage world.

1. New-home sales reach 13-month high

New home sales unexpectedly increased by 4.1% in April to an annualized rate of 683,000, the highest since March 2022, according to recent government data. This rise came despite mortgage rates being nearly double compared to the end of 2021, and reflects continued demand for new homes fueled by limited inventory in the resale market. The median sales price for a new home dropped by 8.2% from a year earlier to $420,800, the largest decrease since April 2020, as more buyers opted for cheaper houses. Sales were particularly robust in the South and Midwest, rising by nearly 18% and reaching their fastest pace in over a year. The new homes market now makes up almost a third of the housing inventory. LINK

2. Rocket rolls out a 1% down home loan program

Rocket Mortgage is rolling out a new 1% down home loan program, ONE+, targeting over 90 million borrowers. The program requires a buyer whose income is equal to or less than 80% of the area median income, to make a 1% down payment on a single-family home, with the lender covering the remaining 2%. The program not only reduces upfront costs, but will also eliminate the monthly mortgage insurance fee for the borrower, which is traditionally required if the buyer puts less than 20% down on their purchase. The program follows a similar offering by rival United Wholesale Mortgage. LINK

3. More Nuggets

Freddie Mac has updated its automated income assessment tool to include digital pay-stub data, offering lenders a more efficient and accurate calculation of homebuyer income, and expanding access to credit. Freddie Mac

A Seattle federal district court judge dismissed a lawsuit by Guild Mortgage Co. LLC against CrossCountry Mortgage LLC, alleging branch poaching and misappropriation of confidential data. NMP

Blend has introduced a soft credit inquiry function for lenders amidst rising credit report fees, claiming this can save lenders around $50 per file, while also avoiding the creation and sale of trigger leads associated with hard credit checks. Blend

4. Zillow just got super bullish

Zillow's housing market forecast has shifted from bearish to bullish as it now predicts a 4.8% increase in U.S. home prices from April 2023 to April 2024. This change in stance comes as the housing market stabilizes amid high mortgage rates. Jeff Tucker, a Zillow economist, noted that despite affordability challenges and a housing market that's cooler than normal, a robust spring seller's season is underway. Out of the nation's 400 largest housing markets, Zillow expects home prices to rise in 390 markets and to fall only in 10 markets. LINK

5. GSEs address loan-repurchase complaints

Executives from Fannie Mae and Freddie Mac have acknowledged the strain of increased loan-repurchase requests on lenders, attributing them to economic conditions, not underwriting process issues. Both institutions are in talks to address the problem. Fannie Mae's senior vice president, Devang Doshi, said that repurchase requests made since mid-last year reference loans largely underwritten during the COVID environment. Freddie Mac is working with lenders to identify pain points and achieve better outcomes. These discussions come amidst concerns that Fannie and Freddie are being overly aggressive with repurchase demands on loans with minor defects. LINK

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