Rocket raises conforming loan limit to $802,650

Plus: Demand for second-home mortgages falls to eight-year low

September 16, 2024

🥱 Rise and shine. It's Monday. Today's newsletter is 568 words, a 2.5-minute read.

Disclaimer: Average mortgage rates as of Sep 13, 2024. © MND Daily Rate Index.

1. Rocket raises conforming loan limit to $802,650

Rocket Pro TPO on Friday announced that it will be the first one to increase the national conforming loan limit for 2025. Rocket’s current loan limit is $766,550. Starting today, brokers working with Rocket Pro TPO can loan up to $802,650. For Alaska and Hawaii, the limit will increase to $1,203,975.

This announcement comes early and marks the third consecutive year that Rocket is the first to announce loan limits.

“The team works very hard to be able to be the first to go out to market on it. Because of our position and our liquidity, we're able to go out there and offer this because we're going to hold these loans on our books until the new loan limits go out [on November 26].”

Rocket Vice President Mike Fawaz

2. Demand for second-home mortgages falls to eight-year low

Mortgage-rate locks for second homes fell 13.1% year over year in August to the lowest level since March 2016 on a seasonally adjusted basis. By comparison, mortgage-rate locks for primary homes declined 5.2%.

Rate locks for second homes were down 59.2% from pre-pandemic levels, compared with a 31.9% drop in rate locks for primary homes.

Demand for second-home mortgages is likely cooling in part because some buyers are paying in cash to avoid elevated mortgage rates. But high prices, economic jitters and a sluggish rental market have also made second homes less attractive.

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3. More Nuggets

🗞️ Here’s what Harris and Trump have proposed to help the housing crisis. (TIME)

🏘️ $25K down payments still exist in some U.S. metros. (NMP)

📈 Rent, utilities rose faster than home values for first time in a decade. (WaPo)

📰 UWM unveils KEEP: AI tool to notify customers of refi options. (MarketScreener)

4. Charted: Number of U.S. privately owned housing units beginning construction

At the peak of the last housing boom back in 2005, builders were constructing new homes at a rate of about 2.2 million per year. Now, the number is 1.2 million.

Demand for housing spiked in the pandemic, as mortgage rates hit rock-bottom lows and many folks sought more space for remote work or moved due to health concerns. But building hasn't returned to the levels last seen in the early 2000’s.

5. FHA proposes updates to partial claim payoff statements

The Federal Housing Administration (FHA) has published a proposed Mortgagee Letter to clarify how much is owed on partial claims. Partial claims help borrowers who have missed payments by allowing FHA to cover a portion of the overdue amount, creating a subordinate lien on the property.

The proposal requires lenders to obtain payoff statements for partial claims from HUD’s SMART Integrated Portal (SIP) and provide them when requested. It also extends the timeframe for recording partial claim security instruments from 5 to 15 days. Public comments are open until October 10.

☀️ You’re all caught up. See you on Wednesday!

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