Six federal agencies issue final rule on automated valuation models (AVMs)

Good morning. This is Mortgage Nuggets, your tri-weekly dose of reliable mortgage news—because unlike Windows computers, we never crash! 🟦

Today’s newsletter is 736 words, a 3-minute read.

1. Mortgage rates fall to their lowest level since March

Mortgage rates fell to their lowest level in four months, as the market expects the Federal Reserve to cut interest rates due to signs of a cooling economy.

The 30-year fixed-rate mortgage averaged 6.77% during the week ending July 18, the lowest level since mid-March, down from 6.89% in the previous week, mortgage finance agency Freddie Mac said on Thursday.

2. Mortgage refinance demand jumps to a 2-year high

Applications to refinance a home loan jumped 15% last week compared with the previous week, reaching the highest level since August 2022, according to the MBA’s seasonally adjusted index.

• Demand was 37% higher than the same week one year ago when mortgage rates were exactly the same.

While the increase last week was large, it is coming off a very small base. Refinance demand is still more than 70% lower than it was in early 2020, before the Covid-19 pandemic hit.

Amid expectations of Federal Reserve rate cuts, some analysts anticipate significant refinancing opportunities worth up to $2.7 trillion.

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3. More Nuggets

📉 Mortgage rates are falling—will buyers bite? (NAR)

⚡️ CrowdStrike experienced an outage that affected HUD, Fannie and Freddie DU/LP, Encompass, and caused issues with bank wires. (NPR)

🧑‍⚖️ Appeals court delivers big win to CFPB in Townstone redlining case. (SE Law)

🏘️ Falling mortgage rates and rising supply create opportunities for homebuyers this summer, even amid record-high prices. (Redfin)

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4. Six federal agencies issue final rule on automated valuation models (AVMs)

Six federal regulatory agencies issued a final rule under the Dodd-Frank Act to ensure the credibility and integrity of automated valuation models (AVMs) for mortgages on consumers’ principal dwellings.

The rule requires institutions to implement quality control standards, including policies to ensure confidence in estimates, protect against data manipulation, avoid conflicts of interest, conduct random sample testing, and comply with nondiscrimination laws.

This aims to enhance AVM reliability while leveraging advances in technology and data. The rule takes effect on the first day of the calendar quarter following 12 months after publication in the Federal Register.

5. International buyers pull back from the U.S. market

According to the NAR, the amount of existing home purchases from international buyers fell 36% between April 2023 and March 2024. This is the lowest level of international investment since the NAR began tracking it in 2009. (Report)

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

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