navycmdr
15 hours ago
Sen. Warren Urges FHFA to Enforce Housing Obligations Upon the FHLBs
dhollier@imfpubs.com
Senate Banking Committee veteran Elizabeth Warren, D-MA, has castigated the Federal Home Loan Banks for failing to live up to their affordable housing obligations.
In a letter sent last week, Sen. Warren urged Federal Housing Finance Agency Director Sandra Thompson to reform the FHLBank system, which she described as “broken.” Pointing out that Congress established the district banks specifically to support housing and community development, she argues the institutions are failing to meet their basic mission.
The liberal Democrat highlighted a recent report by the Congressional Budget Office that estimated the system will receive roughly $7.3 billion in federal subsidies in 2024. These funds, she emphasized, were intended to address the country’s housing needs, but some of the cash is going elsewhere.
Last year, the FHLBanks contributed just $395 million to affordable housing programs. Over the same period, Warren notes, they paid $3.4 billion in dividends to their members. Maybe more remarkable, 42% of those members didn’t originate a single mortgage.
navycmdr
3 days ago
Homeowners sitting on a pile of cash
with $17Trillion in home equity: CoreLogic
There are now only 1 million homes underwater in the U.S.
June 7, 2024, 2:01 pm By Neil Pierson
Home equity continued to rise in the first quarter of 2024 as residential properties with mortgages collectively gained $1.5 trillion in equity over the past year, according to a CoreLogic report released Friday.
The average U.S. homeowner with a mortgage added $28,000 in equity during the year ending in March 2024 — the highest year-over-year increase since late 2022. Three states — California (+$64,000), Massachusetts (+$61,000) and New Jersey (+$59,000) — saw increases that were more than double the national average.
The $1.5 trillion gain in U.S. home equity over the past year brought total net equity to more than $17 trillion at the end of Q1 2024. Mortgaged properties account for 62% of all residential homes in the U.S., according to CoreLogic.
“With home prices continuing to reach new highs, owners are also seeing their equity approach the historic peaks of 2023, close to a total of $305,000 per owner,” Selma Hepp, chief economist at CoreLogic, said in a statement. “Importantly, higher prices have also lifted some 190,000 homeowners out of negative equity, leaving only about 1.8% of those with mortgages underwater.”
Negative equity, also known as an underwater or upside-down mortgage, involves borrowers whose outstanding mortgage debt exceeds the value of their home. On a quarterly basis, negative equity decreased by 2.1% in Q1 2024 and now represents 1 million homes nationwide.
The analysis also noted that the level of underwater mortgages at a given time can change quickly due to changes in home prices. For example, when looking at the level of mortgage debt in Q1 2024, there are 111,000 homes that would move back into a positive equity position if home values rose by at least 5%. Conversely, 153,000 homes would fall underwater if values declined by 5% or more.
“Home equity is key to mortgage holders who have seen other homeownership costs soar, including insurance, taxes and HOA fees, as a source of financial buffer,” Hepp said.
“Also, low amounts of negative equity are welcomed in markets that have shown price weaknesses this spring, such as Florida (1.1% of homes underwater) and Texas (1.7% of homes underwater) — both of which are below the national rate — as further price declines could drive more homeowners to lose their equity.”
navycmdr
4 days ago
Homebuying Sentiment Hits New Survey Low - June 7, 2024
Citing Unaffordability, 86% of Consumers Say It’s a Bad Time to Buy a Home
WASHINGTON, DC – The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) decreased 2.5 points in May to 69.4 as the component measuring consumer attitudes toward homebuying conditions fell markedly, reaching an all-time survey low. This month, only 14% of consumers indicated that it’s a good time to buy a home, down from 20% last month, while the share believing it’s a good time to sell fell from 67% to 64%. Meanwhile, consumers continue to believe affordability will remain tight for the foreseeable future, as respondents believe that, on net, home prices and mortgage rates will go up over the next year. Among the positives from the survey: A growing share of respondents, now 20%, indicated that their household income is significantly higher than it was a year ago. The full index is up 3.8 points year over year.
“Consumer sentiment toward housing declined from its recent plateau, as an increasing share of consumers struggle to find the positives in the current housing market,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “While many respondents expressed optimism at the beginning of the year that mortgage rates would decline, that simply hasn’t happened, and current sentiment reflects pent-up frustration with the overall lack of purchase affordability. This is most clearly evidenced by our ‘good time to buy’ component falling to a new survey low this month. On the other hand, homeowners’ perception of home-selling conditions declined only slightly and remains largely positive after a steady increase over the last few months. This suggests to us that, despite the so-called ‘lock-in effect,’ some homeowners may increasingly want or need to sell their homes for a myriad of non-financial reasons, which may lead to an increase in listings in the near future. As our latest forecast notes, we expect improvements to housing inventory will lead to slightly increased sales activity through the end of the year.”
Home Purchase Sentiment Index – Component Highlights
Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased 2.5 points in May to 69.4. The HPSI is up 3.8 points compared to the same time last year. Read the full research report for additional information.
Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home decreased from 20% to 14%, while the percentage who say it is a bad time to buy increased from 79% to 86%. As a result, the net share of those who say it is a good time to buy decreased 13 percentage points month over month.
Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home decreased from 67% to 64%, while the percentage who say it’s a bad time to sell increased from 32% to 35%. As a result, the net share of those who say it is a good time to sell decreased 6 percentage points month over month.
Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months remained unchanged at 42%, while the percentage who say home prices will go down remained unchanged at 18%. The share who think home prices will stay the same increased from 39% to 40%. As a result, the net share of those who say home prices will go up in the next 12 months increased 2 percentage points month over month.
Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months decreased from 26% to 25%, while the percentage who expect mortgage rates to go up decreased from 33% to 31%. The share who think mortgage rates will stay the same increased from 40% to 42%. As a result, the net share of those who say mortgage rates will go down over the next 12 months remained unchanged month over month.
Job Loss Concern: The percentage of respondents who say they are not concerned about losing their job in the next 12 months decreased from 76% to 75%, while the percentage who say they are concerned increased from 23% to 24%. As a result, the net share of those who say they are not concerned about losing their job decreased 1 percentage point month over month.
Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago increased from 17% to 20%, while the percentage who say their household income is significantly lower remained unchanged at 12%. The percentage who say their household income is about the same decreased from 70% to 67%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago increased 3 percentage points month over month.
About Fannie Mae’s Home Purchase Sentiment Index
The Home Purchase Sentiment Index® (HPSI) distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey® (NHS) into a single number. The HPSI reflects consumers’ current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making. The HPSI is constructed from answers to six NHS questions that solicit consumers’ evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.
About Fannie Mae’s National Housing Survey
The National Housing Survey (NHS) is a monthly attitudinal survey, launched in 2010, which polls the adult general population of the United States to assess their attitudes toward owning and renting a home, purchase and rental prices, household finances, and overall confidence in the economy. Each respondent is asked more than 100 questions, making the NHS one of the most detailed attitudinal longitudinal surveys of its kind, to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). For more information, please see the Technical Notes.
Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to support the housing market. The May 2024 National Housing Survey was conducted between May 1, 2024 and May 17, 2024. Most of the data collection occurred during the first two weeks of this period. The latest NHS was conducted exclusively through AmeriSpeak®, NORC at the University of Chicago’s probability-based panel, on behalf of PSB Insights and in coordination with Fannie Mae. Calculations are made using unrounded and weighted respondent level data to help ensure precision in NHS results from wave to wave. As a result, minor differences in calculated data (summarized results, net calculations, etc.) of up to 1 percentage point may occur due to rounding.
Detailed HPSI & NHS Findings
For detailed findings from the Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com. Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results.
To receive e-mail updates with other housing market research from Fannie Mae's Economic & Strategic Research Group, please click here.
About the ESR Group
Fannie Mae’s Economic and Strategic Research Group, led by Chief Economist Doug Duncan, studies current data, analyzes historical and emerging trends, and conducts surveys of consumer and mortgage lender groups to provide forecasts and analyses on the economy, housing, and mortgage markets. The ESR Group was awarded the prestigious 2022 Lawrence R. Klein Award for Blue Chip Forecast Accuracy based on the accuracy of its macroeconomic forecasts published over the 4-year period from 2018 to 2021.
About Fannie Mae
Fannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit:
fanniemae.com | Twitter | Facebook | LinkedIn | Instagram | YouTube | Blog
Media Contact
Matthew Classick
202-752-3662
Fannie Mae Newsroom
https://www.fanniemae.com/news
navycmdr
5 days ago
Fannie Mae Exceeds $3 Billion in Single-Family Labeled Social Bond Issuance
June 6, 2024
Social Bond Indicator Provides Insight into Programmatic Social Bond Issuance
WASHINGTON, DC – Fannie Mae (FNMA/OTCQB) released a new disclosure for its single-family mortgage-backed securities (MBS), the Social Indicator. This disclosure helps investors easily identify MBS issued since March 1, 2024 that meet the criteria outlined in Fannie Mae's Single-Family Social Bond Framework.
"We're pleased to provide a social label to help investors better identify pools that are highly aligned with Fannie Mae's mission," said Devang Doshi, Senior Vice President, Single-Family Capital Markets. "With the Social Indicator, investors using our PoolTalk® and Data Dynamics® platforms and other third-party systems, such as Bloomberg, can now easily identify the over $3.6 billion in single-family social bonds that Fannie Mae has issued to date and monitor future issuance to analyze for fit in their portfolio."
This latest disclosure enhancement is another step Fannie Mae has taken to attract new sources of capital to the U.S. mortgage market.
"Since March, Fannie Mae's Whole Loan Conduit has offered monthly issuances of over $600 million in Social MBS to investors, and plans to continue to issue these bonds programmatically," said Nick Sapirie, Vice President, Single-Family Capital Markets. "These MBS offer an attractive profile to investors with a social objective, and those without. The premiums that investors pay for these securities help to encourage lending to the borrowers we are chartered to support, a dynamic we've highlighted in a recent Perspectives blog and research paper. We've also seen consistent issuance from several MBS lenders using our platform."
Fannie Mae's Single-Family Social Bonds are backed by loans to populations that typically face barriers to obtaining affordable housing or access to credit. Fannie Mae's Mission Index™ disclosure is the foundation of the Single-Family Social Bond Framework, which adheres to global standards and is validated by a Second Party Opinion.
"Fannie Mae's Mission Index and single-family social bond framework have significantly increased market transparency by providing pool-level insights into the underlying loans in collateral pools," said Dennis Lee, Securitized Credit Analyst Team Leader, and Ramon de Castro, Portfolio Manager, MBS and RMBS Strategies, both of T. Rowe Price Associates, Inc. "Fannie Mae's thoughtful approach gives us confidence that proceeds are being efficiently allocated to target populations, generating improved outcomes for both target populations and investors, as well as enabling us to share tangible metrics of social impact in U.S. housing with clients."
In line with social bond practices, Fannie Mae will also provide annual impact reporting to help the market understand the social impact of the loans underlying their investments.
To learn more about how premiums investors pay for MBS promote mortgage lending, read "Benefiting Borrowers with a Creative MBS Disclosure Solution."
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