Daily Newsletter: Home Price Gains Have Outsized Affordability Impacts

According to the National Association of Homebuilders (NAHB), 87.5 million households, 69 percent of the nation’s total, cannot afford to buy a new median priced home because they lack sufficient incomes to qualify for a mortgage under standard underwriting criteria. The figure comes from NAHB’s annual “priced out estimates” which show how higher prices and interest rates affect affordability. The author of the study, Na Zhao, says affordability was determined using a median new home price of $412,506 and a mortgage rate of 3.50 percent. This resulted in a monthly mortgage payment of $1,822. Given those parameters, as well as a fixed price of $493 for taxes and insurance, he estimated that the median household income needed to qualify for a mortgage is $99,205 per year. With that scenario, 39.205 million households could currently purchase that median priced home. However, if the home price increased $1000, with all other criteria remaining the same, the additional $4 added to the monthly mortgage payment would raise the minimum household income required to $99,445. That added $240 per year would knock 117,932 households out of the ability to qualify for a mortgage. NAHB’s housing affordability pyramid (below) represents the number of households that can only afford homes at or below a certain price. Using conventional assumptions and underwriting criteria, an income of $36,074 is needed to purchase a $150,000 home and about 36 million households have no more than that income. Each step on the pyramid represents a maximum affordable price range for fewer and fewer households.

February 14, 2022 Housing News Home Price Gains Have Outsized Affordability Impacts According to the National Association of Homebuilders (NAHB), 87.5 million households, 69 percent of the nation’s total, cannot afford to buy a new median priced home because they lack sufficient incomes to qualify for a mortgage under standard und... (read more) Housing News Spike in Foreclosure Activity Not a Surprise The sources that gather such data have all reported a steady decline in mortgage delinquencies since last summer and are all stages are now close to the historic lows that existed prior to the COVID-19 pandemic. However, ATTOM says foreclosure activ... (read more) Rob Chrisman Fee Collection, MSR Acquisition Tools; Deep Dive into Recent Rate Moves; Capital Markets Sometimes, someone unexpected comes into your life outta nowhere, makes your heart race, and changes you forever. We call those people cops. (Where did you think that was going?) There are always riddles and surprises out there (find the heart), but ... (read more) Mortgage Rates Rates Jump Back Up to The Highs Last Friday was an interesting day for mortgage rates and the broader bond market. Rates began the day roughly in line with Thursday's latest levels, but bonds lost ground throughout the morning. Multiple lenders adjusted rates higher before 1:30pm. After that, headlines made the rounds regarding the potential Russian invasion of Ukraine,... (read more) 30 Yr. Fixed Rate 4.10% +0.05% Rate Change Points Mortgage News Daily 30 Yr. Fixed 4.10% +0.05 0.40 15 Yr. Fixed 3.33% +0.02 0.00 30 Yr. FHA 3.75% 0.00 0.00 30 Yr. Jumbo 3.54% -0.01 0.00 5/1 ARM 3.72% +0.01 0.50 Updates Daily - Last Update: 2/14 15 Yr. Fixed Rate 3.33% +0.02% Rate Change Points Freddie Mac 30 Yr. Fixed 3.69% +0.14 0.80 15 Yr. Fixed 2.93% +0.16 0.80 5/1 Yr. ARM 2.80% +0.09 0.30 Updates Weekly - Last Update: 2/10 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 3.83% +0.05 0.40 15 Yr. Fixed 3.16% +0.15 0.47 30 Yr. Jumbo 3.62% +0.03 0.35 Updates Weekly - Last Update: 2/9 MBS / Treasuries MBS Live Recap: Comic Misdirection Between Headlines and Markets (Updated Video) Comic Misdirection Between Headlines and Markets Geopolitical issues remain at the forefront as far as financial markets are concerned, but only due to the absence of anything new or interesting on the inflation/Fed front. Twitter (something that markets actually pay attention to) was ablaze with various headli... (read more) UMBS 30YR 3.0 100.17 -0.27 Price / Yield Change MBS UMBS 3.0 100.17 -0.27 UMBS 3.5 102.50 -0.25 GNMA 3.0 100.98 -0.30 GNMA 3.5 102.80 -0.19 Pricing as of: 2/14 5:21PM EST 10 Year US Treasury 1.9910 +0.0729 Price / Yield Change US Treasury 2 YR Treasury 1.579 +0.091 5 YR Treasury 1.916 +0.084 7 YR Treasury 1.995 +0.074 10 YR Treasury 1.991 +0.073 30 YR Treasury 2.288 +0.053 Pricing as of: 2/14 5:21PM EST Latest Video The Fed no longer has a first-best policy decision, says Mohamed El-Erian The Fed will chase the balance sheet more than aggressive rate hikes, says ... 'A March rate hike is a ratification of what the market's already done' say... St. Louis Fed Pres. Bullard on inflation: We need to 'front-load' tightenin... Around the Web Calculated Risk Blog A Few Comments on Inflation Calculated Risk Blog Housing Inventory February 14th Update: Inventory Down 2.5% Week-over-week; New Record Low CNBC Bullard say the Fed needs to 'front-load' tightening because inflation is possibly accelerating Calculated Risk Blog Six High Frequency Indicators for the Economy Reuters U.S. consumers' inflation expectations lower in January, NY Fed survey finds CNBC U.S. Treasury yields edge lower on Russia-Ukraine fears nasdaq.com Fed's Daly: Being too aggressive on rate hikes could be destabilizing CNBC The Fed is likely to still take a measured approach to rate hikes despite calls for bigger action The Basis Point Mortgage servicing giant Mr. Cooper hires fintech Sagent to power $676b portfolio. Firms will combine tech to serve $12t industry. Reuters Ukraine invasion could come any time as Russia masses more troops, says U.S Market Watch Kansas City Fed president backs asset sales but reluctant on 50-point hike in WSJ interview CNBC 10-year Treasury yield inches lower but holds above 2% as inflation spikes Calculated Risk Blog Q1 GDP Forecasts: Slightly Positive

© 2022 Mortgage News Daily, LLC. | 19701 Bethel Church Rd. | Cornelius, NC 28031 Interest rates displayed are national averages and for informational purposes only. Actual rates from lenders may vary based on several factors including, but not limited to, credit worthiness, ability to replay, credit score, down payment, loan term, etc. This email was sent to: newsletter@newslettercollector.com. Go here to UNSUBSCRIBE from this email.