After playing defense in 2022, investors appear to be willing to deploy capital even as the MBS and ABS markets face numerous headwinds. Attendance at this week’s SFVegas conference hit a record level.
Potential homebuyers may be adapting to higher interest rates and could gravitate back to the housing market as rates have fallen recently, according to Harvard Joint Center for Housing Studies’ Chris Herbert.
Rate locks declined in December and loan applications fell to levels last seen in 1996. Interest rates are to blame. Economists offer some glimmers of hope for the second half of the year.
The share of homebuyers using all cash to purchase homes rather than a mortgage is increasing. Some affluent homebuyers are avoiding purchase mortgages due to high interest rates.
Year-to-date, home equity conversion mortgage volume is up a dramatic 49.9% compared to last year. But volume dropped sequentially for the first time in seven quarters. (Includes three data charts.)
First Republic Bank isn’t increasing its interest rates for jumbo mortgages at the same pace that the Fed is increasing interest rates, leading to lower margins for the bank.
As bad as originations were this year, 2023 is projected to be worse. Purchase-mortgage business is expected to decline even as mortgage rates come down and home prices level off.