Data

housing prices are on the rise this summer selling season even though inventory is at an extreme low, according to a recent report. May held many records for the report including the rise in home prices. When over 1,000 buyers were asked what a 5 percent rate hike would do to their home buying plans, despite the recent rate hike, buyers overall feel their search won’t be affected.

The digital evolution continues, as not one but three major financial players make moves toward a more FinTech-driven future. In a two-day span, Morgan Stanley, Misys, and D+H all announced initiatives that could shape the trajectory of the industry. At its Tuesday's Financials Conference, Morgan Stanley, a financial services and wealth management firm, announced it will launch a digital mortgage platform in 2018. Meanwhile, Misys, a financial software provider, and D+H, a financial technology distributor, announced the two firms will merge to form Finastra. Finastra will be the third-largest FinTech company in the world.

On Tuesday the May Quicken Loans National Home Price Perception Index and National Home Value Index was released, showing that while home prices continue to rise, they are not rising as fast as homeowners expect. There are, however, cities, such as Denver, Dallas, and Seattle, where appraisals are higher than what homeowners expect. Philadelphia, Baltimore and Chicago had the largest disparity between appraisals and homeowner expectations.

Overall mortgage delinquency rates were down in the month March, according to a recent report. Most rates were at a position lower than what they have been in over 10 years, but early-stage delinquencies saw a 17 year low. According to the report, this can be attributed to stringent post-crisis underwriting standards as well as better fundamentals.

Recently, the April 2017 Consumer Credit report was released, revealing all of the outstanding credit extended to individuals for household, family, and other personal expenses, excluding loans and real estate for the past month. April marked the smallest increase in consumer borrowing in six years. The Federal Reserve reported total consumer credit rising 2.6 percent, increasing the $8.2 billion in April compared to March’s revised $19.5 billion.

Today’s ever-increasing home prices have made their mark: Buying a home is now unaffordable in more than half of the nation’s biggest markets. And in California? The straits are even more dire. According new analysis, the median price of homes for sale is historically higher than average in the majority of America’s largest metros, meaning buyers need to devote a larger-than-expected share of income toward mortgage payments and, more significantly, down payments.

Next Friday, the Department of Housing and Urban Development will release their May New Residential Construction Activity report. Last month, new privately owned residential construction permits fell 2.5 percent, from 1,260,000 to 1,229,00. You can see more on this plus what’s to come next week in The Week Ahead.

Local job markets have improved and mortgage rates are at a historic low, however U.S. homeownership rates are stagnant at a 50-year low. The main barriers experts are seeing, according to a recent report, are post-foreclosure stress disorder, mortgage availability, the growing burden of student loan debt, single-family housing affordability, and single-family housing supply shortages. Industry professionals explain what needs to be done in order for this to change.

Recent data hints that the 20 percent downpayment may not be entirely necessary anymore. First-time homebuyers are increasingly pursuing different vehicles to obtain their dream of being a homeowner. They also account for almost half the total homes purchased in the first quarter of 2017, a number which continues to rise.

The availability of mortgage credit has dropped more than a full percent over the last month, indicating lenders are continuing to tighten their credit standards. Overall mortgage credit availability fell 1.1 percent in May and 0.2 percent in April. Broken down by loan type, government credit availability saw the biggest drop, falling 1.9 percent over the month. Conforming credit dipped 0.3 percent, while conventional and jumbo credit availability headed the other direction, rising 0.2 percent and 0.8 percent, respectively. Jumbo loan credit availability, which has risen 13 out of the last 15 months, has helped to offset falling credit availability in other sectors.