Category: Mortgage News

Fannie Mae and Freddie Mac are running away with new home financing. The National Association of Home Builders (NAHB) estimates that conventional loans were behind 76.3 percent of all new home sales in the second quarter of the year. David Logan, writing in the NAHB Eye on Housing Blog, says this is the largest share those loans have held since the beginning of the Great Recession in 2008. It was 5.1 percentage points higher than the conventional loan share in Q1 and 9.5 points more than in the second quarter of 2020. The growth in conventional lending was largely at the expensive of FHA. Those loans financed 12.1 percent of new home sales in Q2, down 6.7 points from the previous quarter and 8.3 points year-over-year. Logan said that the four-quarter moving average in the FHA share had been moving higher since Q3 2018, however, the second quarter data depressed that average by 1.1 point.

The U.S. Census Bureau says July’s expenditures on all types of construction was at a seasonally adjusted rate of $1.569 trillion compared to $1.563 trillion in June. This is an increase of 0.3 percent and 9.0 percent higher than expenditures in July 2020.

On a non-adjusted basis, total spending for the month was $144.046 billion, up from $141.545 billion the previous month. For the year-to-date (YTD), spending has totaled $883.208 billion, a 6.2 percent increase over spending in the first seven months of 2020.

With the exception of residential, spending in every construction category is down YTD. The biggest deficits are in spending on office construction and public safety. Both are just over 30 percent below their levels during the same period last year.

The Department of Housing and Urban Development (HUD) has announced a series of actions aimed at assisting in the Biden Administrations goal of creating, preserving, and selling about 100,000 affordable houses over the next three years. HUD Secretary Marcia L. Fudge said, “These actions will expand access to critical capital for state Housing Finance Agencies, empower local communities to build more affordable housing using the historic investments contained in the American Rescue Plan, and advance equitable housing policies such as inclusionary zoning practices.” The Mortgage Bankers Association (MBA) released the following statement from its president and CEO Bob Broeksmit in support of the initiatives. “MBA strongly supports the administration’s efforts to increase the housing supply by encouraging the construction and rehabilitation of affordable apartments and homes for renters and first-time buyers.

Freddie Mac reported this week that its total mortgage portfolio increased at an annualized rate of 8.4 percent in July compared to a 12.9 percent gain in June.  The portfolio balance at the end of the period was $3.033 trillion compared to $3.021 trillion the prior month and $2.518 trillion a year earlier. Purchases and Issuances totaled $85.899 billion, and Sales were ($1.110) billion. The June numbers were $92.609 billion, and ($1.369) billion, respectively. Single-family refinance loan purchase and guarantee volume was $40.5 billion in July compared to $50.9 billion in June, representing a 50 percent share of total single-family mortgage portfolio purchases and issuances, down from 59 percent the previous month.