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You may have heard that Warren Buffett’s Berkshire Hathaway bought shares in a pair of home builders last quarter.The company released its latest 13-F yesterday, revealing the buys during the second quarter.This has led to a lot of speculation about why they’d be buying stock in home builders, which have struggled of late due to a lack of affordability.Is something expected to change sometime soon? And if so, what exactly would make these companies all of a sudden attractive?Perhaps the thought of lower mortgage rates is behind theWhat Does Berkshire See in the Home Builders?During the second quarter, Berkshire Hathaway purchased a whopping 5.3 million shares of Lennar (NYSE:LEN).A quarter earlier, the company loaded up on 1.8 million shares to add to the 200,000 shares it bought back in 2023, bringing their total above seven million shares.It was also revealed that Berkshire acquired 1.5 million shares of D.R. Horton (NYSE:DHI) in the first quarter before selling 27,000 of those shares a quarter later.Berkshire had previously owned DHI stock, acquiring six million shares in Q2 2023 and unloading them by the fourth quarter of that year.Now they appear to be back on the builders, but why? Why at a time when the housing market seems shaky, and affordability remains poor?Oh, and new home inventory keeps ticking higher and is now approaching 10 months of supply.Outside of the spike in the second half of 2022, when mortgage rates surged from sub-3% levels to 7%, newly-built inventory hasn’t been higher since the Great Financial Crisis (GFC).It’s possible they just saw a bargain, with Lennar shares trading as high as $178 last September before falling to nearly $100 in April.Similarly, D.R. Horton shares nearly touched $200 late last year and then tumbled to around $125 per share in the first quarter.So it’s perfectly feasible that they just saw a big drop in share price and felt it was a value play, perhaps around Liberation Day.But you still need to have a belief that they’ll perform well in the near future.And in order to that, they’ll need to keep selling homes for a profit, despite poor buying conditions today.How Lower Mortgage Rates Could Reignite the Housing Market and Help the Big BuildersD.R. Horton and Lennar are the two largest home builders in the country, which has its advantages.One of them is being able to offer mortgages via their own in-house lending units, DHI Mortgage and Lennar Mortgage.When you look at housing affordability, it eroded quickly due to the unprecedented shift in mortgage rates, as seen in the chart above from ICE.This is mainly why home builders now offer massive mortgage rate buydowns, to keep affordability in range, even without lowering prices.However, that also costs them a lot of money, and if they can get more buyers in the door without that cost, their margins would improve once again.Lower mortgage rates could turn things around in a hurry. For example, a 1% decline in mortgage rate is akin to an 11% price drop.So if mortgage rates were able to come down some, the builders would have an easier time unloading inventory.A lot of people seem convinced all of a sudden that mortgage rates are coming down, largely because they think the Fed is going to become more accommodative once Chair Jerome Powell exits in May.While that’s not necessarily how it works (the Fed doesn’t set mortgage rates), they can lower the fed funds rate.That would lead to lower rates on HELOCs without question (since prime and the FFR move in lockstep), and could arguably lead to lower rates on adjustable-rate mortgages (ARMs) as well.At the same time, a cooling economy could bring long-term mortgage rates like the 30-year fixed down too if the data continues to support that narrative.The latest jobs report was what pushed mortgage rates back toward the lower-6% range, and if it continues into coming months, rates will likely drift even lower.Of course, you’ve got the trade-off of a weaker economy, which means home buyer demand could take a hit too.But lower rates could certainly provide a tailwind for the home builders and allow them to clear their inventory much easier.Perhaps Berkshire is banking on another leg up for the housing market on this theory. Or, as alluded to earlier, they just saw a value play, and could be holding for only a short period. Time will well.Read on: Home Builders Are Advertising Monthly Payments Instead of Home Prices to Clear Inventory Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.Latest posts by Colin Robertson (see all)

ICE Mortgage Technology is putting off the planned sunset of the Encompass SDK system, according to a memo provided by the company to National Mortgage News.SDK is shorthand for software development kit. It, along with certain other legacy systems, were supposed to go away on Oct. 31. ICE first announced the transition in September 2024.The news was shared by a number of LinkedIn posters on Friday afternoon.SDK users were supposed to move to products which are Encompass API compliant or are native to the loan origination system.In addition, legacy system users were supposed to shift ordering appraisal, closing fees, documents, flood, fraud, mortgage insurance, pricing, tax service, title and verifications to Encompass Partner Connect, EPC for short.While many customers were ready for this transition, others needed additional time, the memo stated.So ICE Mortgage extended the deadline for both the Encompass SDK and legacy service ordering transitions to Dec. 31, 2026. "For companies that have requested it, these extensions offer additional time to thoroughly test and refine processes without disrupting business operations," the memo said. "For the majority of our partners and lenders, we encourage you to maintain your momentum and complete the transition as soon as possible to take full advantage of the enhanced workflow and functionality."While Encompass SDK will continue to be maintained, no new features will be added starting Nov. 1, the day after the sunset was supposed to occur."For those needing transitional SDK access after December 2026, special access will be required and monthly fees applied," a resource page said. A countdown calendar on the page notes users have 502 days left to transition off of SDK.Among the legacy technologies affected by the EPC transition are ePass, TQL, EMN, and PSDK (Partner Software Development Kit).A separate page notes over 70% of service orders now come through EPC; more than 90% of orders in some categories. It has its own countdown calendar.

Ask any real estate expert about the most important factor in buying a home, and you'll hear the same thing: location, location, location. It's a cliché because it's true — and for today's first-time buyers, it's also one of the biggest hurdles. Finding a place that checks the boxes for lifestyle and amenities while staying within budget is no small feat in an era of record prices and high interest rates.To help, finance site Wallethub ranked 300 U.S. markets on quality of life, market attractiveness and affordability, naming the top 10 cities for first-time buyers.We spoke with local real estate pros in each of these cities to learn why they stand out — and why new homeowners are putting down roots there.

A possible shift in the composition of the Federal Reserve's portfolio of Treasury holdings could result in the central bank buying nearly $2 trillion of bills over the next two years, enough to absorb nearly all of the Treasury's issuance during that period, according to Bank of America Corp. Strategists Mark Cabana and Katie Craig expect the Fed to adjust its portfolio to better match assets and liabilities in a move that will protect against interest-rate risk and negative equity while bringing down the duration of their liabilities. It would also end up being a much-needed windfall for the Treasury Department, which has been issuing billions of dollars in short-term debt to fund a growing deficit and replenish its cash balance following last month's increase of the debt ceiling.READ MORE: Experts weigh Fannie-Freddie merger prospects"If you play around with some of the Fed's balance sheet and assume mortgages are reinvested into bills, the balance-sheet goes into bills and they take maturing Treasuries and roll into bills, that's approximately $1 trillion," Cabana, who is head of US interest rates strategy at BofA said in a separate interview. "It's somewhat uncanny that Treasury issues $1 trillion of bills and the Fed buys them. It's a new source of demand at the very front end." The monetary authority could shift nearly 50% of its assets into Treasury bills to match their short-term liabilities — mainly reserves and reverse repurchase agreements — as well as absorb changes in the Treasury's cash balance, the Bank of America strategists wrote in a note Friday. They estimate T-bill supply to be $825 billion in fiscal year 2026 and $1.067 trillion in fiscal year 2027, assuming the Department keeps the size of the coupon auctions steady until October 2026. READ MORE: Economists now leaning towards September Fed cutSuch a move from the Fed would ensure demand for short-term government debt remains robust, easing concerns that massive Treasury issuance would drain market liquidity. While the Fed is still unwinding its balance sheet — a process known as quantitative tightening — recent rhetoric from policymakers suggests discussions about the portfolio could appear in the minutes of the July Federal Open Market Committee gathering that are set to be released on Aug. 20, the strategists said. Governor Christopher Waller has suggested the central bank adopt this approach to ensure "optimal composition." A recent note from a senior Fed adviser also advocated for the adoption of such a policy. Fed officials have left their benchmark interest rate unchanged this year after a series of reductions in late 2024. As a result, total net income from the System Open Market Account remains negative as the result of interest paid out on bank reserves and other liabilities are higher than the income earned on its bond holdings, resulting in pressure on the Fed over other expenses. A Dallas Fed working paper that reviewed three types of asset composition, and the pros and cons of each approach concluded that duration matching is effective at reducing income volatility, and a diversified portfolio is more feasible with less concentration risk.There's a few ways the central bank can quickly grow their bill holdings, according to BofA. The first is reinvesting the maturities and prepayments of mortgage-backed securities, which would amount to $10 billion to $20 billion per month. Another option is growing reserve balances to offset growth in non-reserve liabilities to keep them stable, which would require about $10 billion to $20 billion per month. The last option would be to reinvest all maturing Treasury coupons into T-bills, which would result in about $20 billion to $60 billion per month in purchases. It's likely the central bank will begin adjusting their reinvestment strategy immediately after ending its balance-sheet runoff, which Cabana and Craig expect in December 2025 at the latest.

Federal legislation banning traditional mortgage trigger leads has cleared the Senate and is likely to be signed into law in the coming weeks. When that happens, lenders will lose a familiar — and often crowded — way to identify borrowers after a credit pull.For some, that will feel like losing a trusted tool overnight. But in my 20-plus years in this business, I've seen that every major change creates an opening for those who adapt first. There's still a path to keep your pipeline healthy, your compliance team comfortable, and your competitors guessing — if you start making moves now.The first step is to get clear on what's still permitted. While inquiry-based trigger leads will be off the table, the law leaves room to monitor borrowers when you have an existing, documented relationship. That includes situations where your company originated the borrower's current mortgage loan or is the current servicer, borrowers who've given you explicit consent, and customers of banks or credit unions with active accounts. Years ago, I learned the hard way that not knowing exactly who falls into those categories can cost you business. Now's the time to identify them — and get it on paper.Next, make borrower consent a standard part of your process. Add opt-in monitoring language to every application, disclosure, and servicing touchpoint. I've seen lenders treat this as an afterthought — until they realize they've just lost sight of hundreds of in-market borrowers they could have legally monitored. That single adjustment will protect one of your most valuable data sources when the rules change.Just as important — it's time to break the habit of relying on triggers alone. Triggers tell you a borrower is in the market only after they've applied somewhere else. Predictive monitoring changes the timing, flagging borrowers before they start shopping. When you combine those insights with listing alerts and equity monitoring, you can be in the conversation weeks or months before the other guy even knows there's a deal on the table. I've sat in meetings where this early reach made the difference between keeping a customer and losing them to a competitor.Clean, accurate data will be your other advantage. In a tighter regulatory environment, you need to prove relationships quickly and without errors. That means scrubbing your CRM, validating origination data, and making sure every contact record is current. It's not glamorous work, but I've never seen a lender regret doing it.And don't stop at defense. The lenders who come out ahead in the post-trigger era will be the ones using early borrower intelligence to grow — targeting markets where demand is building, re-engaging past customers before they drift away, and being first to make the right offer at the right time.This isn't the end of borrower monitoring. It's a reset. A chance to move from chasing leads to building relationships before your competition even sees them. Lenders who take that shift seriously won't just survive this change — they'll own it.

Luke Sharrett/Bloomberg The ongoing tariff-impacted rise of material and service prices, alongside challenging credit conditions, are a double whammy hitting residential construction, according to analysis from the National Association of Home Builders.Prices for goods and services used in residential construction came in 2.8% higher in July on an annual basis, marking the largest increase in two years, the trade association reported. On a monthly basis, the cost of homebuilding inputs rose 0.2%, slowing from an 0.8% increase in June. Calculations come from NAHB's analysis of the U.S. Bureau of Labor Statistics' Producer Price Index data, which excludes capital investment, labor and import costs.  While tariff costs aren't directly accounted for in the PPI, which only factors in domestically produced goods, an indirect effect would show up when they are passed on and lead to price adjustments, NAHB researchers said."Announced tariffs in recent months have resulted in material increases across a few different goods, specifically certain metal products and equipment," wrote Jesse Wade, NAHB's director of tax and trade policy analysis, in a research post. Among individual products, parts for construction machinery, and metal molding and trim saw prices spike with the former increasing 31.4% and the latter 25.6% in the last 12 months following the imposition of steel and aluminum tariffs earlier this year. Of the two components in NAHB's analysis, input goods, which account for approximately 60% of NAHB's residential construction index, climbed up 2.4% year over year. Services, such as trade, transportation and warehouse facilities that make up the remaining 40%, accelerated 3.3% year over year.On a monthly basis, input goods, including energy, rose 0.4%, while services decreased 0.2%.Credit conditions for builders continue a troubling patternThe latest PPI data comes at the same time the association reported credit conditions for commercial lending to builders tightened for a fourteenth straight quarter. In a separate NAHB index covering credit availability for land acquisition, development and construction, the reading dropped to a score of -12.3, with negative values indicative of quarterly tightening.   NAHB members who saw tighter credit reported reduced lending amounts, which was cited by 60% of those affected. More than half, or 53%, said lenders had required personal guarantees, while 47% noted they increased interest rates or offered no financing whatsoever. While credit tightening trends over the past year have been "relatively modest", the cumulative effect may prove more onerous. "After 14 straight quarters of tightening, many builders are probably wondering how much room lenders have left to tighten further," wrote Paul Emrath, president for survey and housing policy research.    Negative builder sentiment persistsPressures arising from an array of different tariff policies, home price affordability and mortgage rates have driven NAHB's index of homebuilder sentiment to some of its lowest marks in years in 2025. In July, the index showed minimal improvement to come in at a score of 33, as 38% of respondents resorted to price cuts that month.The score was up one point from June's reading of 32. Set at a neutral benchmark of 50, values below that number indicate more pessimistic sentiment in near-term outlook for the industry. The index has been stuck in negative territory for 15 straight months, NAHB said.The group's next homebuilder sentiment index release is scheduled for Aug. 18. 

Andrew Harrer/Bloomberg Two consumer groups are urging Federal Housing Finance Agency Director William J. Pulte to abandon his directive that Fannie Mae and Freddie Mac explore counting cryptocurrency holdings as reserves in single-family mortgage underwriting.In a letter sent Thursday, the Consumer Federation of America and the National Consumer Law Center said the move, which was announced on social media rather than through the standard regulatory process, would expose the two government-sponsored enterprises and taxpayers to additional risks and invite unsound lending. "Underwriting standards at the GSEs must always account for borrowers' ability to repay and support the broader safety and soundness of the housing finance system," the consumer groups wrote, adding that cryptocurrencies "are notoriously volatile and offer no meaningful indication of a borrower's long-term financial stability or ability to pay their mortgage.""This proposal will expose taxpayers to increased risk of losses, open the door to new forms of predatory and unsafe lending targeted at vulnerable borrowers and ultimately threaten the safety and soundness of the Enterprises and the broader financial system," the groups added.Government-sponsored enterprises like Fannie Mae and Freddie Mac are backed by taxpayers, In 2008 the government bailed them out to prevent a housing market collapse.The consumer groups argued that even stablecoins — assets marketed as steady stores of value, often pegged to fiat currencies — have seen volatility.The letter also raised concerns about broader concentration risks, the crypto industry lacking regulatory oversight and the crypto market's historical susceptibility to fraud and hacking.The consumer groups cited the collapse of FTX, a cryptocurrency exchange, as well as a North Korean hacking operation in February, the largest cryptocurrency heist in history. In that incident, $1.5 billion in Ethereum tokens was stolen from Dubai-based cryptocurrency exchange ByBit.The letter's signatories also said that embedding crypto in federally backed underwriting standards could give consumers the impression crypto assets are as stable and trustworthy as traditional reserves, distorting the broader mortgage market in the process."The 2008 crisis … was driven by the widespread underwriting of predatory, unaffordable mortgages, including in the subprime market," the consumer groups wrote. "Many of the loans that triggered the Great Recession were made without a reasonable expectation that borrowers could meet their mortgage obligations; similarly, a system built on crypto-related assets threatens to grow the market based on what may turn out to be a house of cards." Pulte pushes Fannie, Freddie to count crypto assets The regulator and conservator of two influential loan buyers with government ties has directed them to look at digital currency's use in qualifying borrowers. If niche borrowers wish to qualify for mortgages based on the cryptocurrency assets they own, the groups argue, they should turn to private non-qualified mortgage lenders that bear their own risk, leaving taxpayers unexposed."If crypto investors are seeking tailored mortgage products," they wrote, "that risk should remain in the private market — not in taxpayer-backed institutions."Democratic senators recently raised questions about Pulte's proposal, saying in a letter that the change being contemplated could introduce volatility and crime into the housing finance system. They also raised concerns about potential conflicts of interest, given Pulte's role as board chair of both GSEs, his spouse's crypto holdings and the close relationship between President Donald Trump's family and the digital asset industry.

Russ Vought, acting director of the Consumer Financial Protection Bureau, is also the director of the Office of Management and Budget. Al Drago/Bloomberg In a major win for the Trump administration, a federal appeals court on Friday ruled against the Consumer Financial Protection Bureau's union, allowing the bureau's acting Director Russ Vought to fire up to 90% of bureau's staff. By a 2-1 vote, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit found that the CFPB director can fire union employees through a mass reduction-in-force, or RIF. The court found against the National Treasury Employees Union, which sued acting CFPB Director Russell Vought in February to halt mass firings.The appellate panel ruled that Vought's effort to conduct RIFs did not constitute a final agency action—or even a policy—and therefore, was not reviewable by the courts under the Administrative Procedure Act. "This challenge is not viable. It cannot be brought under the APA because that statute provides a cause of action to challenge discrete, final agency action, which claims here do not target," Judge Gregory G. Katsas wrote. "We hold that the district court lacked jurisdiction to consider the claims predicated on loss of employment, which must proceed through the specialized-review scheme established in the Civil Service Reform Act."Katsas was joined by Judge Neomi Rao, who was also appointed by Mr. Trump. Judge Cornelia Pillard, an Obama appointee, dissented. The ruling lifts a district court's preliminary injunction that kept the CFPB from issuing a reduction-in-force, or RIF.  The appeals panel's opinion is not the last word in the case. The union has seven days to appeal to appeal to the full DC Circuit. The union had alleged that Vought acted in an "arbitrary and capricious" manner when he issued a RIF, claiming it was in violation of the APA, which requires reasoned explanations when agencies make regulatory changes. In her dissent, Pillard wrote: "Neither the government nor the majority seriously disputes that, if we accept the district court's findings of fact, Defendants' actions violated both the CFPB's organic statute and the constitutional separation of powers.""My colleagues nonetheless vacate the preliminary injunction because they deem the decision to unilaterally abolish the CFPB not a type of agency action we are authorized to review," she wrote. "That constricted view of our statutory and equitable power contravenes statutes, precedent, and basic principles of our constitutional government."Jennifer Bennett, who defended the CFPB's union, noted that the ruling does not go into effect immediately. "If this decision is allowed to stand, it will shift the balance of power toward corporations at the expense of American families' financial security," said Bennett, a principal at the law firm Gupta Wessler LLP, in an emailed statement. "Without the full force of the Consumer Financial Protection Bureau—an agency Congress created specifically to protect consumers—millions will lose critical safeguards against predatory financial practices."The NTEU's National President Doreen Greenwald, said the union is "committed to continuing the fight for the CFPB employees," and that the panel had "inexplicably paved the way for a widescale reduction in force and dismantling of operations." "This decision could lead to widescale firings, which would result in the cessation of the Bureau's important work protecting consumers," Greenwald said in an emailed statement.Sen. Elizabeth Warren, D-Mass., who founded the CFPB, said Trump administration "cannot yet resume its illegal attempt to shut down the CFPB," because the panel's decision won't take effect until the union has a chance to ask the full D.C. Circuit to review the case. "Today's divided panel decision willfully ignores the Trump Administration's unprecedented and lawless attempt to destroy an agency created by Congress that has helped millions of families across the country.  As Judge Pillard emphasized in her dissent, the evidence against Administration officials is 'damning' and the majority hid behind technicalities to let them off the hook," Warren said in a press release. "The fight continues for the agency that has returned over $21 billion to Americans who were scammed or cheated by big banks and giant corporations."The appeals panel's opinion is not the last word in the case. The National Employees Treasury Union is expected to appeal en banc to the full DC Circuit. The CFPB had 1,755 employees in February and more than 250 staffers have retired, taken another job or taken a buyout under the so-called "Fork in the Road," offered early in the Trump administration. The court did not address how many employees are needed for the CFPB to enforce the 18 federal consumer finance laws that it oversees. By statute, the CFPB has exclusive supervisory and primary enforcement authority over the largest banks with more than $10 billion assets as well as nonbanks. In April, the CFPB sent reduction-in-force notices to roughly 1,500 employees across the agency, which were paused by a district court, and the layoff notices rescinded. However, the CFPB was ordered to make "a particularized assessment" to determine which employees were "unnecessary" to fulfill the bureau's legally-mandated functions.At the time, the same appeals court's panel sided, in part, with the Trump administration by allowing some firings at the CFPB to resume. The panel had narrowed a district court's injunction.Vought had appealed the injunction claiming it restricted his ability to reorganize and reduce the CFPB's staff. The Department of Justice, defending Vought, has argued that a district court injunction was an unwarranted intrusion on the executive branch's authority to manage the CFPB, and that the union's claims lacked legal and factual basis.The CFPB has not responded to requests asking about the number of employees currently being paid by the agency not to work.At an evidentiary hearing in March, a lawyer for the Justice Department sought to portray the Trump administration's actions as a normal part of a government transition, saying that CFPB employees were "against the president's agenda." Vought issued a stop-work order in February, closing the agency's Washington, D.C. headquarters, cancelling more than 100 contracts for all expert witnesses, cybersecurity and research. This brought on questions from the union about whether the CFPB was performing legally-required functions. Vought has not commented publicly on the CFPB. Many CFPB employees have said they took President Trump at his word when he said in February that he wanted to "get rid of" the CFPB, which would directly contradict the text and purpose of the Dodd Frank Act. The CFPB is subject to the union's collective bargaining agreement. Once the list of people to be fired has been determined, the employees are supposed to be given 60 days notice.

News that Opendoor CEO Carrie Wheeler is leaving the company boosted the company's stock price to its third-highest level since the run-up began at the start of July.The announcement was made before trading started on Friday morning. When the markets did open, Opendoor began the day at $3.415 per share and in early trading hit a high of $3.485 before settling back to $3.405 at 11 a.m. On Thursday, it closed at $3.04, but it opened the day at $2.29.Wheeler's departure as CEO as well as board chair is effective immediately; she will stay through the end of the year as an advisor to the board to aid in the transition, a Securities and Exchange Commission filing said.Wheeler's resignation follows a pressure campaign led by institutional investors and supported by co-founder Keith Rabois, according to articles on Inman.However, the company said Wheeler approached the board in mid-2025, at which time it began a succession planning process, retaining Spencer Stuart to assist.It comes shortly after the company cancelled a special stockholders meeting to consider a possible reverse split in order to regain compliance with Nasdaq listing standards. That became unnecessary as Opendoor has been trading above the $1 per share requirement since mid-July."We've built a stronger, more focused company, expanded our offerings, and set the stage for the future — all in one of the most challenging real estate markets in history," Wheeler said in a press release. "I believe now is the right moment for a leadership transition, and I'm confident the company is on a strong path forward."Wheeler became CEO in December 2022 after serving as chief financial officer, replacing co-founder Eric Wu in that role.In the meantime, the board promoted Shrisha Radhakrishna to president and interim principal executive officer. Since last November, Radhakrishna was its chief technology and product officer. Before then he held a similar role at LegalZoom and also worked for Intuit.Eric Feder, president of LenX, Lennar Homes' strategic investing arm, has been named lead independent director."The company is well positioned to focus on its considerable data and unique assets in today's high-tech AI world," Feder said. This includes the continued scaling of Key Connections, the rollout of Cash Plus and continuous improvement of the core cash-offer business.Wheeler will be well compensated for her advisor services, the SEC filing said."During the Advisory Term, Ms. Wheeler will be entitled to receive cash compensation of $62,500 per month upon completion of each month of services during the Advisory Term, and reimbursement of COBRA premiums," the filing said.  "In addition, Ms. Wheeler's outstanding time-based equity awards will continue to vest during the Advisory Term, subject to Ms. Wheeler providing advisor services pursuant to the Advisory Agreement through each applicable vesting date."The leadership change also follows the Aug. 12 downgrade of Opendoor's stock rating to underperform by Keefe, Bruyette & Woods analyst Ryan Tomasello.On its second quarter earnings call, Opendoor said it was undertaking a strategic pivot to a real estate agent led distribution model."While high retail interest may continue to support valuation, we downgrade the shares to underperform from market perform as we expect widening losses in 2H coupled with uncertainty from the strategy pivot to weigh on the shares, which trade near the high end of historical multiples," Tomasello said.The strategy has numerous risks which in the near term outweigh advantages, and so he is advising investors to take a wait and see approach to Opendoor's stock."In particular, we are cautious on the road to stabilized profitability that will be highly dependent on adjacent services monetization," Tomasello said. "Further, well-entrenched incumbents are increasingly making progress on a more vertically integrated housing transaction."On a GAAP basis, Opendoor lost $29 million during the second quarter. This compared with losses of $85 million in the first quarter and $92 million in the second quarter of 2024.This was helped by an increase in revenue, to $1.6 billion, a gain of 36% from the first quarter and 4% one year ago.

Lenders looking to cut costs are more willing to lay off their back office staff than slash other business expenses, according to a new Fannie Mae survey.While cost-cutting wasn't firms' top business priority, more senior mortgage executives placed prospective layoffs above trimming general and administrative expenses. The findings in the Mortgage Lender Sentiment Survey, which reached industry leaders from 217 different nonbanks, depositories and credit unions in early May, showed mixed results for other lender sentiments.Overall, 37% of respondents said they're prioritizing "streamlining business processes", compared to 29% of executives focusing first on shaving expenses. Executives defined streamlining such as improving employment and income verification, or utilizing artificial intelligence.For firms weighing trimming budgets, a combined 59% of bosses said terminating back-office staff was their top, or second area to cut. That compared to a combined 35% of respondents focused on minimizing general and administrative expenses such as facilities and equipment, and 22% who pointed to loan officers. The survey didn't touch on The answers are a reversal from last spring, when companies said they'd prioritize general and administrative savings over layoffs. Lenders however are still more conservative than the past few springs, when the majority of industry leaders facing a rising rate environment told Fannie Mae they'd lean heavier into cutting from both areas.  Mortgage firms aren't fully comfortable with e-notesThe survey also revealed lender frustrations with electronic promissory note adoption, with just 22% of executives telling Fannie Mae their company was using them today. While 62% of respondents said they plan to use e-notes in the next two years, they described numerous roadblocks to utilization. A combined 46% of current e-note adopters said their first or second-largest challenge was investor or business partners not supporting the technology. While operational challenges with e-notes rated highly, lenders also cited their ineligibility for certain loans. More hurdles included investor restrictions on Remote Online Notarizations, and resistance from settlement partners. "Several of our correspondent lenders have not invested in the process to start using e-notes," wrote a leader of one unnamed mid-sized institution in the survey. The mortgage industry as of April 1 had 2,513,663 unique e-notes registered on the Mortgage Electronic Registration Systems eRegistry, according to Fannie Mae. Independent mortgage banks are more likely to use them than credit unions and depositories. Those familiar with the technology cited benefits including faster funding and reduced errors. "Because eNotes have a cleaner paper trail with less backend risk, perhaps the (government-sponsored enterprises) offer some sort of pricing advantage," wrote another source from an unnamed large institution.Lenders temper their housing forecastsThe majority of mortgage leaders in May conceded the difficulty in affording a mortgage, and are resetting their home price growth expectations. The share of executives surveyed who expect home prices to stay the same in the next 12 months grew at the highest level since 2021, according to Fannie Mae.  A leading 45% of consumers meanwhile in the GSE's Housing Market Survey still expected prices to rise. Prices are cooling nationwide, and the approximately 1.36 homes for sale in June was the most since 2019, a Zillow report found. Numerous housing reports have also cited declining prices in major metropolitans including cities popular during the low-rate era earlier this decade. Lenders were also split on their economic outlook, with a near-equal share suggesting the nation was on the right, or wrong track. Sixty-four percent of consumers meanwhile told Fannie Mae in May they were concerned about the future.Shaky inflation and job data earlier this month drove mortgage rates to a 10-month low, and spurred a surge in refinance activity. And while economists anticipate the Federal Reserve to cut short-term rates next month, a growing number believe a rate drop won't come until December.