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European Union flags near the EU Commission in Brussels, Belgium. Ksenia Kuleshova/Bloomberg As U.S. regulators grapple over a joint capital reform proposal, the future of international collaboration on bank supervision could hang in the balance.Last month, top finance officials from France, Germany and Italy — the three largest economies in the European Union — sent a letter to the European Commission, telling the governing body to prepare to adjust its own capital reform efforts, noting that the U.S. was expected to deviate from the internationally agreed-upon standards.Andrés Portilla, managing director of regulatory affairs at the Institute for International Finance, a trade group for global financial firms, said the officials were aiming to "Trump-proof" Europe's capital standards, pointing to the risk that a second term in office for former President Donald Trump could bring significant changes to or even an outright abandonment of the latest accord from the Basel Committee on Banking Supervision, known as the Basel III endgame."If there is an event where the U.S. decides not to implement those market rules, then Europe would have that ability to also suspend implementation or to change the rules altogether," Portilla said. "That's really what is being discussed at this stage, given the high levels of uncertainty around implementation here in the U.S."Portilla noted that the concerns are not limited to Europe. The Australian Prudential Regulatory Authority, the country's top banking regulator, addressed the Basel framework in its latest annual corporate plan, noting that the "risk of fragmentation" — meaning notable differences between jurisdictions — "remains elevated."But the EU letter, first obtained and reported on by Politico, goes beyond adjusting the latest capital standards from the Basel Committee. It also calls for the commission to reconsider regulatory standards writ large to "put stronger emphasis on the competitiveness of the financial sector, particularly banking, and its capacity to finance the economy" as part of a broader goal of "reversing Europe's declining competitiveness."The shift toward emphasizing domestic interests over financial stability consideration has some policy experts and advocates concerned. Dennis Kelleher, head of the consumer advocacy group Better Markets, said this mentality could result in regulatory jurisdictions competing with one another to create the most accommodating policies for their own banks, regardless of what it means for financial stability. "It's going to kill the international regulatory regime that is essential to preventing financial crises and catastrophes like the 2008 crash. Everybody goes their own way. I worry about my banks, and you worry about your banks," Kelleher said. "It is inevitably going to result in a race to the regulatory bottom. Therefore, we're going to end up with very minimally regulated banks and financial institutions … and that just means there are going to be more and bigger crashes and bailouts." Graham Steele, staff director of the Corporations and Society Initiative at Stanford Graduate School of Business and former Treasury official. Graham Steele, former Treasury Department assistant secretary for financial institutions, said pro-competition rhetoric has long been used to justify deregulation but, in reality, such moves are not a "panacea to fix broader economic issues."Steele, who left the Biden administration in January, said European officials have been questioning the U.S. commitment to the Basel Committee's latest standards for years, but recent events have emboldened them to begin edging away from their commitments. "Our own inability, because of domestic politics and other dynamics, to implement endgame has hampered our ability to push back on some of the things the Europeans are doing," Steele said. "There's a clear sense of opportunism here that, because we do not have our house in order, there's an opening for other countries to revisit some of these international principles that were established post-financial crisis."The letter comes as efforts by the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency to implement the Basel III endgame have been ground to a halt by a disagreement among the agencies. The original joint proposal from July 2023 would have increased capital obligations for the largest banks in the country by 19%. But after pushback and the threat of litigation from the banking industry, the agencies agreed to make changes to the proposal.Last month, Fed Vice Chair for Supervision Michael Barr said regulators had agreed upon revisions that would have narrowed the scope of the framework and increased capital requirements for the largest banks by just 9%. But an impasse on the FDIC's board of directors — ostensibly over the decision to re-propose the amended rule as opposed to finalizing it — has put the amendment on an indefinite hold.If the new proposal, as outlined by Barr, were finalized as is, it could raise alarms with other jurisdictions because of how it would deviate from the standards set out by the Basel Committee in 2017. Of particular concern, Portilla said, is the treatment of market risks, known as the Fundamental Review of the Trading Book.In a speech last month, Barr said the revised proposal would allow banks to use internal models to assess market risk, rather than standardized ones, as called for by the Basel Committee. Portilla said other jurisdictions are concerned the change would harm their bank's abilities to compete for global capital markets activity."If only one group of banks, let's say the European ones, apply those rules, then they feel they would be in a significant competitive disadvantageous situation," Portilla said. "And that's why the attention has focused on those rules, ultimately."Embedded differences elsewhere in each jurisdiction's regulatory framework make alignment difficult. In the U.S., many banks expressed concern about the overlap between the proposed FRTB change and the current measure of risk in the global market shock component of the annual stress test. Banks say this would result in them being charged twice for the same risks. Europe, meanwhile, has its own distinct regulatory requirements, including so-called Pillar II charges that are assigned based on specific risks at individual banks. The standards set by the Basel Committee are not binding and there is an expectation that each jurisdiction would have to make adjustments based on their own legal systems and existing frameworks. But, Steele said, adjusting for these differences in an ad hoc manner risks undermining the overall agreement. Bertrand Dumont, deputy director general of France's treasury. Nathan Laine/Bloomberg "If we want to depart from international standards in any sort of way, that gives rise to an argument that we are not being Basel-compliant. If we want to make special allowances for U.S.-specific products and services, that gives Europeans a hook to come back to us and say, 'Well, you've got your pet issue that you want an allowance for, here, we've got our things too,'" Steele said. "It leads to that kind of horse trading. You open yourself up to further negotiations, and negotiations down on the substantive level."A move away from interjurisdictional coordination would be welcomed by some in Washington. In a House Financial Services Committee hearing on international regulatory bodies in March, Rep. French Hill, R-Ark., argued that such groups have caused U.S. regulators to be "subsumed by European ideas." At that same hearing, Rep. Ritchie Torres, D-N.Y., asked, "Where did we get this notion that the United States, as the financial superpower of the world, must conform to European standards of banking?"But those involved in the Basel process — including Trump's choice for Fed Vice Chair for Supervision Randal Quarles — have said that such bodies tend to follow the U.S.'s lead on policy, rather than the other way around. Steele said it was advantageous for American regulators to engage in international forums, noting the old adage "if you're not at the table, you're on the menu."Still, large U.S. banks do not feel like their interests are being represented. One of the central complaints about the Basel III endgame is that U.S. banks thought the committee's intent was to bring the world up to its standards. Instead, they are set to see the biggest increase in new aggregate capital.Kevin Fromer, president and CEO of the Financial Services Forum, a trade group for the nation's largest banks, said the industry is not advocating a withdrawal from Basel, but he said compliance can be achieved without additional capital."Our view is the U.S. is not facing any capital inadequacy in terms of our banking system," Fromer said. "There are ways to implement the Basel III endgame here in the United States that don't raise capital of any significance for the institutions that would be impacted, which right now are going to be predominantly the GSIBs, our members. We firmly believe it can be implemented, have fidelity to the standard and not raise additional capital for the institutions here."However the issues facing the Basel III endgame are resolved in the U.S. and abroad, some see the current episode as a pivotal moment for global regulatory policy.Sean Vanatta, a financial regulation historian, said the overarching trend in economic policymaking has been to favor individual national interests over shared global goals. In last month's letter, Vanatta sees that shift spreading to regulatory policies, too, and undermining the notions of cooperation that have underpinned the Basel Committee and other international organizations for decades."The question, going forward, is whether nationalist financial-regulatory policies will be pursued constructively or cynically, here in the U.S., in Europe, and in other important markets," he said. "Whatever happens, I think the Basel Committee is losing credibility in the way that the neoliberal internationalist project is losing credibility. For better and worse, liberal internationalism is on the wane."

Mortgage rates have seen some declines recently but other rising costs of housing keep outweighing their impact, according to a new report by Intercontinental Exchange.The company's earlier First Look report found rates fell enough to incentivize significant refinancing in August, but later analysis done in the subsequent Mortgage Monitor report found it didn't do much to improve overall affordability. The average mortgage payment for all outstanding borrowers was $2,070 during the month."That's the highest or the largest share of median household income that's required to make that average mortgage payment since 2015," Andy Walden, vice president for research and analysis at ICE Mortgage, said during a webcast discussion of the numbers.A combination of higher home prices, corresponding increases in loan sizes, taxes, insurance and other factors have contributed to this."Increased property insurance costs stand out; the average monthly insurance payment is up 52% since the start of 2020, with increases in some higher-risk areas as high as 90% over that same period," ICE Mortgage researchers wrote in the report.Rising home prices contributed to a rise in the average price of premiums from $4.65 per $1,000 of coverage between 2013 and 2022 to $5.38, but they don't account fully for that surge in insurance costs, the researchers said."In higher-risk areas such as New Orleans, the share of the mortgage payment earmarked for insurance can be as high as 25%," they noted.Even in inland areas like Oklahoma City, Wichita and Tulsa considered less exposed to traditional flood concerns, the share of the mortgage payment devoted to insurance has risen to around 15%.Increasingly, recent disasters like Hurricane Helene suggest that flood risk is becoming less predictable, leading to more uninsured losses, said Travis Hodge, a managing director at digital insurance brokerage Viu by Hub, in an interview."A lot of these people didn't live in the flood plain," he said, referring to those impacted by that storm who weren't in areas considered high risk and therefore hadn't been subject to associated insurance requirements."They're finding out the hard way that flood is not covered," Hodge added, referring to traditional homeowner policies which typically exclude this risk.The storm's impact is adding to insurer withdrawals from the region, said Helge Jørgensen, co-founder and CEO of 7analytics, a firm based in Norway that utilizes artificial intelligence and machine learning to predict floods and landslides."Insurance companies are pulling out of the area because they don't have the ability to identify the different buildings at risk, that, of course, is a big, big problem; because if you are insuring buildings, and they're hitting over and over again, it's really costly," he said in an interview.Stress from disasters and related complications for insurance has elevated foreclosures in certain areas to more normalized levels, even though on average distressed loan risk has remained historically low, the ICE Mortgage researchers said."New Orleans is one of the areas that's back to prepandemic levels of portfolio activity," Walden said, citing one example.The larger Louisiana/Mississippi area has some of the highest delinquency rates in the country, in addition to one of the softest home price environments, he noted."I would be pretty confident in saying that the insurance component and the pressures that insurance is putting on homeowners down there is impacting that market," Walden said. "It's causing folks to be willing to list their homes for sale, that's adding inventory and softening prices."While insurance is the main concern in some areas, property taxes are a predominant contributor to costs in other places like Rochester and Syracuse, New York."While those two markets have the highest overall share going to taxes and insurance, the insurance share is just 6 to 7%," Gunnar Blix, director of housing market research at ICE Mortgage, said in webcast commentary on the research.Property taxes account for 35% of the average monthly payment in Rochester and Syracuse, according to ICE Mortgage.The Northeast in general is seeing some pronounced growth in taxation rates due to rising home prices and there is speculation that it may be correlated with some higher levels of distressed mortgage activity in certain regions."One of the other areas of the country where you're seeing foreclosure activity get back to normal is up in Albany and this kind of Western New York area as well," Walden said. "Whether that's specifically due to property taxes alone, I can't say specifically, but you are seeing a connection there in some of those areas to delinquency and foreclosure activity."

Rate-and-term refinance mortgage locks grew over 600% annually in September, but a much smaller increase in purchase loan activity is even more noteworthy, Optimal Blue said.Overall lock volumes were up 6% from August and 36.5% from a year ago, according to its latest Market Advantage report."Refinance production has been trending higher for a few months now as mortgage rates rallied, but purchase activity had been stubbornly stagnant," said Brennan O'Connell, director of data solutions at Optimal Blue, in a press release. "However, September volumes indicate the tide may be turning."That is because last month was the first since the Federal Reserve began raising short-term rates that purchase locks increased on a year-over-year basis other than April, which was affected by the timing of the Easter holiday, O'Connell said."As we move into Q4, this is a very encouraging sign that the market may have found a floor and production is on the upswing," O'Connell continued.However, other indicators, including Fannie Mae's Home Purchase Sentiment Index, are showing consumers remain leery about buying a house right now.The Market Volume Index, which Optimal Blue measures rate lock activity by, was 105 in September, versus 99 for August and 77 from the same month in 2023.It was the best month for lock activity since May.Purchase locks were up 6.1% compared with last September, but down by 3.3% from August.Meanwhile, rate-and-term refinance locks rose 644.2% annually and 49.4% compared with the previous month. The cash-out variety grew 54.7% and 6.4% respectively.Refinancings made up 32% of the market in September, up from 26% in August. However, the immediate aftermath of the Fed's 50 basis point short-term rate cut has had limited impact on mortgage rates, likely keeping a fair number of recent mortgage borrowers from returning to the market just yet.The good news is that signs of an inventory increase have sprouted. Total inventory was up 30.5% in September compared with 2023, as net new listings were up by 6.3%, while the number of properties under contract were down by 1.3%, HouseCanary said.This is a sign that the market is gradually returning to a more balanced state, HouseCanary CEO Jeremy Sicklick said in the company's report.Normally, the fourth quarter is typically weaker than the second and third quarters for mortgage activity, especially purchases."While we continue to see the hallmarks of a seller's market, particularly in higher price tiers, the consistent increase in inventory and contract volumes suggests that the market is beginning to stabilize after years of volatility," Sicklick explained. "If these trends persist, we may see an even more pronounced shift as we move further into the fall season."By product type, conforming loans made up 54.4% of volume, Optimal Blue said. Nonconforming was at 12.6%. Federal Housing Administration-insured mortgages had an 18.7% share, while Veterans Affairs-guaranteed loans made up 13.7% of September's market.The remaining 0.6% consisted of U.S. Department of Agriculture mortgages.

Real estate data services provider Corelogic released a new artificial intelligence-backed platform, the latest in a string of AI-related upgrades and offerings announced by home finance businesses over the past month. The AI tool aims to serve as a one-stop platform that contains information about nearly 100% of U.S. properties, Corelogic claimed. Dubbed Araya, the company expects it to tap into the information and solutions available to housing stakeholders across its various lines of business. The tool should serve as many as 5 million professionals across the housing industry spectrum, including real estate developers, agents, lenders, underwriters, servicers and regulators, through AI analytics processing. "We understand the need for trusted, top-tier data, AI technology and industry-leading solutions that keep pace with a dynamic real estate landscape," said Devi Mateti, president, enterprise digital solutions at CoreLogic, in a press release.Data included in Araya comes from Corelogic's property and market intelligence platforms, as well as precision marketing and climate risk analysis tools. Users can employ Araya to assist with both immediate day-to-day needs and longer-term planning, with the AI technology incorporating historical data alongside predictive models, the company said.  "Corelogic's investment in Araya reflects its vision to make an impact, delivering the critical property, portfolio and market insights that empower professionals," Mateti added. Corelogic's latest rollout comes following the launch of an AI image search capability within its Onehome real estate agent portal this summer. The tool helps home buyers find properties matching their preferences through pictures they upload. More than a year after artificial intelligence initially started making headlines in mortgage, Araya arrives as the latest in a series of AI product developments from some of the industry's leading heavyweights in the past several weeks.Last month, United Wholesale Mortgage launched an AI-notification solution to assist mortgage brokers and borrowers about potential refinance options. In late September, the Pontiac, Michigan-based lender also upgraded its broker-facing chatbot. Meanwhile, crosstown rival Rocket Mortgage has made several artificial intelligence investments in the past 12 months, including the addition of new technology veterans to leadership, after CEO Varun Krishna joined the firm in summer 2023. This week, the Detroit lender announced the hiring of another expert from the fintech world, tapping former Venmo and Paypal executive Papanii Okai for a newly created product engineering role.Figure Technology, which this year accelerated its growth within the home lending segment, also introduced new AI capabilities in early October to assist in the loan underwriting process.Coming alongside the recent rise of AI is heightened scrutiny from public officials about potential dangers of the technology. In separate instances over the past month, leaders ranging from Federal Reserve governors to U.S. senators all called for action to be made on regulation. Consumer advocates and technology startups also highlighted the need for appropriate AI guidelines.  

Ever since the Fed announced their 50-basis point cut, mortgage rates have been climbing higher.In fact, they’re basically 50 bps higher since the Fed cut their own federal funds rate (FFR) 50 bps lower.While we know the Fed doesn’t control mortgage rates, it does seem unusual to see such a disconnect.But the first important thing to remember here is the Fed’s rate is a short-term one, and mortgage rate are long-term rates, aka the 30-year fixed.So it’s not really about the Fed. However, this is a good reminder that mortgage rate trends never move in a straight line.Mortgage Rates Seesawed on the Way UpIf you recall mortgage rates’ ascent from sub-3% to 8% (yes, 8%!), it wasn’t just a straight line up.Just take a look at my annotated chart from Mortgage News Daily for evidence of this, where I highlighted all the pullbacks.There were days, weeks, and even months when mortgage rates went down. For example, the 30-year fixed climbed from around 3% in January 2022 to roughly 6.25% that June.Then mortgage rates “rallied” a bit and fell to around 5% (quotes in the high-4% range) by that August.Did that mean the worst was behind us? Nope. It sure didn’t. Instead, mortgage rates resurged and climbed to a new cycle high above 7% by that October.Things were looking pretty bleak until another relief rally took place, sending the 30-year fixed back down to 5.99% by February 2023.At that point, things were beginning to look better. Maybe that was the worst of it. Wrong again!Mortgage rates did an about-face in March and made the spring home buying season a lot less pleasant for home buyers.Then rates got even worse, rising north of 8% by mid-October and making folks question whether double-digit rates were the next stop.It turned out that was the worst of it, despite all the head fakes and twists and turns along the way.But it took time to realize that it was finally behind us. And it took false peaks and short-lived valleys for us to get there.Mortgage Rates Are Falling Now and the Same Thing Is HappeningNow that mortgage rates appeared to have peaked this cycle (I say appear because there’s never ever any guarantee), we’ve been in a downtrend for about a year.Rates hit their cycle highs last October at around 8% before rallying lower as inflation concerns subsided and unemployment began to worsen.In short, the overheating economy seemed to run out of steam, and interest rates took solace from that.It took just two short months for the 30-year fixed to fall from that 8% peak to around 6.5% last December.And it appeared that the 2024 spring home buying season was going to be a pretty good one, at least with regard to rates.But guess what happened. Yes, you’re catching on now. Mortgage rates went up. Again! What gives?Well, similar to the way up, there was economic data released each month that led to bond selloffs, which increased their accompanying yields.The 10-year bond yield, which tracks mortgage rates really well, had fallen to around 3.75% in December, only to rise about one full percentage point by April.That pushed mortgage rates back up to around 7.50%, enough to ruin yet another peak home buying season.Then as if almost on cue, mortgage rates trickled down post-spring to just above 6% in September.At that time, you could actually get a rate that started with a “4” in certain situations. And rates in the low-to-mid 5s were also quite common.Good Economic News Ruined the Mortgage Rate PartyIn early September, it seemed like the worst truly was over, and just then an optimistic Fed chairman Powell and a jobs report beat surfaced.The 50-basis point Fed rate cut didn’t really have much of an impact, given it was baked in and telegraphed.But Powell made comments the same day, essentially proclaiming that the 50-bps cut was bullish because the economy was so in such good shape it could handle a larger cut without reigniting inflation.Then came the jobs report just over a week later, which was a big beat and enough to propel rates above 6.50%.If it feels like déjà vu, you’re not wrong, nor are you alone. However, you might take comfort in knowing this same exact thing happened on the way up.Mortgage rates did not move in a straight line up, and will not move in a straight line down. There will be bad days, weeks, and even months along the way.Despite this, the trend still feels decidedly lower over time. You just have to be patient and focus less on the day-to-day.Easier said than done if you’re a loan officer or mortgage broker, or a borrower who needs to lock or float your rate, I know.If you do have time to wait before buying a home (or refinancing), it might pay to sit back and wait for this trend to continue developing.After all, the fed funds rate is still expected to fall another 150 bps within a year. And chances are they wouldn’t keep cutting that much if the economy was still running hot.In summary, trends, whether it’s rising rates or falling rates, take time to develop. Zoom out. Before long, the chart might resemble a “head and shoulders” pattern that slopes down on the right-hand side. 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 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.Latest posts by Colin Robertson (see all)

Stronger than normal volatility in the repo rate at the end of the third quarter could have the Federal Reserve rethinking when it will terminate its quantitative tightening program.It is typical for some temporary fluctuation at the end of quarter as banks look to clean up their balance sheets. But at the end of the third quarter, they rose to levels not seen in several years."The Treasury repo rate increased to 5.22% from 4.86% while agency [mortgage-backed security] repo jumped to 5.45% from 4.89%," Bose George, an analyst at Keefe, Bruyette & Woods, said in an Oct. 7 report. "Intraday rates were even higher," although since then, they have normalized.The MBS supply is one of the influencers of how the 30-year fixed rate mortgage is priced. Between QT and the Fed's rapid increase in short-term rates, those increased the 30-year FRM by 1-to-1.5 percentage points, George Calhoun, director of the quantitative finance program and director of the Hanlon Financial Systems Center, at the Stevens Institute of Technology, said earlier this year. Calhoun also is managing director of corporate relations for the Center for Research and Financial Technologies at the institute.In his view, QT is a driver of the abnormally wide spreads between 10-year Treasurys and 30-year mortgages still impacting the market.Even with the return to a more normal situation, repo rates are still a source of concern for the Fed, KBW's George said, because one of the impacts of QT is to drain liquidity from the market."While QT could end relatively soon as the Fed will likely reassess overall liquidity in the market, it is possible that volatility persists. This appears to be driven by the meaningful level of Treasury issuance as the Federal budget deficit hit $1.7 trillion in 2023 and is expected to hit $1.9 trillion in 2024 (based on the Federal budget forecast)," George said.The impact on the markets should remain limited, especially for real estate investment trusts that invest in agency MBS, like Annaly, AGNC, Two Harbors and Dynex, he continued, with the caveat that volatility holds to normal patterns."While REITs do fund non-agency assets in the repo market, those are generally bilateral repo markets, and pricing and availability in that market have always been based on the strength of the collateral," said George. "Those repo markets were not directly impacted by the quarter end volatility seen in the government repo markets."George was not the only market observer concerned with recent repo developments and how they could impact QT."The Fed has tools to inject liquidity into the repo market to help quell volatility, although we think it's somewhat counterintuitive to prop-up the repo market at the same time it conducts quantitative tightening, which could eventually motivate the Fed to reduce, or altogether end QT if repo volatility persists," wrote Eric Hagen, an analyst at BTIG, in an Oct. 1 report.In his Oct. 3 TMSpotlight newsletter, Les Parker commented that the increased volatility in the repo market created "the possibility that the Fed may consider further slowing QT to prevent a 2019-style disruption to money market functioning.

Expected property damage from Hurricane Helene has more than tripled nearly one week after the powerful storm battered parts of the Southeast.Helene is the deadliest hurricane to hit the mainland U.S. since Katrina in 2005, with at least 227 people confirmed dead, the Associated Press reports.Total insured wind and flood losses are predicted to be between $10.5 billion and $17.5 billion, according to CoreLogic's most recent report. Earlier estimates had placed the cost of insured damages between $3 billion and $5 billion.Overall, total flood and wind losses are estimated to range from $30.5 billion to $47.5 billion. A significant portion of these overall losses comes from uninsured flood damage, estimated to be between $20 billion and $30 billion. Standard homeowners' insurance typically does not cover flood damage, so homeowners often must purchase separate coverage through the National Flood Insurance Program or private insurers, meaning real-time estimates may be higher, CoreLogic said."When intense storm surge and flooding events, like Hurricane Helene, reach regions that are infrequently affected by natural hazards, we can expect to see damage to homes without flood insurance coverage," said Jon Schneyer, director of catastrophe response at CoreLogic, in a written statement. "The fact that so much damage was concentrated outside the Special Flood Hazard Areas (SFHAs) makes it challenging to realize the full extent of impact to uninsured homeowners."The NFIP offered by the Federal Emergency Management Agency is expected to provide up to $6.5 billion of insurance for the recovery efforts, Schneyer added.Insured flood losses from the NFIP and private insurance are estimated to be between $6 billion and $11 billion, while damage from wind is projected to range from $4.5 billion to $6.5 billion, CoreLogic's report stated.In response to the devastation, mortgage companies and others in the financial services industry stepped up to assist affected communities.Fairway Independent Mortgage announced a $1 million relief fund Sept. 30. This assistance is available to those who have received loans through Fairway as well as its own employees who have been negatively impacted by damages caused by Hurricane Helene, according to a press release.Meanwhile, Fannie Mae, Freddie Mac and the U.S. Department of Housing and Urban Development announced mortgage relief measures to assist homeowners in Florida, North Carolina and South Carolina. Late last week, HUD extended its aid program to affected borrowers in Georgia.Hurricane Helene's devastation on local communities is also prompting young adults to rethink their future home-buying plans. Nearly one-third of U.S. residents aged 18 to 34 say they are reconsidering where they want to live because of the storm, a report commissioned by Redfin found."Scores of Americans flocked to the Sun Belt during the pandemic because remote work allowed them to take advantage of the region's relatively low cost of living," said Daryl Fairweather, chief economist at Redfin, in a statement. "Some thought Appalachia was insulated from hurricane risk, not realizing that the area is prone to flooding and that hurricanes can sometimes cause flash flooding far away from the ocean.""Americans are beginning to realize that nowhere is truly immune to the impacts of climate change, and we're starting to see that impact where people want to live—even people who haven't experienced a catastrophic weather event firsthand," Redfin's chief economist added. 

Pent-up demand and declining rates offer glimpses of optimism among the home buying public, but persistent low inventory remains a thorn in the side of the housing market, according to new research. "The housing market is facing a significant shortage of homes, and this supply constraint is unlikely to be resolved soon," a quarterly report from Veros Real Estate Solutions said."Although inventory has steadily increased over the last year, it remains well below pre-pandemic levels. This is because many homeowners have mortgage rates below 4%, making it less likely for them to move."Although recent downward rate moves are bringing hopes for increased sales volumes, the surge in housing costs the last few years have left many markets out of reach for aspiring homeowners, with the national average price consistently posting record-high values. Meanwhile, the number of listings remains lower than historical norms.As a result of current supply-and-demand factors, home prices are not expected to deviate significantly from their current trajectory, Veros said. Still, some moderation in the rate of growth looks likely. The risk management firm expects modest price appreciation of 3.1% across the U.S. over the next 12 months. The anticipated increase narrowed from second-quarter predictions of 3.2%. The summertime decline in mortgage rates cracked open the window of opportunity some hopeful buyers have been waiting for, according to Veros. At the same time, any significant uptick in sales may not occur as quickly as hoped without more movement in home prices, initial data suggests. Last week, Realtor.com found early-summer buyer interest stalled in September, while Fannie Mae observed similar trends. "A growing share are now pointing to high home prices rather than high mortgage rates as the primary sticking point for affordability," said Mark Palim, Fannie Mae senior vice president and chief economist.Recently, researchers at the government-sponsored enterprise said existing-home sales would likely finish the year at its lowest mark since 1995."This signals to us that consumers are paying attention to the easing interest rate environment but still feel stymied by the considerable run-up in home prices over the last four years," Palim said in Fannie Mae's latest Home Purchase Sentiment Index. Only 19% of consumers surveyed in Fannie Mae's September sentiment research said the current market represented a good time to buy. While up from 17% month over month, the percentage still came in near all-time lows. Meanwhile, 39% said home prices are likely to increase over the next year, up from 37% in August. The interest-rate component looked far more favorable among consumers, with the share of respondents expecting further decreases in the upcoming year moving up to a record high of 42%. In September, Fannie Mae reported 39% expecting rates to fall.  Sentiment regarding interest rate developments drove much of the spike in the overall HPSI, which hit a reading of 73.9 in September, the highest in more than two years. The score rose from 72.1 a month earlier and surged from 64.5 a year ago. "But we've yet to see consumers' newfound rate optimism translate into a meaningful increase in home sales activity," Palim noted.Last month, the Federal Reserve cut its funds rate by 50 basis points, fueling hope in the housing market that Treasurys would fall and lead home lenders to make similar moves. A hotter-than-expected September jobs report dampened some enthusiasm, though, raising questions about the upcoming size and pace of the next Federal Reserve reductions. Last week, Freddie Mac researchers also hinted that the market might have jumped the gun initially following the Fed's September decision.In its report, Veros found high costs and insurance charges in the Sunbelt, whose housing markets boomed during the pandemic, are now deterring buyers away from many of those areas. On the other hand, home buyers more frequently are looking for affordable opportunities in the Northeast and Midwest. The top ten markets for price growth are all located in those regions, with values expected to rise between 5.9% and 7.6%. Rochester, New York, topped Veros' list, followed by Rockford, Illinois, and Reading, Pennsylvania.

Recently, Zillow began airing a commercial called “Homeowner Mates.” It depicts three women moving into a home together.It shows their individual “BuyAbility” followed by “Your BuyAbility,” the latter of which combines the purchasing power of all three.The three women have individual buying power of $117,000, $124,000, and $131,000, but a combined $372,000 when pooled together.This apparently allows them to go in on that near-$400,000 home purchase, despite not being anywhere close on their own.While having co-borrowers does indeed boost your purchasing power, the question is it a good idea when it’s a friend (or two)?It’s Hard Enough to Buy a Home on Your OwnWhen I first saw this commercial, I was pretty taken aback. It felt somewhat irresponsible, and a lot related to the current housing market being unaffordable for most.For me, that doesn’t mean forcing your way into a purchase. It might mean holding off on your homeownership goal, saving up more money, perhaps hoping for a raise, and generally getting all your ducks in a row.Oh, and maybe lowering your maximum purchase price to something you can actually afford!Instead, Zillow presents a solution to just find a couple close friends and buy the house today.It pretty much ignores what happens after the dust settles and the moving boxes are unpacked.It doesn’t get into what happens when one of the roommates wants to move out. It also seemingly glosses over who gets what room, or what happens if one of the co-owners loses their job.Simply put, it presents a very simplistic view of homeownership, without giving us the whole picture, which could get pretty dark in a hurry.Ultimately, it’s hard enough to be a homeowner without having to discuss all the what ifs with two other people.It’s a big decision to buy vs. rent, and exponentially more complicated once you multiply that by three individuals.Homes Are Too Expensive for Many Americans Right NowMaking it all much worse is this commercial only exists because homeownership has fallen financially out of reach for many Americans.Clearly the people behind the ad got together and said what are the main pain points for prospective home buyers right now?And they likely all agreed that it’s too expensive for most to buy a home thanks to a combination of high home prices and elevated mortgage rates.But instead of recognizing this, they found a creative workaround to tackle the affordability piece, regardless of what the outcome might be.Ironically, the commercial says, “That’s when buying a home got real.” When the three women pooled their incomes together to make it work.Sadly, they probably don’t know how real is will become after living together and paying the mortgage for a year.It’s hard enough to rent with a friend without facing all sorts of pitfalls. To buy a home with a friend and do so successfully sounds like the feat of all feats.In other words, it probably won’t go well for most. And how do you even work out who gets what if someone wants to move out?This all sounds so complex, yet is juxtaposed by the three women eating pizza and joking about one of them breaking the other’s vase.My guess is that would be an afterthought once real problems reared their ugly head.Maybe It’s Just Not the Right Time to Buy a Home…As I wrote in my other piece, Marriage and Mortgage May Not Mix, it’s perfectly fine to rent initially, especially if your wedding date and the housing market conditions don’t exactly line up.The same is true here. There doesn’t need to be a rush to buy, nor do you need to force the issue if it doesn’t feel quite right. Or simply doesn’t pencil.While I am a huge advocate of homeownership and believe it brings with it a lot of positives, it’s not for everyone. Nor is it always the right time.I’d personally never buy real estate with friends, and probably not even with family when it came down to it.Take the time to really think it through if you’re considering this. What will it look like to own a home with your friend(s) a year from now, three years from now, or five? Will you sell at some point or rent it out?You’re going to need a serious plan if you expect to pull something like this off. Even those who purchased a home recently on their own are feeling the heat.Now imagine several people dealing with conflicting emotions at the same time. It’s not for the faint of heart. 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 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.Latest posts by Colin Robertson (see all)

Rocket Mortgage is adding new depth to its digital expertise with the appointment of Papanii Okai, a former Venmo Chief Technology Officer.Okai will fill a newly created position of executive vice president of product engineering at the company. In this role, he will work alongside Rocket's senior technology leaders to develop artificial intelligence-driven products "at an even greater velocity," according to the megalender.The technology executive has nearly two decades of experience in the fintech sector, having worked at JasperSoft, PayPal, and Venmo. He spent almost 11 years in leadership positions at Venmo, where he oversaw the technology and engineering teams responsible for building and scaling products.He also led the engineering teams at PayPal, holding a number of roles that included serving as platform engineer to the chief technology officer for branded checkout and vice president of engineering for PayPal Giving.Okai will be tasked with collaborating with engineers, product managers and design teams to build upon Rocket's AI-powered products that "drive innovation and efficiency at every stage of the homebuying process." "We've all experienced technology that drives real impact in the world through Papanii's work with Paypal and Venmo. Now, he will be using that skill to help revolutionize the homeownership journey," said Shawn Malhotra, chief technology officer of Rocket Companies, in a press release."After serving in roles from a hands-on-keyboard engineer all the way to a CTO at both startups and large international tech companies, Papanii's technical depth and track record for building high-performing and highly engaged teams makes him a valuable asset for us at Rocket," Malhotra added.The expansion of Rocket's leadership comes during a time in which the lender has amped up the goal of establishing itself as an artificial intelligence leader in housing and real estate. In the past year, the Detroit-based company named a CEO with a fintech background, Varun Krishna, and hired its first companywide chief technology officer, Shawn Malhotra. Additionally, the lender brought on board former Sagent CEO Dan Sogorka to join Rocket Pro TPO as general manager.Concurrently, it has ramped up its technology offerings for the retail and broker segments of its business.Six months prior, Rocket rolled out its own loan origination system, dubbed Rocket Logic, a platform that uses machine learning to pull important information from borrower documents during the underwriting process.Rocket will be building out its Rocket Logic platform throughout 2024 and has promised significant additional AI integrations to come. Further developments to its product will automate tasks for mortgage bankers, underwriters and partner brokers, the company said in April.Late last year Rocket announced it was testing an AI chat interface in the search engine used by its loan officers, brokers and underwriters to find answers to questions that arise during the loan origination process. Two months later, in January, Rocket Mortgage's TPO channel launched an AI tool that will help mortgage brokers update approval letters on the go.Artificial intelligence technology will support growth in both purchase and refinance, Rocket's CEO said in September. "It is going to transform our industry. I say this as a technologist, as an engineer, and as someone who has been deeply involved in this space for years," said Krishna. "We believe in this as a company, and we're focusing on accelerating our leadership in this transformation."