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At age 20, Christy Soukhamneut was "dropped in the deep end of the pool" and found herself a mortgage president and CEO in her first job out of college.Since those early days cutting her teeth as the leader of Marble Mortgage in Montgomery, Alabama, Soukhamneut has carved out a career that led her to several of the industry's top lending firms, including Countrywide Home Loans, Certainty Home Lending, Flagstar and Texas Capital. She has also served as a director on multiple company boards.In 2023, her experience in mortgage led her to the role of chief lending officer at University Federal Credit Union in Austin, Texas, or UFCU, where she now is responsible for a full array of transactions beyond mortgage, including auto, commercial and small-business loans.  Soukhamneut recently spoke with National Mortgage News on several topics, including her entry into home lending and how it paved a path toward leadership on the national stage, technology's place in the industry's future and women's growing roles in financial services. The interview has been edited for clarity and length.

Bond investors who were once convinced that the Federal Reserve would start cutting interest rates this week are painfully surrendering to a higher-for-longer reality and a murky path forward for the market.Treasury yields spiked in recent days and are on the cusp of setting new highs for the year as data continues to point to persistent inflation, which is causing traders to push back their timetable for U.S. monetary easing. Interest-rate swaps now reflect market expectations for fewer than three quarter-point rate cuts this year. That's less than the Fed's median projection in December and a shade of the six reductions that were priced in at the end of 2023. And the first move lower? Investors are no longer confident that it'll even happen in the first half of the year.The shift underscores mounting worries that U.S. central bankers led by Fed Chair Jerome Powell may signal an even shallower easing cycle at this week's two-day gathering, which begins on Tuesday. Already, economists at Nomura Holdings Inc. scaled back their estimate for Fed rate reductions this year to two cuts from three. And recent trading flows in options markets show investors are seeking protection against the risk of higher long-term yields and fewer rate cuts — even if their longer-term view is for rates to eventually come down."The Fed wants to ease but the data isn't allowing them," said Earl Davis, head of fixed income and money markets at BMO Global Asset Management. "They want to maintain optionality to ease in summer. But they will start to change, if the labor market is tight and inflation remains high."U.S. 10-year yields jumped 24 basis points last week, the most since October, to 4.31% — nearing their year-to-date high of 4.35%. Davis sees 10-year yields rising toward 4.5% a move that would eventually offer an entry point for him to buy bonds. The benchmark rose above 5% last year for the first time since 2007.Both two- and five-year U.S. yields surged more than 20 basis points, for their biggest rise since May. The selloff extended Treasuries' losses for the year to 1.84%.As recently as December, bond traders were all but certain the Fed would start to ease at this week's meeting. But after a raft of surprisingly strong data on growth and inflation, they see zero chance of action this week, slim odds of a move in May and only a 60% possibility of a cut in June. For the year, traders have penciled in expectations for a total reduction of 71 basis points, meaning a three full-quarter-point cut is no longer seen as guaranteed.For its part, Nomura now sees the Fed easing in July and December, instead of in June, September and December. "With little urgency to ease, we expect the Fed will wait to see whether inflation is slowing before beginning a rate-cut cycle," economists including Aichi Amemiya wrote in a note.The margin to shift the Fed's median rate projections on its so-called dot-plot is thin. It would take only two policymakers switching to two cuts this year from three for the central bank's median forecast to move higher."It's not going to take a lot" for the median dots to move higher, said Ed Al-Hussainy, a rates strategist at Columbia Threadneedle Investment. "What I am nervous about is the front end of the curve. It's super-sensitive to the near-term policy path."Even if 2024 median rate projections remain intact, the dots in 2025 and 2026 as well as the long-term "neutral" rate — the level seen as neither stoking growth or holding it back — may move higher, a scenario will prompt traders to price in less rate reductions, according to Tim Duy, chief US economist at SGH Macro Advisors LLC. "We don't think market participants need to wait for the Fed's permission" to price in less cuts, wrote Duy. If the two-cut scenario doesn't materialize this week, it may come by the June meeting, "or at least that market participants will price it as coming by June," he added. "The risks at this moment are decidedly asymmetric."Instead of sweating over two or three reductions, investors shouldn't lose the big picture that the Fed's next move is a cut, not a hike, said Baylor Lancaster-Samuel, chief investment officer at Amerant Investments Inc. That means it's time to buy bonds and take the interest-rate, or "duration" risk, in Wall Street parlance. "You can debate the timing, but in our opinion, the Fed is still likely to cut sometime this year," said Lancaster-Samuel. "In that environment, we think the level of rates does not have too much risk of ratcheting higher from here. So we believe the opportunity cost of not taking duration is higher than the risk of taking it." Options traders are less sanguine. On the heels of last week's stronger-than-expected data on producer prices, traders rushed to buy hawkish protection for this year and next in options linked to the Secured Overnight Financing Rate, a measure which closely tracks the central bank policy rate. "Higher inflation readings, coupled with outsize deficits, the potential for the Fed to remain on hold longer, lends itself to another move toward the 2023 yield highs," said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities.

Additional inventory is coming to the U.S. housing market, especially in the South, and an increasing number of sellers are lowering their asking prices. Listings of existing homes rose 12% in February compared with a year earlier, and one in five of them are seeing price cuts, according to Zillow Group Inc. Even though the supply remains tight and the few available houses typically get under contract in just 17 days, the rise in listings is a welcome sign for potential buyers. The gains are particularly strong in many Southern metros that saw housing values surge during the pandemic.With borrowing costs punishingly high, many homeowners who locked in low mortgage rates years ago have been reluctant to move. Some might now be getting ready to sell, even if it means taking a small cut from recent highs. Typical home values have risen 41% nationwide since before the pandemic, according to Zillow, meaning most sellers come ahead from when they bought the house."For many households with record-high equity, waiting out potentially lower rates later in the year may not be worth it," Skylar Olsen, chief economist at Zillow, said in a statement.

A cyberattack in December compromised the sensitive data of 83,108 customers of Nations Direct Mortgage, the lender disclosed March 14.The Henderson, Nevada-based wholesale company revealed few details of the hack to its customers in notices shared with the Office of the Maine Attorney General. The one-day incident on December 30, 2023 came amid a spate of data breaches at lenders at the end of last year. An attorney who filed the Maine notice didn't respond to a request for comment Friday, while the company shared the consumer update on its website. Nations Direct said it immediately contacted third party experts and notified law enforcement. A subsequent probe found that an unauthorized third party "potentially removed" information which may have included names, addresses, Social Security numbers and customers' unique loan numbers. The letter doesn't speak further about the culprit nor form of attack. The lender is offering free identity monitoring services provided by Kroll for 24 months. The offer includes a $1 million identity fraud loss reimbursement. The company said it has no knowledge of fraudulent use of its customers' information. Through last November, Nations Direct originated $1.4 billion in mortgage volume in 2023, according to data from S&P Global. The firm, which counts 221 associated members on LinkedIn, offers non-qualified mortgage products among conventional and government-sponsored home loans. The attack on Nations Direct follows incident disclosures by Fairway Independent Mortgage Corp., Loandepot and Planet Home Lending for hacks occurring between last November and December. While Fairway didn't reveal the extent of its hack, Planet Home Lending said nearly 200,000 clients were affected, while Loandepot said nearly 17 million of its customers were involved in its incident. Those firms, like many others following an incident disclosure, are also facing class action complaints from affected customers who claim the companies failed to protect their data. Such lawsuits can take years to resolve; lawsuits over major breaches at Bayview Asset Management and Flagstar Bank in 2021 are still ongoing. 

Field services company MCS LLC has acquired Five Brothers Asset Management Solutions, adding to its operations reverse mortgage capabilities that are in demand.Financial terms of the transaction were not disclosed, but MCS did reveal some details of what the acquisition will mean for the two national companies' operations.Fiveonline, a proprietary system that includes some capabilities built specifically for reverse mortgages, will be integrated with the acquirer's systems; and the combined entity plans to use the best of both platforms going forward, said Craig Torrance, the chief executive officer of MCS.Torrance also explained the broader market drivers of the acquisition.The transaction helps the two companies pool resources following a period when low foreclosure rates and high inflation that adjustments to reimbursements from government agencies haven't kept up with all have contributed to consolidation in the space, he said."In these lower-volume times, it makes sense to come together. The more volume you can put on the network, the more leverage you can get, and the more your vendors can get work," said Torrance.The acquisition is in line with other efforts to diversify at MCS, which changed its name from Mortgage Contracting Services to the acronym in 2021 in order to reflect the expansion into other services. Today, MCS refers to the company's tagline, "making communities shine."Its other acquisitions over time have included the purchase of Chain Store Maintenance in 2023, M&M Mortgage in 2019, and Carrington's property preservation unit in 2017.The company currently provides not only real-estate preservation, maintenance, inspections, and renovation services used by mortgage servicers engaging in workouts or REO sales, but also similar tasks done for residential and commercial property managers and owners.While field services in general have struggled, Torrance said consolidation and diversification are starting to pay off for MCS. Some estimates of private-company size suggest it's the top player in the space, and Torrance reckons Five Brothers is in the top five."The business has doubled in size in less than two years and we're seeing a lot of rapid growth even in the first couple of months of this year," Torrance said, referring to MCS.Some of the growth has come from a slow resumption of some distressed mortgage work as pandemic-era restrictions have been rolled back, but work with performing income-producing properties has contributed too."Foreclosures are trending upward, but we've seen massive growth in our commercial and single-family rental segments," said Torrance. "Most of the growth is underpinned by these new segments we've entered."Combining some commercial and residential property work has helped fill in areas where there might otherwise be a shortage in resources, Torrance said, noting that there are some exceptions in technical areas like commercial HVAC repair that require specific licensing. "You can put vendors together and do some basic maintenance work, it's very transferable between these different property types," Torrance said.MCS attributes its ability to expand to investors who helped the company recapitalize in 2020. Both it and the family-owned Five Brothers are longtime players in the property preservation space. Five Brothers was founded in 1967 and MCS got started in 1986."We are bringing together two purpose-driven organizations with common goals and synergies that will continue delivering superior value to clients, while improving communities," said Nickalene Badalamenti-Kalas, president and CEO of Five Brothers, in a press release.

Government-sponsored enterprise Freddie Mac announced Friday the appointment of President Michael Hutchins to interim CEO.Hutchins will serve as both president and CEO, while the GSE continues its search for a permanent successor to Michael DeVito, whose final day at Freddie Mac was March 15. With the appointment, Hutchins also joins Freddie Mac's board of directors. Hutchins began his tenure with Freddie Mac in 2013 as senior vice president of investments and capital markets. Following subsequent promotions, Hutchins was tapped to serve as president in 2020, responsible for several divisions across the organization, including single-family, multifamily and investments and capital markets.  "Mike Hutchins is a proven leader who brings a deep understanding of every aspect of Freddie Mac to the role of Interim CEO," said Lance Drummond, non-executive chair of Freddie Mac's board of directors, in a press release. "In addition to his knowledge of Freddie Mac, Mike's decades of experience in housing and financial services is invaluable as the company navigates a challenging market," Drummond added.Before coming to Freddie Mac, Hutchins co-founded and headed investment bank Princeridge. Earlier in his career, he held roles at UBS, including as its global head of fixed income, rates and currencies, and Salomon Brothers.Recent changes in the upper ranks of both Freddie Mac and Fannie Mae point to a wave of transitions at both GSEs, with the departures of several longtime executives, as the nation attempts to address ongoing supply and affordability challenges. Late last year, Fannie Mae's president also announced his exit, expected in the first half of 2024. Fannie Mae's CEO Priscilla Almodovar first stepped into the top role in late 2022.Devito headed Freddie Mac for just under three years and announced in September 2023 he planned to leave before the end of the first quarter this year. Under his leadership, the company grew net worth, but questions surrounding the exit of both GSEs from conservatorship remained unanswered. Net worth grew to $47.7 billion at the close of 2023 compared to $37 billion a year earlier. In the fourth quarter, Freddie Mac posted a $2.9 billion profit. "I also want to thank outgoing CEO Michael DeVito for his commitment to Freddie Mac's mission, and we wish him well in his next chapter," Drummond said.In addition to elevating Hutchins, Freddie Mac also recently welcomed another new face to its board of directors with the appointment of Ford Foundation executive Roy Swan. In January, previous member Alberto Musalem stepped down after being named president of the Federal Reserve Bank of St. Louis.  

The National Association of Realtors will change some of its commissions rules after agreeing Friday to pay $418 million to settle home sellers' litigation claims.The association said it will prohibit offers of compensation to be made on Multiple Listing Services and mandate written agreements between Realtors and clients. Commissions can still be offered outside MLSes. The rules will go into effect in July, while the settlement absolving NAR of various home seller lawsuits is subject to court approval. The agreement won't affect commissions payments themselves, attorneys on behalf of NAR emphasized Friday."The expectation that people have that there's going to be a significant impact on commissions is not our expectation," said a lawyer Friday morning on behalf of NAR. "Our expectation is that commissions are set based upon local market conditions and the discussions between brokers and their clients, and that will continue with or without the settlement."As details of the settlement were unfolding Friday, mortgage industry trade groups said they were monitoring the news. The Mortgage Bankers Association said it would watch for commission updates, while the Community Home Lenders Association said Friday's announcement was consistent with its previous calls to regulators. Marty Green, a principal at Polunsky Beitel Green and veteran industry attorney, said the industry will be in transition for several months as market players digest multiple upcoming settlements. "This uncertainty impacts not just the real estate community, but also consumers, as mortgage underwriting guidelines have looked at real estate commissions based on how they have historically been paid," he said in a statement Friday. The organization's over 1 million members already offer various agent compensation structures such as flat fees, its attorneys said. Counsel also disputed earlier media reports suggesting commission fees would be reduced. They noted commissions in the Kansas City area, the focus of last year's trial, varied and weren't always the traditional 6% of a home sales price. NAR chose to settle to end uncertainty and liability risks among its members, mired in numerous lawsuits similar to the Sitzer/Burnett case. The association mulled filing for Chapter 11 bankruptcy protection, as it couldn't have afforded a bond payment it would have to make during an appeal of the Sitzer/Burnett case. A successful appeal would have also only prompted a new trial, prolonging the uncertainty for Realtors, attorneys said. The announcement leaves HomeServices of America as the sole remaining defendant who has yet to settle claims from last October's $1.78 billion verdict against real estate players in a Kansas City case. HomeServices parent Berkshire Hathaway Energy, which was added to pending commissions litigation earlier this month, was not involved in Friday's announcement.The settlement also covers NAR member-owned brokerages that had transactional volume of $2 billion or below in 2022, and independent contractors who are NAR members at other brokerages. For brokerages with more than $2 billion in transactions, NAR said they can opt for payment under a formula, an amount under mediation or continue to fight any claims. MLSes not wholly owned by a local Realtor association aren't also automatically covered but can buy into settlement coverage under a separate Massachusetts case, in which an MLS is poised to finalize an agreement with consumers. Should Friday's settlement be approved, NAR will pay the $418 million to home seller plaintiffs over four years. The agreement, according to attorneys, contains around a dozen other rules changes that weren't published Friday; the court filing is expected in a few weeks, NAR said. NAR will also continue to battle separate lawsuits from home buyers, who are not a part of the class tied to Sitzer/Burnett.Friday's news also didn't mention the Department of Justice, which is attempting to reopen an investigation into NAR. Feds are awaiting a U.S. Circuit Court's decision, expected later this month, regarding its effort. The DOJ last month also criticized the proposed settlement between an MLS and consumers in Massachusetts, calling for the abolition of commissions altogether.

The bad times got worse in the fourth quarter as lenders reported the most money lost per loan originated since the Mortgage Bankers Association started keeping records.Independent mortgage bankers and bank mortgage subsidiaries lost $2,109 per loan produced in the period ended Dec. 31, driven by an increase in related expenses. It makes seven consecutive quarters where the industry as a whole lost money on the originations business.This compares with a loss of $1,015 for the third quarter and a loss of $2,812 for the fourth quarter of 2022.A "perfect storm" of a lack of inventory for sale held back purchases in what is typically the slowest quarter of the year anyhow, combined with rising interest rates that also held down refinance volume, kept origination activity at its lowest level since 2014, explained Marina Walsh, vice president of industry analysis, in a press release."While production revenues were relatively strong and even increased by five basis points, expenses were up more than $1,000 per loan from the previous quarter and the second-highest level ever reported in our series, indicating that lenders were unable to sufficiently adjust resources to align with fluctuating rates and volumes," Walsh said. "At the same time, productivity metrics deteriorated, suggesting that there may still be excess capacity even after substantial employee reductions over the past two years."Median productivity, loans closed per retail or consumer direct production employee, decreased to 1.1 loans in the fourth quarter, down from 1.3 loans for the period ended Sept. 30, 2023.With reports from earlier this week finding that the for-sale inventory is on the rise as existing homeowners start to list again, that is creating optimism for the spring home purchase season.But buyer costs also remain elevated, creating a potential drag on the market.A report from Boston Consulting Group, noted that gain on sale margins for a group of four banks and six nonbanks, all publicly traded, was down at nine of them versus the third quarter, the only exception being PNC; Rithm was down but by a scant basis point.On a year-over-year basis, Rithm was 57 basis points lower. Flagstar/New York Community was down 24 basis points and Citizens was down 20 basis points. Mr. Cooper and Guild Holdings reported lesser declines of 3 basis points and 1 basis point respectively.Expenses at the independent mortgage banker peer group (the BCG report looks at a total of eight), were down 20%-to-30% for the period, showing that at least at the large publicly traded companies, the cost cutting initiatives have paid off, BCG said.But the MBA found across the industry that, including production and servicing, just 29% of companies participating in its study had pretax net financial profits in the fourth quarter, down from 51% three months prior.As measured by basis points, because of lower volume pretax production losses actually improved compared with the prior year to an average of 73 basis points in the fourth quarter from a loss of 99 basis points. In the third quarter, the average loss was 34 basis points.When taking into account items including fee income, net secondary marketing income and warehouse spread, total production revenue increased to 334 basis points in the fourth quarter, up slightly from 329 basis points in the third quarter, although as measured by dollars, it was $50 per loan lower to an average of $10,376.Meanwhile, loan production expenses — including commissions, compensation, occupancy, equipment and more — averaged $12,485 per loan for the period, up from $11,441 for the prior quarter. This is well above the historical average of $7,389 per loan covering a period starting with the fourth quarter of 2008 to the last three months.Lenders also had a rough quarter when it came to gaining income from their servicing portfolio with net financial income (without annualizing) of a $24 per loan loss, down from profits of $90 per loan in the third quarter.Servicing operating income, which excludes amortization, gains/loss in the valuation of servicing rights net of hedging gains and losses, and gains and losses from bulk sales, was $108 per loan in the fourth quarter, up from $104 per loan in the third quarter."Despite tough market conditions, some companies have been able to weather seven consecutive quarters of net production losses through cash reserves or infusions and strong servicing cash flows," Walsh said.

If what's past is prologue, then the U.S. mortgage industry should be looking to the European Union to see what very well might be coming next in terms of AI regulation. In April, the European Parliament is expected to adopt The European AI Act: a new regulation that could very well become the framework the rest of the world will rely on as they develop their own AI regulations. Certainly, that was the case in 2018, when the EU adopted the Global Data Protection Regulation (GDPR), which has since become the model that several U.S. states have used to develop their privacy regulations. The European AI Act will apply broadly to any AI system developed or used in the EU. As is the case with GDPR, U.S. companies will come under this regulation if they do business in the EU. The new regulation generally categorizes AI risk into four broad levels: Unacceptable Risk - Completely prohibitedExamples: Social scoring by governments, systems that manipulate behaviorHigh Risk - Permitted subject to strict oversightExamples: HR Recruiting, Credit Scoring, UnderwritingLimited Risk - Permitted with specific transparency requirementsChatbots, AI generated contentMinimal Risk- No restrictionsSpam filtersThe most detailed framework is around high-risk AI systems, which covers use cases like underwriting and credit scoring, that would potentially be of high value to lenders. Specifically, the rules emphasize avoiding bias by ensuring the quality of the data sets used to train the algorithms; being able to trace and explain the reasons behind AI decisions; and finally assuring a high level of accuracy.AI users would also be required to demonstrate that that are providing clear and adequate information to consumers and that they are taking prudent steps to ensure privacy and security.Limited-risk systems include AI chatbots, which many lenders are exploring to provide timely, high-quality customer service. Requirements for limited-risk systems focus primarily on disclosure, ensuring that consumers are aware that they are interacting with AI and have the ability to opt out and communicate with a person. Lenders will want to ensure that they are following EU requirements if their chatbots are accessible within the EU.  Following the EU's lead?In the five years following the passage of GDPR, a number of U.S. states— including California, Vermont, Massachusetts and Colorado— have incorporated elements of those privacy standards into their regulations. Similarly, large U.S. companies with global footprints, including many in the financial services space, have developed their privacy practices to broadly comply with GDPR. Many observers expect this will be the case with AI as well.Currently, U.S. regulators, at both the federal and state levels, have been relying on existing laws, such as the Consumer Financial Protection Act with its UDAAP provisions, to regulate the use of AI in financial services. Often these regulators are focusing on the same concern addressed in the AI Act, but in a more piecemeal fashion.For example, at the local level, New York City's Automated Employment Decision Tool Law, requires an annual audit of AI tools to root out bias. It also requires disclosure to applicants that AI or machine learning will be used to evaluate them. Privacy and security protections are mandated by the law as well.Similarly, Colorado adopted the Algorithm and Predictive Model Governance Regulation in 2023 to ensure life insurers' use of AI models does not result in unfairly discriminatory insurance practices with respect to race.At the federal level, various agencies have already issued stern warnings that lenders using AI should take care not to violate consumer protection laws in the process. In April, the CFPB and its federal partners publicly pledged that the use of automated systems and advanced technology would not be accepted as an excuse for lawbreaking behavior or discriminatory outcomes that threaten consumers' financial stability.This past June, several federal regulators, including the CFPB, jointly proposed a rule to ensure home valuations that use AI technology are fair and nondiscriminatory. The proposed rule specifically focused on the risks posed by algorithmic appraisals, including the potential for computer models where bias is baked into the equation. Adding to its 2022 guidance on the use of complex algorithms in credit decisions, the CFPB published a circular in September 2023 on adverse action notices and credit denials when AI is used. Finally, this past Fall, the Biden Administration issued a wide-ranging Executive Order on Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.  In all, the order requires more than 100 specific actions from over 50 federal entities. Although broader in scope than the EU's AI Act, the executive order targeted the same core issue sets addressed in the proposed EU regulation: AI bias, consumer protection, privacy and security and permissible government use of AI. It also specifically pointed to international leadership on these issues. So, if the financial services industry is serious about preparing for new AI regulation, a careful reading of the new AI Act might just be the place to start.

The increase in the number of homes for sale during February is good news going into the spring home purchase season, and that helped to alleviate competitive pressures, Zillow found.Inventory rose 12% year-over-year. The total of over 900,000 homes on the market last month was the highest amount in any February since 2020. New listings rose 20% compared with January and were 21% higher than the same month in 2022.Zillow's surveys as of late have found an elevated number of current owners planning to sell in the next three years."We're finally beginning to see owners who have been putting off moves return to the market," said Skylar Olsen, chief economist at Zillow, in a press release. "For many households with record-high equity, waiting out potentially lower rates later in the year may not be worth it."But the time from listing to contract in February averaged 17 days, not as fast as it was during 2021 and 2022, but still quicker than prior to the pandemic.Homes that are not priced appropriately or lack "curb appeal" have driven average time on the market to 53 days, which Zillow said is longer than normal for that time of year.The share of listings where the seller reduced the price was 20.1%, which Zillow said was higher than usual.The Zillow Home Value Index calculated the typical home being worth $349,216, versus $344,159 in January. This amount is also almost 41% higher than it was prior to the pandemic. Compared to February 2023, the ZHVI was up 4.2% nationwide.A separate report from Redfin issued Thursday found the median monthly housing payment was $2,686 during the four weeks ending March 10. This was only $30 below the record set in October 2023. The combination of still-high mortgage rates and rising prices was responsible.Redfin's own data found new listings increased 13% during the period, the biggest annual increase in nearly three years. Plus, the total number of homes for sale was up 3%, the biggest increase in nine months.However, mortgage rates are likely to stay elevated for a while, especially after this week's Consumer Price Index report, which further solidifies the viewpoint that the Federal Open Market Committee is unlikely to cut short-term rates prior to June, Chen Zhao, Redfin economic research lead, said in a press release."Buyers who can afford to may want to get serious about their home search now, as housing costs are unlikely to fall anytime soon," Zhao said. "The uptick in listings should be another motivator for buyers: There's more to choose from, and improving inventory may bring out more competition from other buyers as we get further into spring."That is already starting to occur with the recent uptick in mortgage application activity, Zhao said.The Mortgage Bankers Association's Weekly Application Survey for the period ended March 8 reported the conforming 30-year fixed rate mortgage at an average of 6.84%, down 18 basis points from the prior week.The purchase index component of the application survey increased 4.7% on a seasonally adjusted basis compared with March 1, but was down 10.8% from the same period in 2023."The decline in rates led to a solid gain in mortgage applications for the second consecutive week," MBA President and CEO Bob Broeksmit said in a Thursday morning statement. "With the spring home buying season underway, lower mortgage rates and more new and existing housing supply should boost mortgage demand."First American Financial expects February existing home sales to rise 1.4% to a seasonally adjusted annualized rate of 4.05 million."The narrowing mortgage rate spread was the largest driver of the projected increase in our February existing home sales outlook," Mark Fleming, First American's chief economist, said in a statement. "Approximately 90% of homeowners are financially disincentivized from selling their home in today's housing market because it would cost more today to borrow the same amount of money they owe on their current mortgage."But the spread between the average rate for a 30-year FRM and the effective interest rate on mortgage debt outstanding in February "fueled a 1.3 percentage point increase in the projected monthly change in existing home sales," Fleming said.