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President Trump's housing regulators have touted their efforts to dismantle federal diversity, equity and inclusion initiatives in pursuit of reducing spending and waste.As a result, the conversation around mortgage lenders' efforts to serve communities identified by specific racial or cultural backgrounds have been further politicized, leaving these shops in the awkward position of determining the future of their own DEI efforts at the risk of alienating groups they aim to serve.Lenders promoted their DEI efforts in recent years but have responded to the new administration by toning down some of that language. That includes the Mortgage Bankers Association, which deleted several webpages related to DEI including its Diversity, Equity and Inclusion playbook. The trade group in a statement said it reviewed its policies and programs to comply with President Trump's executive orders related to DEI programs. "MBA remains committed to fulfilling our members' desire for information and resources they can utilize to develop their own strategic programs to ensure that they create a welcoming environment for their workforce and can serve their customers in communities across the nation," the trade group said in a statement. RELATED READING: HUD Secretary Turner: End to fair housing rule a state winCompanies are still touting their bona fides in reaching out to diverse mortgage consumers, but today are less outspoken about the diversity programs they appear to maintain within their walls. "We recognize with the current administration that there's a different approach to how D&I is viewed," said Tony Thompson, founder and CEO of the National Association of Minority Mortgage Bankers of America. The industry veteran, reflecting on the current political climate, said he recalls conversations he had with CEOs following the murder of George Floyd."It's not what you say that matters, but it's what you don't say that matters more," he said.Why the federal government rid housing agencies of DEI initiativesEarly into their tenures, the Trump-appointed heads of the government's housing regulators cut DEI programs. Some DEI-related vendor contracts have been removed under the guise of eliminating fraud, waste and abuse and regulators, such as Federal Housing Finance Agency Director Bill Pulte, described DEI initiatives as "nonsense." Fannie Mae and Freddie Mac are stronger than ever before, and they will continue to get stronger by the day. Consulting contracts that waste money and other DEI nonsense is being stripped away. Now, Fannie Mae and Freddie Mac can finally work on things that make housing more…— Pulte (@pulte) April 7, 2025 Scott Turner, secretary of the Department of Housing and Urban Development, said in an interview with Fox News that "DEI is dead at HUD." President Trump's cost-cutting task force claims to have terminated six DEI-related contracts at HUD worth a combined $7.3 million. Turner earlier this year also rejected a disaster relief grant for the hurricane-stricken Ashville, North Carolina over a supposed DEI stipulation. At the FHFA, Pulte has claimed canceling DEI and climate-related efforts at the government-sponsored enterprises saved them a combined $15.4 million. Russell Vought, acting director of the Consumer Financial Protection Bureau, suggested the regulator would punish employees engaging in such efforts.Lenders tone down DEI languageMuch like leading depositories, a few publicly traded lenders in annual financial reports have pulled back language about their DEI initiatives they included in previous years. Some lenders when reached by National Mortgage News to discuss their DEI initiatives shared statements emphasizing their commitment to lending to diverse communities, but did not use the DEI term. Regarding individual companies, Thompson said NAMMBA has seen numerous lending shops mull whether they need D&I or "community outreach" experts. "From that standpoint, some companies have certainly eliminated those roles within the mortgage industry," said Thompson. "Some companies have looked to reframe and reshape, and then some companies have decided to step back from initiating initiatives that in their minds would help appease the regulators."Some industry supporters stay the courseAmid some pullback, other industry stakeholders are doubling down on their commitments to diversity. United Wholesale Mortgage, the industry's top lender by volume, continues to promote DEI, including employment resource groups. The company maintained a description of its DEI activities in an annual report. Consumers Credit Union, based in Kalamazoo, Michigan, employed a DEI coordinator in 2022 and said its efforts are going to stick around. "We were doing this long before this was the thing to do, and we'll continue to do it long after any changes are made, no matter what the political landscape looks like," said Josh Summerfield, vice president of mortgage at Consumers Credit Union.Paul Gigliotti also believes DEI initiatives are here to stay. The chief growth officer at mortgage technology firm Prudent AI in 2021 founded Axis 360 Lift, a nonprofit that placed dozens of diverse individuals across industry tech and title companies. While he said he hadn't heard of a mortgage company ending their DEI support, he acknowledged the shock wave reverberating through corporate America. "I don't understand why an organization would discontinue a diverse campaign or strategy," he said. "That actually hurts me more as a diverse individual, because that means that that organization, from my perspective, was not fully into it."Moving forward with "social impact"Amid the pullback, lenders haven't wavered from their commitment to lend to minority borrowers, who are anticipated to make up an even larger portion of the homebuying pool moving forward. New American Funding, when asked about its DEI efforts, cited its pledge to fund $10 billion in mortgages to Latinos and $20 billion to Black homebuyers in the next few years, among its other diversity initiatives. Thompson at NAMMBA cited a "$2.9 trillion multicultural market" that he suggested many companies are failing to tap. "I think many companies in our industry are failing to realize the economic, human capital and social impact that they have an opportunity to seize in this current environment, by not understanding what D&I really is," he said. NAMMBA in the past few years has engaged with companies to become Accredited Social Impact Lenders, a distinction Thompson described as a JD Power recognition for social impact, which less than 5% of companies in the industry have been awarded. He added that NAMMBA has shifted focus from D&I to economic, employment and business opportunities."We're trying to help companies understand and approach this from an economics standpoint rather than simply run away," said Thompson. "If companies are looking to grow profitability and market share, they'll have to engage and embrace whatever they want to call it: D&I, social impact lending. If not, they will be going out of business."

Last week, during remarks to the MBA Secondary & Capital Markets event in New York City, FHFA Director Bill Pulte commented that he thought the estimates for the valuations for Fannie Mae and Freddie Mac were too low.  Pulte then made clear that releasing the GSEs from conservatorship "is a decision for the President of the United States."The next day, President Trump said on Truth Social: "I am giving very serious consideration to bringing Fannie Mae and Freddie Mac public," declaring that he would make a decision "in the near future." The good news of sorts is that the GSEs will indeed exit conservatorship because the Trump Administration needs the cash value to support the President's ambitious tax cutting agenda. The bad news is that as and when the GSEs are released in a couple of years, the US will own more than 98% of the equity on a fully diluted basis. READ MORE: Trump mulling exit nudges GSE stocks higher, MBS widerReleasing the GSEs from conservatorship implies crushing dilution of the private investors and also the Treasury's own preferred position by the accumulating liquidity preference caused by the accumulation of capital by the GSEs. Prior to release, the Treasury should end the accumulation of private capital by the GSEs.Retaining private capital does nothing to support the credit standing of the GSEs, but it does make release more expensive. Will President Trump force Treasury Secretary Scott Bessent to take a loss of several hundred billion dollars by waiving the mounting liquidity preference? Not likely. The United States will essentially own all of the voting shares of the GSEs upon release. What then? The challenge for Secretary Bessent is how to turn this asset into cash that can be used to offset the cost of tax cuts. In order to generate several hundred billion in cash quickly, the Trump Administration will be forced to restructure the GSEs to unlock value in the shortest period of time. Otherwise the Treasury risks taking a loss on the sale of common equity shares.READ MORE: FHFA's Pulte defers to a higher authority on conservatorshipThe best path for restructuring the GSEs is for the Treasury to convert its option into common shares, then further issue new common shares to repay the liquidation preference as required by the same federal law that applied to the Treasury stake in GM, AIG and Citigroup. But unlike these private companies, the GSEs will never be truly free of control by the Treasury, thus a new strategy is needed for monetizing these assets. When President Lyndon Johnson sold common shares of Fannie Mae to the public in 1968, this was an act of fraud. Doing it again in say 2027 will also be a fraud. Why? Because the US retains "dominion" over the GSEs, to paraphrase U.S. Supreme Court Justice Louis Brandeis a century ago. Pretending to sell an asset while retaining control over the property, wrote Brandeis, "imputes fraud conclusively."The Trump Administration needs to monetize the GSEs quickly, but the United States must remain in control to avoid destabilizing the housing sector. Fortunately the Trump Administration can avoid this conflict while also doing right by the private shareholders and without new legislation. The answer is for the US to remain the majority voting shareholder of Fannie Mae and Freddie Mac, while financing the repayment to Treasury (and the capital needs of the GSEs) privately via a new class of non-voting senior preferred securities. How does embracing an explicit public/private model help President Trump and Treasury Secretary Bessent make GSE release a reality?First, by having a frank discussion about the credit needs of the GSEs and the housing market, we can make the process credible and eliminate the unseemly spectacle of hedge funds manipulating GSE common shares with impunity. The goal here is to make the release so credible that the Congress will find it difficult to meddle with the GSEs after release.Second and more important, restructuring the capital of the GSEs will make the release process more credible with the markets, particularly with financial institutions and global investors, and raise a lot of money for the Treasury without the risk of a loss. Trying to sell $500 billion in common shares to the public makes no sense in a market where investors want safe yield. Prior to release, the GSEs should start to repurchase and extinguish common shares from the Treasury and finance this process with cash profits and issuance of new nonvoting senior preferred shares to private investors. The GSEs should also repurchase common and preferred shares in the open market, offering private investors the opportunity to sell for cash or in exchange for new senior nonvoting preferred on an attractive basis. Eventually, most of the GSEs capital structure will be senior preferred and debt held privately, while the Treasury could hold less than $100 billion in common voting shares, essentially a "golden share." And with continued control by the US, the capital needs of the GSEs will be reduced accordingly, increasing resources to better support housing. Remember, private capital does not matter to the GSEs.READ MORE: 'Don't fix what's not broken': experts mull cons of GSE exitHaving the United States as the sole common voting shareholder is credible because ultimately the Treasury retains dominion over Fannie Mae and Freddie Mac. By keeping the US as the sole shareholder of the GSEs, we preserve the 30-year mortgage, interest rate locks for consumers and to-be-announced (TBA) eligibility for conventional loans. Most importantly, keeping the US as sole owner of the GSEs avoids any need by Moody's and other rating agencies to change the credit ratings of the GSEs. By restructuring the GSEs into public utilities, we can end decades of free-riding by private investors on the public credit. Retiring all publicly held GSE common shares and selling new senior preferred shares to the public provides a practical way to raise hundreds of billions of dollars for the Treasury in a short period of time.  Ending private ownership of GSE common shares also allows the Trump Administration to make clear that the days of private investors profiting at public expense are over. And by restructuring the balance sheets of the GSEs, we can give President Trump and Congress the cash needed to preserve the tax cuts – without Treasury risking a large financial loss.  Ed Pinto of American Enterprise Institute and Alex Pollock of the Mises Institute wrote in "Not Another Free Lunch" for Law & Liberty:"The conventional narrative is that an exit from conservatorship would be a 'privatization' and Fannie and Freddie would again become "private" companies. It is not the case. To be a GSE means that you have private shareholders, but you also have a free government guarantee of your obligations. As long as Fannie and Freddie have that free government guarantee, they will not be private companies, even if private shareholders own them."

Publicly traded lender Guild Mortgage's parent company, Bayview Asset Management, and a servicing-related affiliate are in talks about a potential deal.Bayview said in a filing that in conjunction with the affiliate it is "engaging in friendly preliminary discussions" with Guild "regarding a broader commercial relationship and potential corporate transaction. One possible outcome is "the acquisition of all the common stock."The proposed transaction could be part of a broader trend toward increased convergence between lenders and servicers epitomized by Rocket Mortgage's plans to buy servicing giant Mr. Cooper. But while Mr. Cooper and Rocket have formally signed an acquisition agreement, Bayview, its servicing affiliate and Guild Holdings said there is no guarantee they will reach a deal.Other potential transactions Bayview and Guild said they have discussed include "asset purchases or other business combinations." The two also said "a significant minority investment" is possible.Bayview currently holds a 7.3% stake in Guild's class A common stock. It has less than 1% of the total voting power of Guild's outstanding common shares.Guild said in a statement confirming core details of the securities filing by Bayview and its MSR Opportunity Master Fund that it "will not comment on speculation regarding any potential transaction or its terms."Given the current composition of the market and rate conditions, some lenders perceive servicing as essential to retaining customers and generating new loans, which may be driving some of the deals between companies with servicing affiliates and lenders.But while some lenders perceive mortgage servicing rights as valuable to retain in a market where many outstanding borrowers got low-rate mortgages during the pandemic housing boom and are reluctant to abandon them for new ones, others have reasons to sell MSRs.Some mortgage-related companies operating in the current market have been selling MSRs to raise cash. Others also have been selling servicing recently because they perceive the direction of rates and credit quality, which hold risks as well as opportunities for servicers, as uncertain.

Adobe Stock Rising bond yields are putting fresh pain on some banks' bond portfolios, but that doesn't mean acquisitions of those lenders are off the table.One recent M&A deal shows even the most upside-down of banks can make the math work, observers say. Few banks had left themselves as exposed to rising interest rates as Industry Bancshares, which runs six small Texas banks. But Industry's new leaders have found an exit, even if its acquirer-to-be is paying relatively little.Unrealized losses — which got widespread scrutiny after Silicon Valley Bank's failure in March 2023 — are not yet a problem of the past. At banks that kept their exposure to interest-rate swings relatively short, time is healing those wounds.But even at banks facing longer-term pain, unrealized losses are a known issue that dealmakers can easily price, though that price is not as high as potential sellers once hoped."Every day it gets better, but it is still an issue, unequivocally," said Bill Burgess, co-head of financial services investment banking at Piper Sandler, adding that banks' bond portfolios are far easier to value than a "$250 million condo loan in Miami in 2009 — that could be worth zero." The discounts nonetheless remain painful for over-exposed banks. For those depositories that plowed money into the bond market in 2020 and 2021, a subsequent series of aggressive rate hikes by the Federal Reserve, which was battling inflation, took a toll. Bonds lose their value when rates rise, since newer bonds pay more interest.Some bankers had hoped that rates would have fallen by now, fixing the problem and wiping out their unrealized losses. But "they haven't seen the recovery that they thought they were going to," said Kirk Hovde, head of investment banking at Hovde Group.Instead, unrealized losses on banks' bond portfolios grew last quarter to $482.4 billion, up by $118.4 billion from a quarter earlier but below their peak in 2022, according to the Federal Deposit Insurance Corp.The losses could "increase banks' vulnerability if other developments, such as a large surge in commercial real estate loan losses, make depositors question a bank's viability," two researchers at the Treasury Department's Office of Financial Research wrote in a blog post this month.Rates on a roller coasterThe recent rise in bond yields has renewed some of the pressure. The yield on the benchmark 10-year U.S. Treasury security fell to as low as 3.63% in mid-September, but then traders started pricing in the possibility that President Donald Trump's election victory and a potential economic boom would drive up inflation.The optimism pushed up yields to nearly 4.8% just before Trump's inauguration, but then they settled back down.Yields spiked again in the aftermath of Trump's April 2 tariff announcement — then came back down again as he paused many of the levies. This week, yields rose sharply again, partly over worries about rising U.S. fiscal deficits.Some experts say the recent volatility underlines lingering risks for the banking industry."It's not a sector-wide problem … but there are institutions where it's still a meaningful overhang," said Jill Cetina, a Texas A&M University professor who was previously a bank supervisor at the Federal Reserve and a top bank analyst at the ratings agency Moody's.The overhang gives banks less room to absorb loan losses if a recession hits and their borrowers start facing defaults, Cetina said.With rates still stubbornly high, some previously hesitant bankers are starting to consider whether it's finally time to sell their institutions."You are starting to see some thawing of people's views, saying, 'Maybe we should start thinking about this,'" Hovde said.And as more time passes, more bankers may accept they can't fetch the prices they would have been able to get before."It slowly feeds in, even to [privately held banks]: 'OK, we're really worth less money now,'" said Robert Klinger, a lawyer at Nelson Mullins who advises community banks on mergers. "It's arguably less of a shock."Between January and April, banks announced some 44 M&A deals totaling $4.5 billion in value, according to S&P Global Market Intelligence, as they sensed a more favorable regulatory environment under Trump. But it hasn't been the "gangbuster year" that some expected, Hovde said.End of an eraIndustry Bancshares' pending acquisition by Mississippi-based Cadence Bank would close a tough chapter for a bank that dates back to 1911.The Texas company's lopsided bond portfolio landed it in the pages of The Wall Street Journal, prompted regulatory penalties and put it atop a series of analyses gauging the extent of banks' unrealized losses.Industry has $4.4 billion of assets, most of it in high-quality bonds issued by Texas municipal issuers. The problem isn't that the issuers aren't expected to repay the bonds, 98% of which are deemed investment-grade, according to an investor presentation on the merger.Rather, it's that Industry bought its bonds when the interest they paid was very little. The yield paid on the company's bond portfolio was just 2.6% at the end of the first quarter — far less than the more than 4.5% investors can fetch on a 10-year Treasury today. Without a buyer, the bank would be stuck getting paid very little for a very long time. The weighted average maturity of its portfolio is 18 years."They got smoked — they got way beyond smoked," said Jeff Davis, a former bank analyst who's now managing director of the advisory firm Mercer Capital's financial institutions group.But Industry's deposit franchise still has value, Davis said. The bank's rural markets are located within the fast-growing "Texas Triangle," which refers to the areas between Austin, Dallas, Houston and San Antonio."They're right smack in the middle of our footprint," Cadence Bank CEO Dan Rollins told analysts last month. "We drive through and by these markets every day."The acquisition would vault Cadence above a few competitors to become a top-five regional bank in Texas, according to the deal presentation. And with many of Industry's relationships spanning more than a decade, the deal is "deposit-rich," said Valerie Toalson, Cadence's chief financial officer.Cadence, meanwhile, plans to sell some of the bonds in question — making fresh cash available that can be put into higher-yielding loans.Making the math workCadence's stock price has moved higher since the deal was announced, suggesting investors are onboard.It helps that Cadence isn't spending all that much on the acquisition. Cadence agreed to pay between $20 million and $60 million in cash, depending on whether a drop in rates helps Industry dig out of its hole before the deal closes.The sale, which the companies hope to close this year, also gives Cadence the right to walk away if rates go up, and Industry's equity falls below a certain threshold.Industry's troubles are unique, even among the dozens of banks that took a massive hit from their bond portfolios tanking. But many banks still have bigger exposures than they might like, and Cadence's acquisition of Industry shows "there's an avenue to a potential partnership," said Hovde, whose firm advised the selling bank.So the case for buying a bank with certain attractive attributes remains, even if rising interest rates have left it a little bruised.Washington-based Columbia Banking System, for example, has become a powerhouse in the West and has long sought to expand in Southern California. Last month, Columbia announced a deal to buy Irvine, California-based Pacific Premier Bancorp, agreeing to absorb the latter bank's underwater bonds. But Columbia is also gaining the bank's attractive deposit base, including a niche business that serves homeowners associations, and accelerating its plans to expand in Southern California by at least a decade."I've been honestly salivating over the Southern California market for a decade," Tory Nixon, a top executive at Columbia, told analysts last month. "Just the sheer number of companies of all sizes, the density of it, it's just such a wonderful market to be able to be a part of and to be able to grow into."Unlike other deals involving banks with underwater bonds, Columbia did not need to raise extra capital to absorb those hits, partly because Pacific Premier had amassed a large capital buffer of its own.Such capital raises dilute existing banks' shareholders, offering a potential pain point. But in other transactions, investors have encouragingly proven receptive to capital raises and other "creative means to fill the holes," said Burgess, the Piper Sandler investment banker. The trade-offs may make sense if a deal is strategically compelling for the acquiring bank, Burgess said, particularly when the selling bank has been able to skillfully manage its operations despite interest rate dings."This is the house you want. It's the neighborhood you're dying to move into. But it's a fixer-upper," Burgess said.

Federal Reserve Gov. Lisa Cook. Bloomberg News Federal Reserve Gov. Lisa Cook said that financial markets fared well in the face of uncertainty sparked by President Trump's evolving tariff regime, but that more study is needed to understand how risks from nonbanks affect the banking system and vice versa.Speaking at a conference at New York University on Friday, Cook said that the recent market volatility that took place in April after President Trump's "liberation day" tariff announcement was significant; stock market indices shed nearly 20% of their value, volatility indices were the highest since the onset of the COVID pandemic in 2020 and highly leveraged investors unwound their positions. But she said the underlying fundamentals of household and business finances, as well as the functioning of critical markets like Treasury bonds, made the fallout manageable and showed the system's resilience. "The episode provided a real-life example of the large asset-price declines and sudden bursts of volatility that can result from shocks when asset valuations are stretched, as well as the importance of stable and resilient funding markets in absorbing shocks," Cook said. "The experience will surely help us hone our ongoing assessment of financial system vulnerabilities and areas of resilience."Cook went on to say that there are several pockets of interconnectedness between the banking and nonbank sectors that would benefit from further study in order to prevent volatility in one sector from affecting the other. "Episodes of strain in U.S. Treasury markets over the past several years illustrate the importance of nonbank financial intermediaries, a term that encompasses hedge funds, mutual funds, life insurers, finance companies, and money market funds," Cook said. "This is particularly true in the U.S., where credit is provided by a combination of banks and nonbanks that are often connected through counterparty relationships or common exposure.  It would be helpful to have deeper insights into the potential macroeconomic consequences of the shifting interaction between banks and nonbanks."Cook added that greater understanding of the roles that private credit and private equity play in the marketplace — and their interwoven business relationships with banks and other nonbank actors — would be beneficial to regulators and their ability to forestall economic calamity."Efforts to incorporate private credit and private equity into macroeconomic models could spur important lines of research. Layered leverage in intermediation chains involving private equity, private credit funds, banks, and businesses can transmit and amplify real-economy shocks to different parts of the financial sector," Cook said. "In addition, private equity and private credit are macro-relevant sectors that can transmit shocks to the real economy."

A loan officer at a credit union, Stephanie Dombrowski, is this year's Top Producer among women. Dombrowski, who works at Ent Credit Union in Colorado Springs, Colorado, originated $186.5 million last year, followed by Ashley McKenzie of Highlands Residential Mortgage and Nancy Moreland of Brookhollow Mortgage Services.Dombrowski noted that the rising cost of homeowners insurance impacted at least one of her clients. "{It] gave an opportunity to connect to an insurance referral partner, and build stronger trust as this helped lower the buyer's monthly payments," she said.Finding ways to help customers was a key reason for success.READ MORE: LOs pivoting to non-QM, equity products, survey finds"I was able to stand out and empower folks by properly educating them on all financing options and presenting concepts that they didn't know how to ask for," added Lauren Stamper, a senior loan officer at Highlands in Allen, Texas. "I made an intimidating thing much more approachable and tailored to fit people's restricted budgets. Knowledge is power, I'll be doing more of the same this year."RELATED: The Top Producers of 2025: The complete listWhen it comes to artificial intelligence, Origin Bank implemented "Account Chek" technology, said Jaclyn Litton, vice president - sales manager and senior loan officer at the Shreveport, Louisiana company. "But, honestly there is so much artificial intelligence available that could help in building more efficiencies as well as remaining compliant. I look forward to learning more about AI for mortgage in 2025."

U.S. new-home sales rose unexpectedly in April to the highest level since February 2022 on a surge in the South and Midwest.Purchases of new single-family homes increased nearly 11% last month to a 743,000 annual rate, according to government data released Friday. The median estimate in a Bloomberg survey of economists was a 695,000 pace.The gain indicates that the new-homes market is holding up better than the resale market, reflecting the ability of builders to cut prices and offer sales incentives. Sales of previously owned homes have been lackluster even as more homeowners list their properties.The April figure on new homes also suggests that sales stabilized after a weak first quarter, as the previous three months were revised down.The median sales price decreased 2% from a year ago to $407,200, reflecting greater activity in more moderately priced homes. On an annual basis, prices have largely been retreating over the past 12 months. Builders are also helping out on that front, as 34% reported cutting prices this month. That was the largest share since December 2023, according to recent data from the National Association of Home Builders.However, prospects for the residential real estate market this year remain clouded due to persistent affordability challenges that include mortgage rates hovering near 7%. Moreover, consumer anxiety about finances and the employment outlook is building in the wake of higher tariffs, leaving many prospective buyers sidelined.--With assistance from Chris Middleton.

As student debt levels keep rising, a new study spotlights the extent to which they are changing homeownership demographics and hampering financial opportunities for younger generations. Every $1,000 in student debt decreases the likelihood of homeownership by 1.8%, according to analysis conducted by commercial collection agency The Kaplan Group. Researchers looked through data between 2007 to 2024 from publicly available economic and education sources in calculating their findings.  During that period, average student loan debt per borrower also increased by an inflation-adjusted 36.6% to $24,901 from $18,230. On an unadjusted basis, the amount leaped 107% to $37,850, the group said. At the same time, the national homeownership rate dropped 4.9%, remaining below levels reported prior to the Great Financial Crisis."Student debt isn't just a personal finance issue — it's reshaping who can buy homes, when and where. For many young adults, it's the single biggest factor delaying or derailing homeownership," said Dean Kaplan, CEO of the collection agency.Data showed the decrease in homeownership levels particularly pronounced among those generations attending college and approaching historical home buyer age during the multidecade period: millennials and Generation Z.The two generations have the lowest homeownership rates in history, while they also hold the majority of student debt today, often delaying purchases and limiting the properties they can afford. First-time buyers with student loans spent 39% less on their homes compared to those without education debt. The amount of student debt is not the only limiting factor for millennials and Gen Z, the research said. First-time buyers this decade found themselves left on the sidelines as home prices accelerated at their fastest pace in history. Millennials born between 1981 and 1996 began entering adulthood and repaying debts during the start of the Great Financial Crisis, as the U.S. economy sought to recover. Meanwhile, Gen Z came of age during the Covid-19 pandemic and its aftermath, a period of elevated inflation and deteriorating home affordability. Both groups also faced college tuition costs far exceeding those paid by older baby boomers and members of Generation X. Adjusted for inflation, tuition at four-year public colleges surged by 197.4% between 1963 and 2023, according to the Education Data Initiative.The new report comes just weeks after the Trump administration restarted collecting payments from defaulted student loan borrowers this month. Among enforcement measures being taken to recover outstanding debts are wage and Social Security check garnishments.Along with the wealth divide that now exists between younger populations and older generations due to the former's education debt, the financial burden of student loans is leading to a widening chasm within the younger age groups as well. The size of the gap is largely based on the presence or absence of education loans, Kaplan researchers said.Their findings suggest that policymakers and the mortgage finance community will need to revise their approaches to consumers when developing homebuyer and financial education programs.     "To close the generational homeownership gap, stakeholders must move beyond traditional affordability measures. Integrating student debt considerations into housing policy, mortgage lending and financial planning will be key to restoring access to homeownership for younger Americans," the Kaplan report stated. 

With so many calls for higher mortgage rates lately, now might be the perfect time to play contrarian.It’s something I like to do in general, but it seems to work even better when the subject is “mortgage rates.”Often when the consensus is high, things tend to unexpectedly shift and surprise everyone.At the moment, everyone is in the higher-for-longer camp, so much so that it seems they can’t all be right.And when it seems like there’s absolutely no hope in sight, the storm clouds part.Lots of Headwinds for Mortgage Rates Right NowAt the moment, it seems like mortgage rates are riding a bicycle with a flat tire up a steep hill in the pouring rain.Nothing seems to be going their way, whether it’s tariffs, the trade war, the big, beautiful bill (and all that government spending), the U.S. credit rating downgrade, and now even talks about Fannie and Freddie being released.All of these things are contributing to higher bond yields, which directly impact long-term fixed mortgage rates.The 10-year bond yield has risen markedly over the past three weeks, climbing from around 4.15% to 4.55% today.It was as high as 4.60% yesterday, but has since cooled off. Still, that’s enough to put the 30-year fixed firmly back above 7% thanks to bloated spreads.And every time the 30-year fixed climbs back above 7%, you can just feel the wind go out of the housing market’s sails.The monthly payment difference isn’t huge, but the shift in sentiment in palpable.However, what if I told you mortgage rates might still be on track to improve by later this year.And that times like these are when we are most surprised?Back to my contrarian point, it’s when a trade gets crowded that things tend to unravel. When everyone is so sure of something, in this case higher mortgage rates, they go the other way.Zoom Out on Mortgage Rates for a Clearer PictureI always like to zoom out a bit when speaking of mortgage rates. Too much can happen on a day-to-day basis, similar to the stock market.Yes, mortgage rates can change daily, but it’s important to look at the longer trajectory for answers.Just consider this chart from Mortgage News Daily for the past 24 months. There is a clear downward slope in mortgage rates, despite the recent volatility and upward movement.There also tends to be an increase in mortgage rates every spring, which also happens to be the peak home buying season (go figure).Meanwhile, mortgage rates tend to be lowest in winter when things are the slowest (also go figure).That smartened me up for my 2025 mortgage rate predications post, where I made the adjustment for higher rates in the second quarter, before forecasting a move lower in Q3 and Q4.My prediction is still in play and going according to plan, though it might be a bit delayed based on the many events that have taken place.The Fed Is Staying the Course as the Drama Plays Out, Data Is What MattersThere have been a lot of surprises (and fireworks) thus far in 2025, but at the same time we were warned about all of this.Everyone knew Trump winning the election would lead to tariff talk, trade wars, increased government spending, and so on.Even the thought of Fannie and Freddie leaving conservatorship was in the playbook.When it comes down to it, none of this comes as a major surprise. Everyone was told these things were going to happen, so you can’t be all that shocked.This also explains why the Fed has been playing a slow hand, instead of panicking and cutting rates ahead of schedule.However, they are still expected to cut, it’s just that the Fed rate cuts have been pushed out.The same general outlook exists, a cooling economy with rising unemployment, which should lead to lower bond yields and rate cuts.It’s just that because of all the drama and the months of trade wars, and the new tariffs, it’s unclear what the data will look like for a little while.Chances are it’ll show increased inflation. But how much of it? And will it be enough to spark a return to 8% mortgage rates?I watched a video from JPMorgan Asset Management fixed income portfolio manager Kelsey Berro and she did an excellent job putting everything in perspective.She noted that the range for the 10-year bond yield is 3.75% to 4.50%, with short-term risks pushing rates higher, but longer-term, we’re already at the higher end of the range.Meaning we’re already capped out factoring in all the stuff happening at the moment.One of her biggest takeaways was that “The Fed is still in a neutral to easing bias.” There are no rate hikes on the table.In fact, if you look at the CME FedWatch probability chart above, there is a 0.0% chance of a rate hike from now through the end of October 2026. And only a 0.1% chance by the end of 2026.She added that some of the new government budget has already been priced in to the long end of the yield curve.So it’s not like mortgage rates need to keep going up to compensate if it’s already baked in.Remember, we were very close to a 6% 30-year fixed last September, and are now at 7.125% as of this writing.Mortgage rates ARE already higher to compensate.Meanwhile, the economy continues to show signs of weakness and ultimately the future of rates will depend on that very inflation and economic data.That might explain why Fannie Mae’s latest projection released yesterday has the 30-year fixed falling to an even lower 6.1% by the end of 2025 and 5.8% in 2026. 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)

Home sales transactions were cancelled at a near-record rate in April, another likely side effect of uncertainty enhanced by President Trump's tariff announcement earlier in the month, Redfin said.Approximately 56,000 signed purchase agreements were withdrawn during the month, which equates to a 14.3% rate. This is up from 13.5% one year ago and is the worst April since record-keeping started in 2017 for cancellations, with the exception of April 2020, the first month the Covid pandemic impacted the country.The data comes from a Redfin analysis of multiple listing service information and only covers April. Trends are seasonal, the report noted, as the end of the year typically sees higher cancellation rates, while the opposite is true for the spring.It is not just economic uncertainty driving the change. The improved situation in the number of for-sale listings means some buyers are feeling they can do better than the property they contractually agreed to purchase, Redfin said.However, "sticker shock" from the combination of higher mortgage rates and increased home prices is also causing some to have second thoughts.Someone's buyer remorse is another person's opportunity to get a house, one agent noted."Two of my buyers have won deals this way — where the previous buyer canceled and then we wrote an offer before the home was even back on the market, and the seller accepted," Alison Williams, a Redfin agent in Sacramento, California, said in a press release. "It's a tactic that has been working really well, especially when it's a home my client was already interested in. I will circle back with the listing agent to see if the other buyer is wavering."What cities have the most cancellationsOf the 10 largest metro areas with the highest cancellation rates, five are in Florida and two in Texas, Fort Worth at 18.7% and San Antonio, 18.2%.Atlanta had the highest rate of pending home sales falling through in April at 20%. The Florida markets are Orlando, 19.4%; Tampa, 19.1%; Miami,18.9%; Fort Lauderdale, 18.9%; and Jacksonville, 18.4%.The other cities in the top 10 are Riverside, California, 19.1%, and Las Vegas, 18.6%.Ironically, Jacksonville was one of the 10 metros where cancellation rates declined, down by 1.3 percentage points from last April; only Detroit had a larger decline at 3 percentage points.Anaheim, California, had the largest year-over-year gain, at 3.1 percentage points.The situation around property values is likely to change in the second half of the year, Redfin said.What is happening with home values in 2025The brokerage is predicting flat home price growth for the third quarter and a 1% decline for the three months at the end of the year, as the market shifts to the buyer's side.Redfin's own data has existing home sales down 1.1% annually, compared with 0.5% according to the National Association of Realtors.Meanwhile, total inventory rose 16.7% year over year to its highest mark in five years, Redfin said.New listings rose 8.4% year over year to their highest in nearly three years during the four weeks ending May 18, a separate Redfin report noted. During the period, pending sales fell 2.2%. This is now the lowest level for this time of year since the real estate brokerage started keeping records in 2015."My advice to homeowners: if you're planning to sell in the next year or two, do it now because we don't know what's going to happen with home values or the larger economy," Hazel Shakur, a Redfin agent in Maryland, said in a press release. "Buyers should know that because of the uncertainty in the air, they may be able to get a home for under asking price, or get concessions from the seller."