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Asset managers and strategists have for years touted mortgage bonds as a haven when the economy stumbles, but the debt has underwhelmed since President Donald Trump announced his tariff blitz. Agency mortgage backed securities have slipped about 1.1% since the start of April, trailing Treasuries and the broader US bond market. MBS tend to suffer when there's more uncertainty about the direction of interest rates. The most liquid part of the market, known as current coupon bonds, has also lagged Treasuries. READ MORE: What do the recent FHFA shifts mean for mortgage lenders?Usually the bonds perform well during recessions, as the Federal Reserve cuts rates, and the direction of monetary policy and bond yields becomes a little more predictable. Mortgage bonds are supported by government-backed companies like Fannie Mae and Freddie Mac, giving them little credit risk. Often the biggest factor for their valuations is how quickly or slowly principal will come back to investors, which is tied to the probable direction of interest rates.But their recent underperformance underscores a real risk with mortgage bonds: they can get hit when rates markets fluctuate wildly. In this market, there's still ample ambiguity about where rates are headed and if a recession is coming. This week, Fed Chair Jerome Powell said he "couldn't confidently predict" future policy. A measure of interest-rate uncertainty, the ICE BofA MOVE Index, is up since mid-February. "MBS performance was worse last month than some investors anticipated," said Zachary Aronson, a portfolio manager at MacKay Shields, a money manager owned by New York Life. "While agency bonds are protected against defaults, they remain vulnerable to uncertainty — especially around interest rates and Fed policy." READ MORE: What the latest Fed meeting means for mortgage lendersPrices on Treasuries have been in turmoil since at least the start of April, when Trump announced widespread tariffs aimed at a series of nations. Since then he's delayed the implementation of those levies, and talked more about negotiating bilateral trade agreements with multiple countries, which has helped soothe markets. Mortgage bond spreads have tightened modestly this week, and some investors see the potential for more of that to come. "During the volatility of last month's tariff news MBS underperformed pretty significantly, including against corporate bonds," said Brian Quigley, a portfolio manager at Vanguard. "But it's in the second leg of risk off that MBS has the real advantage. If economic growth slows, the credit guarantee of MBS helps it outperform compared with corporates, which could see higher defaults."Stubbornly HighMoney managers' bulging ownership of MBS may have helped push risk premiums wider during April's tumult, according to Citigroup Inc. strategist Ankur Mehta. As investors yanked money from bond funds, money managers, heftily weighted toward the bonds over Treasuries, were forced to offload some of those holdings."There was a dash for cash as funds rushed to meet redemptions, and the selling was skewed towards MBS given their overweights in the sector," Mehta said.A month after Trump's tariff announcement first rocked markets, MBS risk premiums remain "stubbornly elevated," said strategists at Bank of America Corp earlier this week. Analysts at Goldman Sachs also this week noted the relatively high levels for MBS spreads even as spreads on corporate bonds have retreated even as spreads on corporate bonds have retreated. Performance over a few weeks isn't how most investors look at returns. MBS aren't doing terribly so far this year, having gained 2.3%, outperforming credit and the broader market, not to mention US equities, which are down 3.3% through Thursday's close on a total return basis.The outlook for the rest of the year is much harder to forecast. Corporate bonds can sell off during economic downturns as investors worry about companies paying the bills and revenue shrinking, while bonds with less credit risk can perform better. "We think these assets are incredibly attractive," said Bryan Whalen, fixed income chief investment officer of TCW, referring to mortgage bonds. "We're comfortable where we are, acknowledging that the short-term has the potential to be a little bit rocky." 

While folks debate whether mortgage rates are going higher or lower, most expect a boom if they eventually do come down.Even Dave Ramsey, who is known for being a very shrewd financial guru, thinks so.In a new interview with TheStreet, he said if rates sink a point or two, prospective buyers will likely return in droves.And that could create a “fire” in the housing market, which has suffered lately from a severe lack of affordability.But Ramsey also some very strict rules for home buying, which still might not pencil even if rates come back down to record lows.Ramsey Expects Lower Mortgage Rates, Housing Market ComebackWhile he wasn’t too specific, Dave Ramsey told TheStreet that mortgage rates will “probably fall,” and with that he expects “this market to come back.”He didn’t specify why mortgage rates might come down, just that they’d improve, perhaps because he’s an optimist.Maybe because like everyone else, he knows the housing market isn’t sustainable at rates and prices like these.To that end, he doesn’t believe homes prices are going to fall, even though inventory is beginning to rise and put pressure on sellers.In a nutshell, he said they aren’t going to come down because there’s more demand than supply.I suppose that varies based on the city in question, and there’s certainly been a shift to a buyer’s market in 2025 relative to prior years.But he believes there’s still a lot of pent-up demand from prospective home buyers, who continue to play the waiting game.And if mortgage rates somehow see a sizable drop, that could be the catalyst necessary to get things going again.For the record, 2024 saw the lowest existing home sales going back to 1995, and was similar to the depressed levels seen in 2023 as well.So far, 2025 doesn’t appear to be markedly better, though it depends on the direction of the economy, mortgage rates, and the trade war and tariffs.Does a Home Purchase Pencil Today Using Ramsey’s Math?One issue with Dave’s optimism is he’s pretty strict when it comes to home buying math.He’s got all sorts of rules you should abide by if you’re wanting to purchase a home, including a 25% rule, where only 25% of your take-home pay can be used toward the housing payment.This is much lower than the maximum DTI ratios allowed by Fannie Mae, Freddie Mac, the FHA, and so on, which accept ratios in the 40s and beyond.And those use gross income, not net, after-tax pay. That can be tough these days with home prices and mortgage rates where they are.On top of that, he has said in the past that “the only kind of mortgage I recommend is a 15-year, fixed-rate loan.”So let’s just pretend you make $100,000 annually and homes are going for $360,000, which is around the national average.Using ADP’s gross-to-net calculator, gross pay is $8,333 and take-home pay is $6,561 per month (using their default settings).If you can muster a 20% down payment, which Ramsey strongly advises, you’re looking at a loan amount of $288,000.So we’ll use a 6% 15-year fixed mortgage rate, which gives you a monthly principal and interest payment of $2,430.Next, we add in property taxes of roughly $375 per month and another $100 monthly for hazard insurance.All in you’re at $2,905, which would be about 44% of take-home pay using that ADP calculator.Ultimately, you can only allocate $1,640 toward PITI using Dave’s rules. And I was being pretty lenient here with a $100k salary and $360,000 purchase price.By His Rules, We Need Much Lower Mortgage RatesIf we abide by Dave’s many rules, we need significantly lower mortgage rates to make it all work.How low exactly? Well, using my example above we can only allocate $1,640 toward the housing payment.The property taxes and hazard insurance are fixed at about $475 per month and part of the housing payment.That leaves $1,165 for the principal and interest portion of the payment. Not a lot of money, especially when we have to take out a 15-year mortgage instead of a 30-year mortgage.Not even a 1% mortgage rate would get us there. But I suppose he knows the vast majority of home buyers out there don’t abide by all his rules.If they did, we wouldn’t have many homes sales (if any). Or we’d need salaries to be a whole lot higher. Or home prices a whole lot lower.But he said he doesn’t see home prices falling, so it appears the pent-up demand either makes a lot more money, or will break some of these stringent rules to get in the door and buy a home.One also has to wonder if mortgage rates actually do fall one or two percentage points, what will the economy look like?We all want mortgage rates to ease to boost housing affordability, but a big drop like that might only come from a major economic downturn. 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)

(Bloomberg) -- US Treasuries sank as investors took job market data and a US-UK trade framework as reasons to embrace riskier assets and pare back their bets on interest-rate cuts.The declines on Thursday pushed two- to 10-year yields higher by at least 10 basis points on the day after President Donald Trump urged people to buy stocks based on the latest trade developments. Yields on 30-year bonds were up about eight basis points to 4.85% after an auction was met with tepid investor demand."The hard data has not yet followed the soft data. A trade deal is done. Risk appetite is better. The Fed is in no hurry," said George Catrambone, head of fixed income at DWS Americas. Because of all that, "some of the rate-cut expectations have walked themselves out of the market."Swaps priced in a 15% chance of a quarter-point rate cut at the next Federal Reserve meeting in June, compared to about 30% on Tuesday and more than 50% a week ago. Markets see barely three reductions this year, which would bring rates to a range of 3.5% to 3.75%. At the end of April, four rate cuts were fully priced in.Short-term yields had already been rising as traders pared bets on cuts. Chair Jerome Powell said Wednesday the Fed wasn't in a rush to lower borrowing costs. Officials voted unanimously to keep the benchmark federal funds rate in a range of 4.25% to 4.5%, where it has been since December.In a statement, policymakers said they see a growing risk of both higher inflation and rising unemployment. Still, Powell said the labor market remains resilient amid the trade uncertainties — which was reinforced Thursday by a drop in the weekly tally of new jobless."The idea of preemptive cuts is not on the table, which means they may end up being a little bit late to whatever happens," said David Rogal, portfolio manager, fundamental fixed income group at BlackRock. "There's just a lot of uncertainty in both directions."On Thursday, the S&P 500 rose after Trump touted what he described as a comprehensive trade agreement with the UK, marking the first of his promised deals with countries around the world. The Bloomberg Dollar Spot Index rose by 0.7%, the biggest jump in over a month.Trump criticized the Fed's policy stance again on Thursday, saying there's virtually no inflation in the US and that Powell "doesn't have a clue." The president has been calling for the central bank to lower rates to boost the economy, and has even suggested he could remove the Fed Chair before the end of his term."Powell definitely gave a whiff of sort of stagflationary risks, but because of the political noise around it at the moment, he was very careful not to say anything inflammatory," said Neil Sutherland, portfolio manager at Schroder Investment Management. "It's really difficult for them to make a big call one way or the other."Pimco's Chief Investment Officer Dan Ivascyn said in an interview with the Financial Times that the probability of a US economic recession is the highest it's been in a few years. The firm has made small increases to its Treasury holdings over the previous two months, focusing on short maturities.--With assistance from James Hirai and Anya Andrianova.(Updates yield levels.)More stories like this are available on bloomberg.com

Property taxes for all homeowners in the U.S. rose between 2021 and 2023, but varied widely in different regions of the country.Median property taxes lurched upwards by an average of 10.4% to an annual payment of $2,969, or $247 a month, putting additional burden on property owners, according to a LendingTree analysis.Though taxes rose across the board, the increases ranged widely across the 50 largest metros ranging from $1,091 to $9,937 annually, the financial services platform said in its report.While LendingTree did not include data from 2024, a similar analysis by another vendor found that last year homeowners paid an average of $4,172 in property taxes. "There are already so many factors stacked up against homeowners today," said Matt Schulz, chief consumer finance analyst at LendingTree, commenting on the property tax increases."The fact that property taxes have risen so quickly just makes a challenging situation that much more difficult," he added in a statement. "That extra money that has to go to pay taxes is money that can't go toward dealing with high grocery prices, building an emergency fund, growing your retirement savings or other financial goals."Homeowners in Tampa, Florida (23.3%), Indianapolis (19.8%) and Dallas (19%) saw the steepest property tax increases in the nation over the three-year period. In contrast, Pittsburgh (4.4%), Philadelphia (8.2%) and Milwaukee (8.3%) recorded the smallest increases.Some Southern metro areas had the lowest overall median property taxes, according to LendingTree's analysis. Among the 50 largest metro areas, residents of Birmingham, Alabama, paid the lowest median property tax at $1,091 annually. Homeowners in Memphis, Tennessee, and Louisville, Kentucky, followed with average annual payments of $1,856 and $1,912, respectively.Unsurprisingly, residents in metro areas such as New York ($9,937), San Jose, California ($9,554), and San Francisco ($8,156) pay the highest property taxes in the nation.Among the 10 metro areas with the highest property taxes, four are in California — San Jose, San Francisco, Los Angeles and San Diego — and two are in Texas: Austin and Dallas."Those states are known for their relatively high tax rates and housing prices," Schulz said. "As a homeowner in Austin, I can tell you I'm not surprised to find my metro near the top. As Austin has boomed in recent years, many people have moved here from California and other places because of relatively low housing prices, only to be unpleasantly surprised by the size of their yearly property tax bill. It's a big deal."On a state-by-state level legislation cropped up to neutralize the spike in property taxes. Two states, Florida and Georgia, passed measures tying their property tax burden to the pace of inflation last year.Meanwhile, Florida's Governor Ron DeSantis announced a plan to wipe out the state's property levies.Critics of the idea have pointed out that the state's lawmakers would have to raise $43 billion to maintain the same level of public services, according to estimates from the Florida Policy Institute. Tax levies, though a nuisance to some, are essential for funding public schools, law enforcement and infrastructure. 

Serious oversights or inconsistencies appear in one-third of traditional property assessments conducted by human appraisers, resulting potentially several billion dollars worth of financial penalties for lenders. Almost 34% of appraisals had a serious unwarranted condition or quality adjustment that wasn't justified after further examination by artificial intelligence tools, according to a white paper from technology firm Restb.ai. The errors subject lenders to repurchases of property-collateralized loans that could cost them between $27.1 billion and $59.7 billion.Overall, three out of four appraisals showed inconsistencies that could lead to incorrect valuations, the company also said. Among issues found by Restb.ai, which specializes in using AI-backed computer vision tools to determine valuation, were a challenging classification system, lack of transparency and human-imposed limits on how outcomes might be reviewed by appraisal management companies that allow errors to slip through. "The scale of flawed condition and quality adjustments in appraisals is bigger than most people realize," said Restb.ai chief product officer Nathan Brannen in a press release. "Most AMCs and lenders simply don't have a quick and easy way to check for these issues, so they ignore the problem and hope for the best."In the study that analyzed over 1,200 completed assessments against almost 6,500 comparable units, researchers noted limitations in the uniform appraisal dataset in grading a home's condition and quality as a contributor to inconsistency. Limited granularity in the UAD scale led the overwhelming majority of properties to fall in the middle range of values when looking at a home's condition and quality. Even when both a professionally assessed property and AI came in with similar ratings, appraisers still made adjustments on almost 12% for condition and 5% for quality, raising questions about transparency.  Restb.ai's research also pointed to a 2024 Fannie Mae study, which cited an inadequate selection and adjustments of comparables and inaccurate reporting of appraised homes contributing to inaccuracy. Using AI for property assessmentsTechnology-focused companies like ICE Mortgage Technology and Restb.ai have turned to artificial intelligence to help with valuation, with AI allowing for quick examination of a property's images or photographs.  "While some appraisers remain skeptical of AI, its value is in its ability to immediately flag potential issues for closer review rather than waiting for discrepancies to be found later in the appraisal process," the paper said. Using artificial intelligence in the valuation process  would also help remove some subconscious biases that emerge when a professional appraiser does the work, Restb.ai also said. Another advantage is its ability to consistently analyze properties repeatedly.  "AI is trained over property imagery independently of that property's price, region, owners, or any other aspect that is more difficult for a human to abstract," the firm said. 

A larger number of homeowners are open to accessing their property's equity compared with three years ago, but an education gap remains regarding the product, an update of a 2022 survey from MeridianLink found.The interest in home equity products increased to 28% of consumers saying they are somewhat or very likely to take out a home equity loan now from 21% three years ago, noted JP Kelly, senior vice president of mortgage at MeridianLink."There is still a little bit of a barrier due to a lack of knowledge of the potential use cases," Kelly said.Why consumers are reluctantConsumers' hesitation is around high interest rates, cited by 63%; the fear of risking homeownership, 22%, and uncertainty about repayment terms, 18%.Americans have a record amount of equity tied up in their homes, about $35 trillion. But financial institutions in particular need to educate consumers about what they can use a home equity loan for, he said.The amount of tappable equity, the amount available leaving borrowers with an 80% loan-to-value cushion, is $17 trillion at the end of last year according to ICE Mortgage Technology.Among the obvious reasons to tap ones' equity is to finance home improvements, especially at a time when higher first mortgage rates are influencing any decisions on moving.Teach consumers how to use their home equityPeople might not be aware of other reasons, such as paying down higher cost debt such as credit cards or other forms of adjustable rate financing."It's important that we have to educate the home borrowers that it's a much more affordable use to use their equity to pay down that credit card debt where you're paying potentially 25%, 26% interest," said Kelly.Only 16% of the respondents said they would take a home equity loan to consolidate debt. The leading reason, cited by 45%, was to use it for renovations or home improvements.Meanwhile, 16% would use the money to invest in new properties, 11% said they plan to create an emergency fund, while 5% are looking to pay down medical debt.Fixing the product and the processBesides educating the customers, lenders can also work on simplifying the process and developing flexible loan terms and repayment options, the MerdianLink survey found.Most home equity lines of credit are adjustable-rate products, and this is what caught many borrowers in the storm of the financial crisis.The volatility generated in the markets by the headlines over the Trump Administration's tariff policies are a marketing opportunity for home equity products, a recent survey from Point suggests."Right now, most of the borrowers are of the mindset that we're going to be in an interest rate environment that will go down, so HELOCs don't scare them as much," MeridianLink's Kelly said. "But educating them to the potential pitfalls of a variable interest rate product, and making sure that they are taking amounts that are comfortable and safe for them if rates were to go back up, that is a key component too."Pitfalls in home equity for lendersLenders need to be mindful of these pitfalls as well. "I think it's important for us, as an industry in general, to make sure we keep our guard rails up and be diligent around that as well, and not overly loosen and put people into products they have no business gaining," Kelly said.When looking for a home equity lender, 72% of borrowers prioritize competitive interest rates, 43% also look at the lender's reputation and 41% value convenience and personalization.These products used to exclusively be in the purview of depositories, as they had to be put into portfolio, but a secondary market has now developed which independent mortgage bankers could now take advantage of, Kelly said. Another competitive threat is companies like Point or Unison, which market home equity investment products.Rate volatility cuts both waysAs for the recent volatility in Treasury yields and interest rates hurting or helping the home equity business, it can go both directions."I don't think it has to be one way or the other necessarily, as long as we go back to that educational point of view, and they're making sure that they're educating the borrowers on what they can use the equity for in their home, and again, making sure they're aware that that volatility can affect their rates as they're adjusting," said Kelly.

Federal Reserve Gov. Michael Barr.Bloomberg News The Federal Reserve is still in wait-and-see mode for how the U.S. economy will respond to stiff new tariffs, but at least one central bank official is confident the outcome will not be positive.In a Friday morning speech, Fed Gov. Michael Barr said the tariffs have already "clouded" the overall economic outlook and raised uncertainty among consumers and businesses. He expects those sentiments to translate real economic pain in the near future. "I expect tariffs to lead to higher inflation in the United States and lower growth both in the United States and abroad starting later this year," Barr said in a speech delivered at the Reykjavik Economic Conference in Iceland. In particular, he said he worries that high tariffs will disrupt global supply chains in ways that result in "persistent upward pressure on inflation" rather than a one-time step up in price level, as other Fed officials have predicted. If this happens, Barr said, businesses will have to undergo the lengthy and expensive process of rerouting their distribution networks, an outcome that could have serious consequences for suppliers, many of which would struggle to survive."This concern is particularly acute for small businesses, which are less diversified, less able to access credit and hence more vulnerable to adverse shocks," he said. "Small businesses play a vital role in production networks, often providing specialized inputs that can't easily be sourced elsewhere, and business failures could further disrupt supply chains."He pointed to the COVID-19 pandemic as a recent example of how such disruptions can have "large and lasting effects on prices, as well as output."Tariffs could also lead to higher unemployment, particularly if they result in a broader economic slowdown, Barr said, an outcome that would challenge both sides of the Fed's dual mandate to maintain maximum employment and stable prices."Thus, the FOMC may be in a difficult position if we were to see both rising inflation and rising unemployment," he said.Echoing comments from Fed Chair Jerome Powell during his post-Federal Open Market Committee press conference on Wednesday, Barr emphasized that the U.S. economy is heading into this period of economic uncertainty and volatility on steady footing, with low unemployment and an inflation rate that — while still above the Fed's 2% target — is heading in the right direction. Barr added that the Fed's current monetary stance, with a federal funds rate targeting rates between 4.25% and 4.5%, is "in a good position to adjust as conditions unfold."Barr discussed his economic outlook during a speech on the impacts of artificial intelligence — a topic he has addressed several times in recent months and with more regularity since he resigned from his position as the Fed's vice chair for supervision. In his speech, Barr outlined the potential ramifications of AI advancements on the economy and society more broadly. He noted that AI will likely create a host of opportunities for growth and development, but will also come with growing pains and challenges that need to be addressed through policy. "AI is poised to transform our economy, likely in profound ways. But the speed and extent of that transformation are not yet clear," he said. "AI is likely to boost productivity, increase scientific discovery and transform the nature of work. How these developments unfold will have important implications for society and for central bankers."

Rocket Cos., preparing for its twin acquisitions of Mr. Cooper and Redfin, sunk back into the red for the first quarter, the second time in the past three quarters it has lost money.But as the company noted, one of its bright spots was in home equity lending, which had another record quarter, as homeowners looked to access their equity without affecting their first-lien mortgage rate."If we consistently have quarter over quarter growth, if you think about the market share opportunity there, regardless, you know, if rates are at 7% or if rates are at 6%, that product is still very attractive," said Brian Brown, chief financial officer, on the earnings call. "So we think there's a really long runway there."The financials behind Rocket’s quarterly lossRocket lost $212 million during the quarter, compared with a strongly profitable fourth quarter of $649 million, and earnings of $291 million for the period ended March 31, 2024.On a GAAP basis, Rocket had total revenue of $1 billion, and an adjusted $1.3 billion for the period, which was at the high end of past guidance.However, expenses in the first quarter were $1.26 billion. Those were up from $1.1 billion one year prior.Using the non-GAAP adjusted income metric, Rocket made $80 million in the first quarter, versus $84 million in the same period in 2024.The year started off strong, Varun Krishna, CEO said on the earnings call, especially as mortgage rates dropped during the quarter.In particular March was a high point at Rocket, as it served 21% more origination clients than it did in the same month in 2023.Momentum shifts at the start of AprilBut in April, which is in the second quarter, the market dynamics, normally positive for the start of the spring home purchase season, shifted. That came after President Trump's tariff announcement, which roiled both mortgage rates and consumer confidence."It actually marked a sharp reversal in earlier momentum, and that's for a few reasons," Krishna said. "Following global tariff announcements, the stock and bond markets reacted with volatility, and the 10-year Treasury yield fluctuated sharply."Purchase applications shrunk by double digit percentages in April, which the mortgage industry had not seen since the financial crisis."While these short-term headwinds are shaping consumer behavior, certainly it also reinforces our conviction for who we are and where we're going," Krishna said. In this environment an integrated home ownership platform becomes an essential pursuit."Production up year-over-year in both channelsTotal origination volume was $21.6 billion, down from $27.8 billion three months ago but up from $20.2 billion in the first quarter last year.The direct-to-consumer channel had sold loan volume of $11.3 billion, up from over $9 billion a year ago, while the partner channel did $9.2 billion, up from $7.8 billion.Second quarter objectives are achievable"For the second quarter, we expect adjusted revenue to be in the range of $1.175 billion to $1.325 billion with the midpoint of this range representing 2% year-over-year growth," said Brown. "This outlook reflects what was a challenging April from both a margin and volume perspective, and our expectation that May and June will perform sequentially better than April."This is achievable despite the uncertain market backdrop, Brown continued.Servicing loses money on fair value adjustmentOn the servicing side, Rocket lost $48.5 million as $400.7 million of servicing fee income was cancelled out by a $449.2 million negative adjustment to the fair value of its rights. A year ago, it made $402.3 million in servicing, including a positive adjustment of $56.5 million.During the call, management was asked if it was considering further acquisitions in order to expand its purchase mortgage business as well as the distributed retail channel. As part of the Redfin deal, Rocket is picking up Bay Equity Home Loans.Rocket right now is focused on the two pending deals, being "knee deep in integration preparation," and that will be its primary focus, Krishna said.Fitch removes Ratings Watch statusThe day before the earnings were released, May 7, Fitch Ratings removed Rocket Mortgage from Ratings Watch Negative status and affirmed its "BBB-" issuer default rating.This change reflects Fitch's consideration of the expected impact of the merger agreement with Mr. Cooper, the first quarter financial results at both companies, along with additional information received from Rocket on its planned capital structure. Rocket enhanced its liquidity with a line of credit from JPMorgan Chase."These factors increase Fitch's confidence that corporate leverage will decline below the downgrade trigger of 1.0x within one year of transaction closing," the Fitch report said. "Still, negative rating action could occur if the company fails to show meaningful progress toward achieving 1.0x corporate leverage near term or if execution risks related to merger integration lead to operational disruptions, which impact market positioning or result in weakened financial metrics."Redfin also loses money in the quarterThe Fitch analysis did not discuss the pending Redfin purchase.Redfin, which Rocket signed a deal to acquire on March 10 for $1.75 billion, reported a deeper year-over-year loss for the first quarter, at $92.5 million, compared with $36.4 million in the fourth quarter and $66.8 million in the same period in 2024.Gross profit, which is primarily revenue minus the costs associated, were $70.6 million, essentially flat from one year ago at $70.8 million. Fourth quarter gross profit was $81,8 million.Redfin's mortgage segment, including Bay Equity Home Loans, lost $2.3 million during the first quarter, versus a $327,000 loss a year ago.It earned $974,000 from the title insurance segment, versus a $447,000 loss in the first quarter of 2024.Bay Equity originated $887 million for the first quarter, down from $1.0 billion in the fourth quarter and $969 million in the first quarter of 2024.Management points to the positive"Redfin profits were at the high end of the guidance we gave investors in our last earnings call," CEO Glenn Kelman said in a press release. "The number of Redfin lead agents increased 32% year on year, and loyalty sales increased 40% year on year, thanks to our new plan to pay agents entirely on commission."However, because of the merger, Redfin did not do a quarterly call, nor is it providing forward guidance.The company said it had its best quarter for mortgage cross-selling, with a 29% attach rate."Many Redfin employees, from agents to engineers, have been over the moon about Rocket's vision of a home-ownership platform," Kelman said. "We can't wait to join Rocket and build the future of homeownership."Previously, Mr. Cooper reported first quarter results, with a net profit of $88 million impacted by an $82 million servicing rights valuation.

The nation's housing regulator is temporarily barred from imposing the Trump administration's agenda on grants for several localities to combat homelessness, a judge ruled Wednesday.U.S. District Judge Barbara Rothstein on Wednesday issued a 14-day temporary restraining order on the Department of Housing and Urban Development, the Department of Transportation, and the Federal Transit Administration. The departments sought to impose grant conditions based on President Trump's executive orders regarding diversity, equity and inclusion; immigration enforcement; gender identity and abortion. Eight cities and counties said in a lawsuit filed last week that $280 million in HUD grants were at stake. The local governments use the funds provided by HUD's Continuum of Care program to serve homeless residents via shelters, rental assistance, child care and other services. The complaint in a Washington federal court also cited $446 million in appropriated FTA grants at risk for the county which encompasses Seattle. HUD Secretary Scott Turner, who has championed combating homelessness, previously said HUD's COC program was used by "the left to push a woke agenda." "COC funds will now be used for their intended purpose — they will not promote DEI, enforce 'gender ideology,' support abortion, subsidize illegal immigration, and discriminate against faith-based groups," wrote Turner in a post to X (formerly Twitter) in March. Local prosecutors from Washington state and Bay Area counties, Boston, Columbus and New York City sued HUD over new grant terms, claiming among other violations breaches of the Fifth and Tenth Amendments. Some of those prosecutors on Thursday lauded Judge Rothstein's decision. "These new grant conditions blatantly violate the Constitution and have nothing to do with the purpose or performance of these grants," said David Chiu, San Francisco city attorney, in a press release. "This is part of Trump's strategy to push his ideology by threatening local programs and budgets."Spokespeople for HUD didn't return a request for comment Thursday.The executive orders tied to the homelessness grant proposals call on feds to end support for DEI efforts; for "taxpayer subsidization of open borders" and sanctuary cities; for "gender ideology extremism"; and for efforts promoting access to lawful abortions. Violators could also be subject to the False Claims Act, which is punishable with civil fines in the tens of thousands of dollars, according to the lawsuit. Local prosecutors argue HUD and other agencies aren't allowed to condition already-awarded, and soon-to-be awarded funds on unlawful and unconstitutional terms. Counties and cities also argue the stipulations are vague, and that it's unclear what would constitute a violation of the EOs.In opposing the TRO, attorneys for HUD, DOT and the FTA rejected the claims and said the case should be litigated rather in the U.S. Court of Federal Claims. Rothstein, who was appointed to the federal bench by former president Jimmy Carter, said plaintiffs showed a likelihood of success on the merits of their claims."The conditions that defendants added … likely exceed defendants' authority, as circumscribed by the Constitution," wrote Rothstein. HUD is realigning under the Trump administration, already shedding over $100 million worth of vendor contracts. The White House is also asking for a $33.6 billion budget cut for the department in the upcoming fiscal year. The nation's housing regulator has received some backlash over its moves, recently for its planned rescission of the Affirmatively Furthering Fair Housing policy.

Loan officers: when speaking to potential borrowers who are waiting for home prices to drop, tell them data from the first quarter of 2025 shows that, in most regions nationwide, they shouldn't wait. Prices for single-family homes rose in 83% of measured metro areas, an analysis by the National Association of Realtors found. Though this is a drop from 89% the quarter prior, it highlights that buying a house continues to remain out of reach for some.The national median single-family existing-home price grew 3.4% from a year ago to $402,300, NAR's data shows. In tandem, monthly mortgage payments on properties with a 20% down payment increased by 4.1% to $2,120."Most metro markets continue to set new record highs for home prices," said Lawrence Yun, NAR's chief economist, in a statement. "In the first quarter, the Northeast performed best in both sales and price gains by percentage. Despite the stronger job additions, the South lagged with declining sales and virtually no price appreciation," he added.In the Northeast, several metro areas saw home prices rise by at least 10% year-over-year. Syracuse, New York, led the way with a 17.9% increase, followed by the Ohio-Pennsylvania metro area (13.6%), Nassau County–Suffolk County, New York (12.0%), Toledo, Ohio (11.1%), Cleveland–Elyria, Ohio (11.1%), and Rochester, New York (11.1%).Montgomery, Alabama, also posted a notable gain, with home prices climbing 16.1% compared to the same time last year.The most expensive housing markets in the country are still in California. San Jose–Sunnyvale–Santa Clara saw prices rise 9.8%, followed by Anaheim–Santa Ana–Irvine (6.2%), San Diego–Carlsbad (5.7%), and Los Angeles–Long Beach–Glendale (4.8%).NAR's Yun pointed out the very expensive home prices partly reflect "multiple years of home underproduction in those metro markets." Something that the Trump administration has vowed to address by easing regulations."Another factor is the low homeownership rates in these areas, implying more unequal wealth distribution. Affordable markets tend to have more adequate supply and higher homeownership rates," Yun added.The economist also pointed out that areas that were hit with price declines in the previous year, including Boise, Las Vegas, San Francisco and Seattle, are rebounding."Similarly, some markets currently experiencing price declines – but with solid job growth – could see prices recover in the near future, such as Austin, San Antonio, Huntsville, Myrtle Beach, Raleigh and many Florida markets," he said.Despite an upward trend, some predict a home price downturnThese results run counter to predictions made by some that home prices will soon start to wind down.In a recent interview, Christopher Whalen, chairman of Whalen Global Advisors LLC, predicted that home prices will fall by 20% in the near term.He noted this is a result of the Federal Reserve enabling a huge accumulation of debt, "now we're getting rid of it, but I will make one prediction, I think you're going to have a macro housing price reset in three to four years.""I think we're going to go back down to the 2020-level of home prices on average," Whalen predicted.