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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 68 February 2024 J O U R N A L » Cap rates and valuations, base interest rates, and rate volatility are all viewed as having negative impacts on today's financing activity. » Originators expect the market to stabi- lize throughout 2024. » In 2024, lenders are expected to have a (slightly) stronger appetite to lend than borrowers will have to borrow. » Borrowing and lending volumes are generally expected to rise in 2024. » Expectations for particular capital sources vary broadly. » There is a wide range of views as to whether the supply of or demand for debt is greater. » Across a variety of factors affecting the CRE finance volumes, more are seen as negative than positive for 2024. According to the Mortgage Bankers Association's (MBA) latest Commercial/ Multifamily Mortgage Debt Outstanding quarterly report on Q3 2023, the level of commercial/multifamily mortgage debt outstanding increased by $37.1 billion (0.8%) in the third quarter of 2023. Total commercial/multifamily mortgage debt outstanding rose to $4.63 trillion at the end of Q3, while multifamily mortgage debt alone increased $26.8 billion (1.3%) to $2.05 trillion from Q2 2023. "The level of commercial mortgage debt outstanding has continued to increase despite a continued pullback in borrowing," Woodwell said. "A decline in sales transaction and refinance volumes has meant less new debt being extended, but it also means that fewer loans are paying off than in many earlier periods. The result is that debt levels continue to rise, but at a pace that is roughly half of what was seen last year." The 2024 MBA CREF Outlook Survey was conducted between November 30 and December 15, 2023. The survey request was sent to leaders at 60 of the top commercial and multifamily mortgage origination firms, as determined by MBA's 2022 Annual Origination Rankings Report. The survey had a response rate of 40%. Percentages shown are calculated based on applicable responses. Non-responses and "n.a." responses are excluded from the percentage denominator. CREDIT AVAILABILITY FALLS TO DECADE- PLUS LOW M ortgage credit availability decreased by 4.6% to 92.1 in December 2023, according to the latest Mortgage Credit Availability In- dex (MCAI), a report from the Mortgage Bankers Association (MBA) that analyzes data from ICE Mortgage Technology. A decline in the MCAI indicates that lending standards are tightening, while increases in the MCAI are indicative of loosening credit. The Index was bench- marked to 100 in March 2012. By loan type, the Conventional MCAI decreased by 3.2%, while the Government MCAI decreased by 5.9%. Of the compo- nent indices of the Conventional MCAI, the Jumbo MCAI decreased by 1.7%, and the Conforming MCAI fell by 5.9%. "Credit availability declined in December to the lowest level since 2012, as ongoing industry consolidation is resulting in more loan programs being removed from the marketplace," said Joel Kan, MBA's VP and Deputy Chief Economist. "Both conventional and gov- ernment indices experienced decreases. The decrease in the government index was driven by lower investor demand for renovation loans and streamline refinance loans." As 2023 closed, the 30-year, fixed-rate mortgage (FRM) was on the decline, falling the final two months of the year after edging toward the 8% mark at the outset of Q4. MEDIAN HOUSING PAYMENT DOWN FROM OCTOBER PEAK A ccording to a new report from Redfin, the median U.S. mort- gage payment dropped $372 to $2,361 during the four weeks preceding the new year, a 14% drop from its all-time high in October resulting in a 14% drop. The market is beginning to see early-stage homebuying demand return as buyers take advantage of dropping mortgage rates and additional inventory that has hit the market in the last few weeks. Redfin's Homebuyer Demand Index—a seasonally adjusted measure of requests for tours and other homebuying services from Redfin agents—is up 10% from a month ago to its highest level since August. Pending sales are down just 3% annually, the smallest decline in two years. "There have been more tours and more offers on my listings since mort- gage rates started declining," said Shay Stein, a Redfin Premier agent in Las Ve- gas. "It's all about perspective: Two years ago, buyers would have cried about a 6% mortgage rate. Now, they're happy they've dropped down to the mid-6s." By the numbers according to Redfin: » Median Sales Price: $363,371, a 4.4% year-over-year increase » Median Asking Price: $359,236, a 4.3% year-over-year increase » Median Monthly Mortgage Payment: $2,361, a 5.4% year-over-year increase » Pending Sales: 52,552, a 3% decline year over year » New Listings: 44,297, up 9.5% year over year » Active Listings: 789,516, down 3.9% year over year » Months of Supply: 3.8 months » Median Days on Market: 41, down two days year over year Looking at the top 50 metropolitan areas, the median sales prices increased the most in the cities of: 1. Newark, New Jersey (18.2% increase in median sales prices) 2. Anaheim, California (18.1%) 3. West Palm Beach, Florida (15.2%) 4. Fort Lauderdale, Florida (15.1%) 5. Miami (11.7%) Metropolitan areas that saw the biggest decreases were Fort Worth, Texas (3.1% decrease); Austin, Texas (-1.7%); San Francisco (-1.1%); and Denver (-0.4%).