DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1518663
April 2024 » thefivestar.com 57 April 2024 J O U R N A L loan in the third quarter of 2023. From the fourth quarter of 2008 to last quar- ter, loan production expenses have averaged $7,389 per loan. » Median productivity—measured as loans closed per retail/consumer direct production employee—decreased to 1.1 loans per employee in the fourth quarter, down from 1.3 loans per em- ployee in the third quarter. » Servicing net financial income for the fourth quarter (without annualizing) was a negative $24 per loan, down from a positive $90 per loan in the third quarter. Servicing operating income, which excludes MSR amor- tization, gains/loss in the valuation of servicing rights net of hedging gains/ losses, and gains/losses on the bulk sale of MSRs, was $108 per loan in the fourth quarter, up from $104 per loan in the third quarter. HOMEBUYER VS. HOMEBUYER AS COMPETITION HEATS UP T he Mortgage Bankers Associa- tion (MBA) Builder Application Survey (BAS) data for Febru- ary 2024 indicates that the number of mortgage applications for the purchase of new homes rose by an estimated 15.7% over the previous year. In January 2024, there was a 1% rise in applications. This comes after mortgage applications for new home purchases in January jumped 19.1% compared to a year ago. "New home purchase activity in February was slightly hampered by the rise in mortgage rates over the month. However, homebuyers kept up their demand despite how competitive the purchase market still is, driving the level of applications to 16% ahead of last year's pace," said Joel Kan, MBA's VP and Deputy Chief Economist. "The average loan size increased to its highest level since March 2023 at almost $406,000, but it was still below the record high in MBA's survey of more than $436,000 in April 2022. The FHA share of purchase applications, which provides a read on first-time homebuyer activity, increased to 25.7%, indicating that first-time buyers continue to turn to new homes due to the lack of affordable existing home options. The estimated sales pace of new home sales was 689,000 units, a slight decline from the previous month." According to the MBA, seasonally adjusted annual new single-family house sales were running at a rate of 689,000 units in February 2024. New single-fam- ily home sales have historically been a leading indication of the U.S. Census Bu- reau's New Residential Sales report. The BAS' mortgage application data is used to estimate new house sales, together with several characteristics and market coverage assumptions. Seasonally adjusted estimates for Feb- ruary show a 1.6% decline from the 700,000 units rate in January. MBA projects that, on an unadjusted basis, there were 62,000 sales of new homes in February 2024, down 1.6% from 63,000 sales in January. Conventional loans accounted for 63.9% of loan applications by product type, followed by FHA loans (25.7%), RHS/USDA loans (0.3%), and VA loans (10.1%). In January and February, the av- erage loan amount for newly constructed residences was $401,282 and $405,719, respectively. "New home purchase activity in February was slightly hampered by the rise in mortgage rates over the month. However, homebuyers kept up their demand despite how competitive the purchase market still is, driving the level of applications to 16% ahead of last year's pace." —Joel Kan, VP and Deputy Chief Economist, MBA