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MortgagePoint ยป Your Trusted Source for Mortgage Banking and Servicing News 44 January 2025 J O U R N A L month's rent, additional amenities, or a break from rent hikes. Homebuilding to Increase Due to Construction Regulations Though it may take a few years be- fore the surge in homebuilding makes purchasing a home noticeably cheaper, Redfin projects that more single-family houses will be built in 2025. Because of the newfound hope that regulatory burdens may be reduced, the Republi- can sweep of the White House, Senate, and House has increased builder confidence. Additionally, builders will rely on the fact that the lock-in impact of mortgage rates will limit the amount of existing inventory that can compete with new construction. The warning is that there are some obstacles for builders to overcome. First, interest rates are probably going to remain high. Second, since immi- grants account for almost 30% of the nation's construction workforce, the incoming administration has stated that it will reduce immigration, which is likely to result in fewer residential development. Redfin anticipates a small decrease in real estate commissions during the first full year of the new National Asso- ciation of Realtors (NAR) commission regulations. In competitive housing markets, where costs are frequently a subject of negotiation in a bidding war, this is particularly true for luxury hous- es, where brokers have the most leeway to lower their fees. How far the incoming administra- tion's antitrust enforcers will push for more reforms in the real estate sector is still up in the air. Although it's unclear if it would take any official action, the Department of Justice stated in a recent filing that it "continues to scrutinize policies and practices in the residential real estate industry that may stif le competition." The Federal Trade Commission will be more inclined to authorize mergers and acquisitions between big business- es under the incoming government. The U.S. real estate market has histori- cally been fragmented, with numerous brokerages and real estate search sites of all sizes and business models vying for agents and clients, in contrast to other sectors with a small number of dominating firms. We're likely to see more roll-ups of brokerages, lenders, and title businesses hoping to increase business from every client, even though it's not unusual for larger brokerages to have connected mortgage or title services. Individual Homes Will Be Priced to Ref lect Climate Risks In climate-risky areas, such as coastal Florida, wildfire-prone areas of California, and hurricane-prone areas of Texas, the likelihood of natural disasters will begin to drive down property prices or restrict price growth. The riskiness of each property will inevitably increase the knowl- edge of homebuyers and their agents. Due to their relative affordability and relative protection from climate-related calamities, the Midwest and Northeast will see an increase in the number of homebuyers. For many middle- and lower-class homeowners in Florida, Hurricanes Helene and Milton marked a sea change. Compared to the previous year, fewer out-of-town purchasers sought to relocate to Florida this fall, but more homebuyers sought to depart the state. Only the wealthy who can afford to rebuild or pay exorbitant insurance rates may be able to afford to reside in coastal Florida. The luxury market around Florida's coast is expected to remain robust, according to Redfin. Compared to higher-priced homes, lower-priced homes will increase in 2025, but not because more young Americans or members of the working class are becoming homeowners. Rath- er, older purchasers who are priced out of higher price tiers will buy inexpen- sive homes. In contrast, Gen Zers will continue to rent or live with family long into their 30s, choosing instead to accumulate money in other ways. LENDERS REPORTING INCREASED PROFITS VIA DIGITAL CLOSINGS S napdocs, a provider of digital mortgage closing solutions, in partnership with Falcon Capital Advisors, has released research show- ing that eClosing technology provides lenders with a pricing advantage of up to 10 basis points. The advantage stems from accelerated loan delivery to secondary and capital markets. On average, lenders utilizing eClos- ing platforms closed loans five days faster, securing this pricing benefit by delivering loans into an earlier month's mortgage-backed security. The study also found that digital closings generate a portfolio benefit of $115 to $283 per loan, attributed to increased efficiency and cost savings. Digital Closings Drive Significant Savings According to the study, the finan- cial benefits of eClosing technology extend beyond pricing gains in second- ary markets. Lenders reported reduced expenses in areas such as closing and funding processes, quality control, and document management. Additional savings were linked to lower shipping and custodian fees, fewer lost or dam- aged notes, reduced delays in investor delivery, and decreased warehouse line costs. Eric McCall, VP at First Home Mortgage, emphasized the impact of Snapdocs' eClosing technology on operational efficiency. "Increasing our hybrid and eNote adoption has accelerated delivery to our warehouse partners and investors by eliminating signing errors and stream- lining the process for our post-closing team," McCall said. "We're now able to deliver loans faster, which has led to savings for our bottom line. Snapdocs