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Today on Real Estate Backstage, purchase mortgage applications rise for the fourth week in a row … the November jobs report comes in strong … a District Court in Texas issues an injunction against the Corporate Transparency Act … appeals to the NAR settlement are rolling in … and Rocket Mortgage sues the Department of Housing and Urban Development.
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Purchase Mortgage Demand
According to the Mortgage Bankers Association:
“The Market Composite Index, a measure of mortgage loan application volume, increased 2.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 30 percent compared with the previous week. The Refinance Index decreased 1 percent from the previous week and was 7 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. ‘Mortgage rates fell to their lowest level in over a month last week, with the 30-year fixed rate decreasing to 6.69 percent,’ said Joel Kan, MBA’s Vice President and Deputy Chief Economist. ‘The recent strength in purchase activity continues, supported by lower rates and higher inventory levels, which are giving prospective buyers more options compared to earlier in the year. The purchase index increased for the fourth straight week to its highest level since January 2024.’ “
(Source: mba.org)
November Jobs Report
According to the Wall Street Journal:
“The labor market bounced back last month, as workers sidelined by storms got back on the job, and as thousands of striking Boeing employees returned to work. The U.S. added a seasonally adjusted 227,000 jobs in November, the Labor Department reported Friday, solid jobs growth that was roughly in line with expectations. Stock futures edged higher after the release. The unemployment rate, which is based on a separate survey from the job figures, and which tends to be less affected by weather and strike activity, rose to 4.2% from 4.1%. The October job count was depressed by Hurricanes Helene and Milton, which forced many businesses across the Southeast to temporarily close during the pay period the Labor Department based its job numbers on. The Boeing strike ended on Nov. 5—early enough for 33,000 returning workers to get counted in Friday’s report. Economists polled by The Wall Street Journal had expected Friday’s report to show a gain of 214,000 jobs last month. The November jobs figure provides something of a relief, confirming that October’s softening was the result of storm and strike-related distortions, rather than a more fundamental weakening. The general picture is that the labor market has slowed, but is still doing well. Despite the bounceback in jobs, Federal Reserve policymakers still appear likely to cut interest rates again when they meet later this month. That said, Friday’s report does make it easier for them to leave rates on hold if the Labor Department’s November inflation report, due out next Wednesday, comes in warmer than they would like.”
(Source: wsj.com)
In addition to more solid numbers in November, there were some positive revisions made to the September and October numbers as well. According to ConnectCRE:
“September was revised up by 32,000 to +255,000, and the change for October was revised up by 24,000 to +36,000. With these revisions, employment in September and October combined is 56,000 higher than previously reported.”
(Source: ConnectCRE.com)
Injunction Against The Corporate Transparency Act
According to an email from Matt Troiani, Senior Counsel and Director of Legal Affairs for the National Association of REALTORS®:
“On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction enjoining the federal government from enforcing the Corporate Transparency Act (CTA). This means the Financial Crimes Enforcement Network (FinCEN), as part of the Treasury Department, cannot currently enforce the Beneficial Ownership Information (BOI) Reporting Rule enacted pursuant to the CTA. The lawsuit asserted that the CTA is outside of Congress’ power to regulate under the Commerce Clause and is therefore unconstitutional. NAR is reviewing the court order. Litigation continues and it is possible the federal government will appeal the preliminary injunction. NAR recommends that members consult legal counsel for legal advice regarding compliance and the implications of the preliminary injunction on their businesses. As of this writing, FinCEN’s BOI Reporting entity remains open and is accepting BOI Reports, despite the preliminary injunction prohibiting FinCEN from implementing or enforcing the CTA and BOI Reporting Rule.”
Appeals To The NAR Settlement
According to Real Estate News:
“Just one day after U.S. District Court Judge Stephen Bough approved the $418 [million] settlement between home sellers and the National Association of Realtors in the Sitzer/Burnett case, an appeal was filed. Spring Way LLC and a group of objectors announced the appeal in a Nov. 27 filing, bumping the case up to the U.S. Court of Appeals Eighth Circuit. That court is also overseeing an appeal to the RE/MAX, Keller Williams and Anywhere settlements, which were approved by Judge Bough in May. Spring Way was originally the lead plaintiff in the Pennsylvania case now known as Moratis; the objectors are also involved in that case, a copycat commissions class action lawsuit filed in December 2023. On Dec. 2, four more appeals were filed. Monty March — a plaintiff in an early copycat lawsuit targeting the Real Estate Board of New York (REBNY) and a host of brokerage companies — appealed both the NAR settlement and the settlements approved Oct. 31 in the Gibson case that include Compass and Redfin. March had filed objections to the settlements prior to their approval. The other appeals filed Monday came from James Mullis, a plaintiff in the Batton homebuyer lawsuit. He previously appealed the May settlements with RE/MAX, KW and Anywhere, and he was an objector to the Gibson deals. Like March, he is appealing the NAR settlement and the deals approved by the nine brokerages in Gibson on Oct. 31. The filings continued to roll in on Dec. 3, with Robert Friedman appealing the Nov. 26 approval of both the NAR and HomeServices settlements as well as the approved Gibson settlements. Friedman filed his own case targeting REBNY last year, and he also filed objections to the recently approved deals … All of the newly filed appeals will go to the Eighth Circuit.”
(Source: RealEstateNews.com)
Rocket Mortgage Sues HUD
According to RISMedia:
“National mortgage lender Rocket Mortgage, a part of Rocket Companies, filed suit in Federal District Court Dec. 5 against the U.S. Department of Housing and Urban Development (HUD) to correct conflicts between the government’s regulations requiring appraiser independence and its enforcement actions seeking to hold lenders liable for the conduct of independent licensed appraisers. Rocket Mortgage also filed a motion to dismiss the claim the DOJ brought against the company based on the same regulatory conflicts and misapplication of applicable law. ‘It is unreasonable that the DOJ chose to sue Rocket Mortgage for the conduct of an independent appraiser,’ said Bill Emerson, president of Rocket Companies, in a release. ‘We will not stand idly by while the courts are used as venues to leverage our company’s name to publicize the case instead of pursuing justice against those who may have committed wrongdoing.’ … ‘It is notable that, in a case about the alleged actions of an independent appraiser that was contracted through an unaffiliated third party, Rocket Mortgage is listed first in the DOJ’s filing and is the only company mentioned by name in the headline of the government’s press release announcing the DOJ’s lawsuit,’ Emerson added. ‘We have always been guided by the fundamental principle that all homebuyers and homeowners should be treated fairly and should have every opportunity to achieve their dream of owning their own home or using their equity to improve their lives. Our long, exemplary track record of fair housing lending speaks for itself.’ … The accusation of discrimination is against the independent appraiser who performed the appraisal, not Rocket Mortgage, the company said. Despite this, Rocket alleges, the DOJ dragged Rocket Mortgage into a lawsuit based on the assertion that the company ‘had the authority to correct the discriminatory appraisal, or cause it to be corrected, but failed to do so.’ This is 100% false, the company claims. Rocket Mortgage had no ‘authority to correct’ the appraisal as a matter of law and the claims against the company should be immediately dismissed.”
(Source: RISMedia.com)
This is an interesting case. Appraisal Independence Requirments were first put in place by Fannie Mae back in October of 2010, in the aftermath of the 2008 financial crisis and subsequent Great Recession. This created strict rules for how lenders were to select and communicate with appraisers, and how to handle situations when an appraiser’s valuation is brought into question.
(Source: fanniemae.com)
Wildly Divergent Real Estate Markets
I found this article from Inman really interesting:
“Often, when a market experiences a major upswing in active inventory, it signals a market slowdown is underway. That’s not what’s been happening lately in the West Coast’s highest-dollar housing markets. Today, big cities in California and Washington state are experiencing an uncommon cocktail of factors that could signal better days are ahead for the real estate business in one of the most stagnant housing regions in the U.S. Inventory has recovered sharply even as pending sales have recovered faster than in most places … Nowhere is this more apparent than in San Diego. The greater metro area there has witnessed a 63 percent rise in inventory year-over-year — the highest in the nation. Despite this, half of homes in San Diego sell in 34 days or less, compared to 58 days or less nationwide. And while that timeline has been rising, it’s been rising slower than the rate seen in other major U.S. cities … This shift in inventory in these cities has also coincided not with falling prices as one might expect, but with surprisingly stable prices instead. And while a shift this strong might normally result in homes sitting for longer unsold, they remain on the market for less time than in most parts of the country … From a pure active-listings standpoint, Florida appears to have much in common with California. But the reality of their trajectories couldn’t be more different. Once a hotspot for the pandemic-era housing boom, Florida is undergoing one of the nation’s most severe — and longest-lasting — downturns, with no end yet in sight. Take the greater Miami area for starters. Like some of its counterparts on the West Coast, the Miami market has seen a 57 percent rise in for-sale inventory over the past year, among the highest in the nation. But half of homes in Miami are sitting on the market for at least 74 days before selling — more than twice as long as in San Diego. The list price per square foot was down 9 percent year over year in October in half of Miami homes for sale. That’s fundamentally unlike the 2 percent price gains observed nationally in that time, and well below the 1.7 percent rise that California listings have sustained through a similar inventory upswing. It’s not just Miami, either. Florida markets including Tampa, North Port, Fort Myers, Orlando and Jacksonville are all roughly in line with this picture, to varying degrees. In Florida, new listings have been falling fast — but sales have been falling faster. As a result, homes are sitting for longer and longer on the market, active inventory has ballooned, and prices are falling faster than almost anywhere in the country. Most U.S. housing markets hit bottom around a year ago. In Florida, the downturn is still in full swing … In most parts of the country, today’s business climate could not be more different from the early pandemic homebuying frenzy. But in pockets of the Northeast and Midwest, some of the key dynamics that characterized the pandemic boom have been upheld: particularly tight inventory, a seller-friendly imbalance and relatively stable home transaction levels. Nowhere in the country is this more apparent than in the major population centers of Connecticut. The state as a whole remains extremely supply-constrained, with active listings in October that were 57 percent below their levels from early 2020. Nationwide, inventory had actually risen by 3 percent over the same period. Connecticut in October saw 30 percent fewer new listings come online than it did in February of 2020. Nationwide, new listings were down only 12 percent in that time. Even amid this pronounced regional housing shortage, and despite an unfriendly rate environment in a relatively expensive region of the country, Connecticut has seen relatively high transaction levels. The result? A greatly imbalanced environment in which buyers outnumber sellers, and prices continue to surge. In other words, brokers and agents there are still living in an environment much like the rest of the country experienced during the pandemic boom.”
(Source: Inman.com)
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