Growth is rapid in two types of BTR: horizontal apartments and townhomes. Dallas, Orlando, Atlanta, Nashville, Tampa, Phoenix, Denver, and other markets are driving this trend.

Homebuyer affordability remained unchanged in July from June, according to Mortgage Bankers Association‘s (MBA) Purchase Applications Payment Index (PAPI). The index measures how new monthly mortgage payments vary across time, relative to income, drawing from data from MBA’s weekly applications survey.The national median payment applied for by purchase applicants was $2,162 in July, up $318 from a year prior but unchanged from June. Median earnings were up 3.7% compared to one year ago, but payments increased by 17.2%.The national median mortgage payment for FHA loan applicants was $1,854 in July, up from $1,824 in June and up from $1,461 in July 2022. The national median mortgage payment for conventional loan applicants was $2,197, down from $2,205 in June and up from $1,892 in July 2022.Credit: Mortgage Bankers Association“Prospective homebuyers continued to face challenging conditions in July, with elevated and volatile mortgage rates and low housing inventory serving as a formidable one-two punch that suppressed mortgage applications and sales activity,” Edward Seiler, an economist at the MBA, said in a statement.Considering that mortgage rates will most likely remain elevated until the end of the year, “affordability will remain a hurdle for many households looking to buy a home,” he added.An increase in MBA’s PAPI speaks to declining borrower affordability conditions. It means that the mortgage payment to income ratio (PIR) is higher due to increasing application loan amounts, rising mortgage rates, or a decrease in earnings. A decrease in the PAPI occurs when loan application amounts decrease, mortgage rates decrease, or earnings increase.The top five states with the highest PAPI were Idaho, Nevada, Arizona, California, and Florida. The top five states with the lowest PAPI were Connecticut, Louisiana, Alaska, West Virginia, and New York.Credit: Mortgage Bankers Association

Shares of Better Home & Finance Holding, the parent of digital lender Better.com, collapsed during its debut on Nasdaq Thursday. The company went public after merging with the special purpose acquisition company (SPAC) Aurora Acquisition Corp. the prior day.Better’s class A common stock, listed under the ticker “BETR,” declined to $1.15 at the closing on Thursday. They were down 93.4% from the previous close of $17.45 when the SPAC was still trading on the stock exchange.It took two years for Better to go public. According to Bloomberg News, the digital lender is among the 10 worst-performing companies that merged with SPACs this year. Why did it perform so poorly on day one? The deal with Aurora was announced in May 2021, when historically low-interest rates boosted a SPAC mania in the U.S. and created a refi boom for mortgage lenders like Better. At that time, the company was valued by its investors at $7.7 billion.But Better’s debut came at a low point in the mortgage market, with mortgage rates at their highest levels in more than two decades and historically low levels of home sales. That puts heavy pressure on its business. In addition, the SPAC mania has dried up amid increasing regulation. Since the deal announcement, Better’s employment count nosedived to 950 workers in June 2023 from 11,000 employees in 2020. Better dealt with the bad press after Vishal Garg, Better’s founder and CEO, laid off employees via Zoom in December 2020. The company posted a loss of $89.9 million in the first quarter of 2023; a far cry from the $500 million in income it realized in 2020, when most mortgage lenders posted historic profits. Still, Garg managed to keep SoftBank and Novator Capital committed to investing in the company. The deal with Aurora will unlock $565 million of fresh capital for an unprofitable business.The capital infusion includes a $528 million convertible note from affiliates of SoftBank and additional common equity from funds affiliated with NaMa Capital (formerly Novator Capital). According to SEC filings, on August 21, the parties agreed that SoftBank’s purchase of $650 million in Better’s convertible promissory notes would be reduced by any amount received from the trust account of Aurora at closing and any amount of the $100 million commitment by Novator. The agreement reduced SoftBank’s maximum commitment to $550 million.In an interview with HousingWire, Garg said the company has shifted its strategy ahead of its IPO—Better plans to be a mortgage marketplace that sells its technology platform to other companies. “Our overall model has changed from being a one-stop-shop, where we do everything in-house, to being a one-stop-shop where we do the things in-house that we’re the best at,” Garg said in an interview. “For things like homeowner’s insurance, title insurance, and realtors, we’ve now just become a marketplace. We match the consumer to the product with a partner capable of delivering the best product to them.”Since 95% of Aurora shareholders redeemed their shares, there was a small amount of publicly available shares, which contributed to the volatility on Thursday, Reuters reported.

Strong consumption data combined with slowing inflation points to a “soft landing” for the economy, Fannie Mae‘s Economic and Strategic Research (ESR) Group said Thursday. But the government sponsored enterprise still expects a recession next year.“In order to achieve a soft landing, economic growth will have to slow to a rate that is below trend for some time in order for the unemployment rate to rise sufficiently to cause wage growth to slow consistent with a 2% inflation target over the long term, but not so slow that the economy falls into a contraction,” the ESR group said. Retail sales rose 0.7% in July from the prior month, a faster pace than the previous month’s upwardly revised 0.3% gain. CPI rose 0.2% both in July and June from the previous month and 3.2% and 3% respectively from a year ago.Wage growth also likely remains too high to be consistent with 2% inflation over the long run, which the ESR Group believes will keep monetary policy tight. Fannie Mae maintains its baseline call for a recession to occur – forecasting it to begin in the first half of 2024. In its July ESR note, Fannie Mae projected a modest recession beginning in Q4 2023 or Q1 2024.The group upgraded its 2023 real GDP growth outlook to 1.9% from 1.1% on a Q4/Q4 basis and revised its 2024 GDP growth prediction to a 0.2% decline from 0.1% previously, reflecting a recession hitting later than was initially anticipated. Subdued home sales Regardless of whether a soft landing is achieved over the coming year, Fannie Mae expects existing home sales to stay subdued and within a tight range.“​​With an ongoing tight supply of existing homes for sale and the recent rise in the 30-year fixed-rate mortgage rate to around 7%, we expect home sales in 2023 to remain near the lowest annual level since 2009,” the group said. Total existing home sales fell 2.2% in July from June to a seasonally adjusted annual rate of 4.07 million. Year-over-year, sales slumped 16.6% down from 4.88 million in July 2022, according to the National Association of Realtors.“If a recession is avoided, then ongoing limited supply of homes for sale on the market combined with continued affordability constraints and the ongoing ‘lock-in’ effect, whereby existing owners do not want to give up their current low mortgage rates, is expected to lead to a low pace of sales,” according to the ESR group.Rising mortgage rates will also exert more downward pressure on sales. However, given the already very low pace of sales, the majority of highly interest-rate-sensitive borrowers are already on the sidelines and current sales activity is being supported by less rate-sensitive buyers, Fannie Mae said.In the case of a recession scenario, interest rates would likely pull back somewhat, lessening the lock-in effect thereby potentially boosting the number of homes available for sale. However, in a recession, a weaker labor market, tighter credit, and lower consumer confidence would act as downward pressure on housing, Fannie Mae noted. In contrast, new home sales and construction, while choppy in recent months, have generally been on an upswing.Single-family housing starts jumped in July by 6.7% to a pace of 983,000 annualized units. This was 9.5% higher than a year prior, the first annual increase since April 2022.However, based on permits being substantially lower at 930,000, Fannie Mae expects some pull-back in the near term, especially given the recent rise in mortgage rates. Fanie Mae expects a modest pullback in construction due to a slowing economy, though a similar outcome may occur if instead a soft landing is accompanied by higher for longer mortgage rates leading to slower housing construction and sales. “In fact, somewhat softer housing construction and sales may be needed to make a soft landing possible,” according to the ESR group. Mortgage originations forecast little changedThe forecast for purchase origination volume in 2023 is largely unchanged at $1.3 trillion. For 2024, the ESR group revised upward its forecast of purchase mortgage originations volumes by $25 billion to $1.5 trillion, consistent with upward revisions to the home sales forecast.Refinance volumes are expected to be $261 billion in 2023 and $456 billion in 2024, representing downgrades of $4 billion and $9 billion, respectively, from the July projections. 

Soaring mortgage rates are taking a major chunk out of homebuyers’ budgets, according to a new report from Redfin.A homebuyer on a $3,000 monthly budget, for example, could afford a $429,000 home with a 7.4% mortgage rate, using rate data from August 23. That buyer lost $71,000 in purchasing power compared to one year ago when a $500,000 home would have been accessible to them with an average rate of about 5.5%. The daily average mortgage rate of 7.36% on August 23 is close to its highest level in over 20 years, with the average monthly mortgage payment is around $2,700 today, $400 higher than at the same point in August of 2022.“The combination of high monthly mortgage payments and historically low housing inventory has pushed many would-be homebuyers out of the market,” the report said. Home-purchase applications dropped to their lowest level in nearly 30 years during the week ending August 18, and Redfin’s Homebuyer Demand Index—a measure of requests for home tours and other buying services from Redfin agents—was down 7% year over year.Demand levels vary by region. Agents say cash-strapped buyers are negotiating hard to get deals in this environment. But in Tennessee, as with other high-demand areas, there’s a limit to how low buyers can go.“Some buyers are hoping they can get a home for under asking price to make up for high interest rates because they’re hearing the housing market is slow, but what’s happening nationally isn’t necessarily true here,” said Kristin Sanchez, a Redfin agent based in Smyrna, Tenn. Tennessee, a hot spot for people relocating from other states, boasts a healthy job market that’s fueling strong demand, Sanchez said. As a result, homes are typically selling at or above asking price with two to three offers, she added.Mortgage-purchase applications during the week ending August 18 also saw a decline of 5% from the prior week, on a seasonally adjusted basis. Home-purchase applications dropped to their lowest level since 1995, while purchase applications were down 30% from the same point last year.

As the frequency and severity of extreme weather events continue to rise, it’s more critical than ever that owners develop proactive, resilient emergency strategies.

Mortgage rate shot up again last week as the bond market continues to grapple with a growing economy in the run up to the next Federal Open Market Committee meeting. Investors are concerned that the central bank will continue raising the funds rate, pushing borrowing costs even higher. For many, there is worry that the Fed may overtighten on the monetary front and lead to economic damage,” said George Ratiu, chief economist at Keeping Current Matters.Freddie Mac‘s Primary Mortgage Market Survey, which focuses on conventional and conforming loans with a 20% down payment, shows the 30-year fixed rate averaged 7.23% as of August 24, up from last week’s 7.09%. By contrast, the 30-year fixed-rate mortgage was at 5.55% a year ago at this time.“This week, the 30-year fixed-rate mortgage reached its highest level since 2001 and indications of ongoing economic strength will likely continue to keep upward pressure on rates in the short-term,” said Sam Khater, Freddie Mac’s chief economist.Other indices showed even higher mortgage rates.HousingWire’s Mortgage Rates Center showed Optimal Blue’s 30-year fixed rate for conventional loans at 7.22% on Wednesday, compared to 7.18% the previous week. At Mortgage News Daily on Wednesday, the 30-year fixed rate for conventional loans was 7.36%, up 2 basis points from the previous week.What does it mean for the housing market ?Higher borrowing costs are part of today’s overall consumer experience: interest rates on credit cards, auto and personal loans, as well as mortgages, are higher. A strong economy still supports rising wages, allowing many households to mitigate the financial pressures.However, persistently high mortgage rates pose a significant affordability challenge to buyers and sellers (not to mention the workers of a trillion dollar-plus industry). People adapt to the higher costs using different strategies, observed Ratiu. Some are leveraging high home equity levels, others downsize their budgets or ask their family for cash assistance. In July, 26% of existing homes sold to cash buyers while 7% of new homes sold to cash buyers. For a majority of people, buying a home still means borrowing money. At today’s rate, the monthly cost to purchase a home totals about $2,400, not including property taxes and insurance, a 17% increase from a year ago.Home sales have been tracking below last year’s levels and are also more than 20% below 2019 totals, noted Bright MLS Chief Economist Lisa Sturtevant. Higher mortgage rates probably signal “a further contraction in home sales activity,” she added. “We could see monthly sales fall to 2010 or 2011 levels when the market was recovering from the free fall after the housing bubble.”However, the big difference between the financial crisis of 2008 is that the current higher-rate environment is not sending home prices down, and other factors have kept inventory close to historic lows. Therefore, sales activity will probably continue to slow in the fall but home prices should decrease only modestly and not homogeneously across all markets. The combination of high prices and high rates makes single family residential an unattractive investment option currently, said Charles Clinton, CEO at commercial real etate investment platform EquityMultiple. “This is exacerbated for investors pursuing short term rental strategies, where Airbnb hosts have seen a drop in average revenue,” he added.What to expect with the Fed ?When the Fed halted its rate hikes last June, many investors were hopeful that the Central Bank was close to declaring victory. Forecasts were for mortgage rates to begin to decline, perhaps falling to 6% by the end of the year. Now, however, as inflation ticked up, the labor market is still strong and bond yields are rising amidst economic uncertainty, optimism starts to wane.“Instead of talking about rates falling to 6% this year, the question is how much above 7% are we going to go?” said Sturtevant.However, the MBA still expects mortgage rates to fall off recent highs later this year. If that were true, it could bring some buyers back into the market, MBA President and CEO Bob Broeksmit said in a statement. Next week’s reading of the Personal Consumptions Expenditures Price Index will be another strong influence on the Fed’s decision in September.  Additionally, former Federal Reserve Bank of St. Louis President James Bullard told Bloomberg Television that a pickup in economic activity this summer could delay plans for the Fed to wrap up interest-rate increases.

Collaboration across stakeholders in housing fosters creativity, bold ideas and momentum to bring them to scale.

Now that Covid has reordered priorities for those able to work offsite, developers of luxury residential buildings are placing greater emphasis on high-end coworking spaces blending form and function.

Rapattoni, the multiple listings service software provider that was crippled in a cyber attack earlier this month, is back online in multiple markets. Service is expected to be restored to all of Rapattoni’s clients by the end of the day, sources told HousingWire. The outage, which has disrupted agents’ workflow since the attack on Aug. 9, impacted an estimated 5% of agents across the country. The cyber attack left real estate agents unable to add or remove listings, update statuses or access key information about other members. Emails and phone calls to Rapattoni, which powered MLSs in 12 markets, were not returned Wednesday.The MLS of the San Francisco Association of Realtors has been up and running since 9 a.m. this morning, said Walt Baczkowski, CEO of SFAR.The Lynchburg Association of Realtors told members that core services were restored on Tuesday, though not all features had been back online. Service was also restored for real estate agents in Indiana and Cincinnati as well, sources said.Rapattoni’s services provide agents with a single sign-on portal, granting access to tools such as ShowingTime, Cloud CMA and iMapp. During the outage, agents, MLSs and brokerages came up with solutions to weather the storm. Last Friday, eXp Realty rolled out a solution in collaboration with Northstar, one of the nation’s largest MLSs, to get its listings online. The company was able to help its 4,000 agents that were impacted by the attack. The Multiple Listing Service of Greater Cincinnati (Cincymls), for example, already announced in a Facebook post that it had selected another vendor, Perchwell, for its MLS services, and would be using Rapattoni for reading purposes only. However, Cincymls had started to look into Perchwell long before the cyberattack, association leaders said. The MLS of the San Francisco Association of Realtors started working with Zenlist, which is helping them put together a mobile app. Other sources said that they were looking into Corelogic‘s Matrix MLS.

Builders are taking advantage of the housing market inventory issues, which is why new home sales are growing yearly, even with higher mortgage rates. Today, the U.S. Census and Department of Housing and Urban Development reported that new home sales grew faster than anticipated as the builders who are efficient are finding ways to sell homes in this higher mortgage rate environment.      I often use the term efficient home sellers to describe the home builders in this low inventory environment. What do I mean by efficient home sellers? Builders sell their homes as a commodity, unlike existing homeowners. Because of that, builders now have excess profit margins to use post-COVID-19, and they use it to make deals to move homes. Not all the homes being sold have price cuts or rate buy-downs. However, when the builders need to move product, they will not hesitate to make these deals happen, whereas an existing homeowner might not.New home salesAccording to the recent Census report, “Sales of new single‐family houses in July 2023 were at a seasonally adjusted annual rate of 714,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.4% (±12.8%) above the revised June rate of 684,000 and 31.5% (±16.3%) above the July 2022 estimate of 543,000.”As we can see in the chart below, new home sales are growing, even with the negative revisions we have seen in the report. While existing home sales are still negative year over year, new home sales are growing year over year. While new home sales market is small compared to the existing home sales market; their buyers are older and make more money.New Home SupplyNew home supply is a more complicated matter. There needs to be more clarity on how many active listings this sector can supply in the U.S. Currently, we have 75,000 new homes ready for sale. We are almost back to pre-Covid-19 levels. One thing to remember with the chart below is that even in the worst period of the biggest housing supply crash in history, the new home completed supply stayed below 200,000. This isn’t the area to look for significant new inventory for sale, folks — it never has been. Most of the active units of supply in scale will have to come from the existing home sales market.According to the new home sales report, “The seasonally‐adjusted estimate of new houses for sale at the end of July was 437,000. This represents a supply of 7.3 months at the current sales rate.”Here’s my model for understanding the builders:When supply is 4.3 months and below, this is an excellent market for builders.When supply is 4.4-6.4 months, this is just an OK market for builders. They will build as long as new home sales are growing.When supply is over 6.5 months, the builders will pause construction. As we can see in the chart below, we have made significant progress in bringing the supply down for the builders, which is suitable for housing permits in the future. However, we aren’t below 6.5 monthly on the three-month average yet.Another topic that needs more clarification is analyzing the monthly supply data. Breaking down this data (7.3 months) into different categories is vital:1.3 months of the supply are homes completed and ready for sale — about 75,000 homes.4.3 months of the supply are homes that are still under construction — about 254,000 homes1.8 months of the supply are homes that haven’t been started yet — about 108,000 homesThe homes that haven’t been started yet are at an all-time high, and the builder’s confidence has fallen a bit lately, so don’t look for a rush to build until they have a better idea of whether they can sell these homes once they’re complete.As we can see with today’s new home sales report, it’s a different world for the builders than for existing homeowners who want to sell and move to another home. The affordability hit for homeowners is real, so the total cost to move has taken a bit out of demand because prices and rates rose so much together. This is the biggest reason new listings data has been trending at the lowest levels ever. However, the builders, for now, have been able to manage these higher rates more efficiently. 

The Federal Reserve System this week fined Birmingham, Ala.-based Regions Bank $2.95 million for “unsafe and unsound practices in its flood insurance compliance program and for flood insurance regulatory violations,” according to the Fed.The Board fined Regions “for its failure to effectively monitor a portfolio of home equity loans for compliance with flood insurance regulations due to changes in loan servicing platforms and third-party service providers,” noting that the bank had a pattern of individual violations of flood insurance regulations.Violations of the Flood Act require civil penalties of up to $2,000 per violation, according to the order released by the Federal Reserve Board of Governors.Over a period of more than one year, Regions “did not effectively monitor a significant number of home equity loans and home equity lines of credit subject to the Flood Act for compliance with Regulation H,” the Fed said in its action.Regulation H permits a state member bank to “make public welfare investments for the purpose of investing in, developing, rehabilitating, managing, selling, or renting residential property, provided that a majority of the units will be occupied by [low and middle income] persons,” according to the Fed.A bank spokesperson told HousingWire the issue was self-identified by Regions several years ago. “We took corrective action and remediated the issue by 2017. There was no customer impact as the matter was confined to our own internal monitoring of flood insurance policies on certain properties,” the spokesperson said. “Today, years after correcting the issue, we are pleased to now fully resolve this legacy matter.”

There’s no denying that this market will last for longer than a year. It’s time to take control of your business and plan for your future. We caught up with Emily Kettenburg, a seasoned coach with Tom Ferry, at the Tom Ferry Success Summit in Dallas where she shared her insights on the current trends and challenges in the real estate brokerage world.One of the most pressing issues is the shrinking property market. “This year, 20% fewer properties will trade,” Emily notes. This means that the competition is fiercer than ever. To counteract this, brokers need to focus on two main strategies: increasing per-person productivity (PPP) and recruiting more agents. Both good business practices in any market.However, the challenge lies in finding agents who can and will produce. “Unfortunately, we’ve got that 80-20 rule. So many agents are out of business in the first five years,” Emily laments.The solution? A robust onboarding process. “Their 30-day, 60-day, 90-day new agent training super important,” she says. This is especially crucial for agents who entered the industry during the Covid era, as they might not have had the same rigorous training as their predecessors.Building a recruiting roadmapBut recruiting isn’t just about onboarding. It’s about understanding the needs and desires of potential recruits. Emily suggests a “recruiting roadmap,” that starts with understanding the company’s mission, vision, and core values. “What are you hiring to?” she asks. This roadmap also involves a gap analysis, identifying lead sources for recruiting, and refining the interview process.Data and the recruiting processEmily also touches on the importance of data in the recruitment process. “Create that avatar of who your perfect agents are… and then lean into that,” she advises. By understanding the specific attributes and needs of potential recruits, brokers can tailor their approach to be more effective. Emily recommends creating five different personas or avatars based on production numbers, years in the business, personality traits, geographic area and even community involvement. “When I first started recruiting, I looked at the agents that I had and what markets they served. Then, I asked, what market would we like to serve or grow market share?,” she says. But, in some cases, she notes, “in my small town in New Jersey, it was someone who volunteered for an organization that we didn’t have anyone that volunteered with. As an example, in Trenton hire, I had no agents who volunteered at Homefront. Homefront was an organization near and dear to my heart,” she said. So, she found an agent who was very active volunteering for the organization. And that agent brought with him an entire database of others who volunteer.”Relationships are at the heartWhile data is important, nothing replaces the human touch remains crucial. “Real estate’s a relationship business built on trust,” Emily reminds us. This means that brokers need to be proactive in building and maintaining relationships with potential recruits. Whether it’s grabbing a coffee or hosting seminars, the key is to provide value and build trust. And, she notes that brokers must know who they are recruiting. She remembers a time when she was getting a weekly call from a broker who wanted to recruit her, but when she met that broker in person, he didn’t know who she was. “The broker didn’t do his homework, which should, as the very least, mean you’ve looked at a picture of the agent,” she says.On the topic of technology, Emily believes that artificial intelligence (AI) is a tool that brokers should be embracing. “If they’re not embracing AI, they’re missing the boat,” she states. AI can help brokers refine their marketing strategies, improve their communication with agents, and even aid in the recruitment process.The world of real estate brokerage is undergoing significant changes. However, with the right strategies and tools, brokers can navigate these challenges and come out on top. As Emily aptly puts it, “We need to make sure that we’re building a culture where people want to come, and that people want to stay, and we want them to be successful.”

A coalition of 27 Republican state attorneys general led by Patrick Morrisey of West Virginia was denied the option to join oral arguments against the Consumer Financial Protection Bureau (CFPB) by the U.S. Supreme Court in a case that will decide the constitutionality of its funding source, and which could decide the fate of the Bureau itself.According to an unsigned order on Monday (as reported by Bloomberg Law), the high court declined a motion that would have allowed for the attorneys general to challenge the Bureau’s funding mechanism on grounds that it violates the Constitution’s separation of powers in the Consumer Financial Protection Bureau v. Community Financial Services Association case.In their petition, the AG coalition argued that it would make a case surrounding a “special understanding of how an unbounded CFPB can damage the consumer-financial markets—and impair the States’ own abilities to regulate those markets,” according to the reporting.The high court was unmoved, issuing its unsigned order on Monday. The ask by the AGs was unlikely to be granted, since the Supreme Court rarely admits such petitions.Joining West Virginia in the effort included the attorneys general for Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia and Wyoming.Oral arguments in the case are currently scheduled to take place on Oct. 3, though a final decision is not expected until sometime in 2024. Recently, certain CFPB enforcement actions have been held up pending the constitutionality decision.

Rep. Maxine Waters, the ranking member of the House Committee on Financial Services, is concerned about the Federal Trade Commission settlement agreement that will allow Intercontinental Exchange Inc. (ICE) and  Black Knight to merge.“In addition to potentially creating a housing finance conglomerate that would dwarf all other players in the industry, I remain concerned that this merger has the potential to harm consumers by displacing competing products and businesses that help mitigate rising loan origination and servicing costs, thereby pushing the dream of homeownership further out of reach for families across the country,” Waters wrote in a letter to FTC Commissioner Lina Kahn.The FTC sued ICE to block the merger with Black Knight in March saying it would stifle innovation and reduce lenders’ choices, ultimately raising costs for lenders and homebuyers.Following Black Knight’s agreement to divest and sell its Empower loan origination system (LOS) and Optimal Blue product pricing engine (PPE) to Canadian company Constellation Software Inc. to mitigate antitrust concerns, the FTC, ICE and Black Knight jointly stipulated to dismiss a federal court case, clearing a major regulatory hurdle that should allow the deal to go through.With the parties planning to come to mutually acceptable terms by August 25, Waters asked the FTC to consider three areas of protection safeguards – community benefits, antitrust protections and financial stability – as the agency negotiates any agreement with ICE and Black Knight. The housing market already faces serious consolidation and affordability concerns, the FTC should ensure the deal would avoid additional pricing pressures, Waters argued. “There is no doubt that the combined technology services business of ICE and Black Knight’s, even with planned divestitures, will affect the pricing of mortgage loans and mortgage servicing rights in profound ways.”The FTC should make it mandatory for ICE and Black Knight to establish an advisory board to review how the company is meeting its obligations pursuant to the Agreement Containing Consent Order (ACCO) – including steps the company can take to benefit the public, especially underserved borrowers and borrowers of color, Waters said.The agency should “require the ICE-Black Knight conglomerate to engage in technical assistance, partnerships, and other activities to support smaller industry players, especially diverse and mission-driven community lenders like community development financial institutions (CDFIs) and minority depository institutions (MDIs) who are effective in reaching and serving borrowers of color and other underserved borrowers.”Waters also noted ICE and Black Knight should be prohibited from “shackling” Constellation with non-compete clauses and other contractual provisions that would limit them from integrating or merging with other third parties in the mortgage technology market.Divestitures of Empower and Optimal Blue should lead to greater competition in the market, not outsized competitive advantages for the newly merged ICE-Black Knight, Waters said. “The FTC must account for how products are bundled and sold in the market and ensure that Black Knight’s sale of Empower and Optimal Blue includes all products that are necessary to keep Constellation Software Inc. fully independent and competitive.”Waters also called on the FTC to conduct a short and long-term review to assess its effects and determine whether the acquisition resulted in harm to consumers, unfair or deceptive acts.“The ACCO and divestiture should be monitored over a long period of time (i.e. 10 years) to ensure the behavior of the merging parties is consistent with the terms of the deal and a competitive marketplace and allow the deal to be reopened if any terms of the deal are violated,” the letter read.Analysts at Keefe, Bruyette & Woods expect the FTC to settle on the merger deal with ICE and Black Knight.ICE and Black Knight’s agreement to sell its Optimal Blue business leaves the FTC with a weak case as it remedies the remaining horizontal overlap cited in the FTC’s complaint with a competitive buyer, Ryan Tomasello, managing director of KBW, said in the note published in July. The agency also lost several other high-profile antitrust cases in recent months.

Vlad Stojanovic, formerly of Compass, is joining the Beverly Hills office of Christie’s International Real Estate, the company announced Wednesday. The 15-year industry veteran is known for his connections to the tech and private equity sectors and boasts a track record of noteworthy transactions. Over the past two years, properties he’s sold ranged in price from $1 million to $35 million, according to Realtor.com.Among his transactions, Stojanovic successfully closed high-end condominiums, luxurious apartment buildings and luxury homes. Stojanovic’s transactions included: 29060 Cliffside Drive, which sold for $35 million; 1148 Napoli Drive, which fetched $20 million; 535 Ocean Ave, which commanded $15.7 million; and 225 North Bristol Avenue, which sold for $12.8 million. The realtor ranked 23rd in the 2023 RealTrends ranking with $64,770,044 in sales volume, making him one of the the top agents in Los Angeles. He amassed $600 million over the course of his career.“I am thrilled to be joining Christie’s International Real Estate, an organization that epitomizes excellence and has consistently delivered exceptional results in the luxury real estate market,” Stojanovic said in a statement. Aaron Kirman, founder and CEO of Christie’s, highlighted Stojanovic’s talent for “expediting property transformations.” Owing to his family office connections, Stojanovic “unlocks the doors to the world’s most exclusive properties,” the company said. 

After a slump in June, the sales pace of new homes picked up month over month in July, according to data published on Wednesday by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). In July, the sales pace of new homes climbed 4.4% compared to June, reaching a seasonally adjusted annual rate of 714,000. On a year-over-year basis, new home sales were up 31.5%.This aligns with mortgage application data for new builds, which showed demand up 35.5% year-over-year in July and up  0.2% from June.Building activity continues to be buoyed by a strong and steady demand, but there could be a shift underway in the housing market, warns Bright MLS Chief Economist Lisa Sturtevant. Two factors are at play here: high mortgage rates, which, currently around 7.5% are likely to price out many prospective homebuyers this fall, and inventory, which is beginning to tick up in many markets. However, the rate of supply for new homes still surpasses that of existing homes. “Although there is just 3.3 months of supply of existing homes, that level has been increasing for the past few months. For new homes, there is 7.3 months of supply,” detailed Sturtevant.The seasonally‐adjusted estimate of new houses for sale at the end of July was 437,000. At the current sales pace this inventory represents 7.3 months of supply, which is a decline from the 7.4 months of supply recorded in June and 2.8 months below July 2022.Regional breakdownIn the Midwest and West regions, transactions saw double-digit monthly gains. The pace of sales jumped 31.5% above the same month in 2022. In fact, all regions of the country posted double-digit improvements from a year ago. Southern metros saw a majority of newly built homes this year, as many people migrated towards the region, noted George Ratiu, chief economist at Keeping Current Matters. At the same time, the Northeast region also experienced a noticeable pickup in activity. Mid-sized markets that offer proximity to major employment centers and relative affordability saw strong demand.Homebuilders are making new homes more affordableAs the sales pace picked up month over month, the median sales price of new homes also ticked up in July, climbing $21,300 to $436,700. It was up 4.8% from June, but down 8.7% from last July. Still, it was the largest monthly increase since September 2022. The average sales price was $513,000.  New home prices have been declining year-over-year for the past four months, smoothing the affordability crisis, noted Sturtevant. In fact, in July 2023, 40% of new houses were sold for less than $400,000. A year earlier, 33% cost less than $400,000, remarked Holden Lewis, home expert at NerdWallet.“Some home builders have edged prices down slightly, but builders also are increasingly offering concessions, builder financing, or upgrades to help entice buyers,” Sturtevant added. While prices are marginally declining, economists also noticed that smaller homes were coming to market this year in response to shrinking affordability. According to Ratiu, that trend should continue for the balance of the year.Can this strong builders’ activity last ? In August, the homebuilder confidence index declined for the first time in 2023, signaling headwinds looming in the sector. “In the near term, a lull in demand brought on by 7% mortgage rates could mean that builders will see less traffic and more empty model homes in the latter half of 2023,” said Sturtevant.Doug Duncan, chief economist at Fannie Mae, said the new home sales report was in line with expectations. But mortgage rates are the X factor. “Given that mortgage rates have again risen above 7 percent, we believe the risk to new home sales is to the downside. Of course, this may be partially offset as a rise in completed inventories may lead builders to offer more generous concessions to bolster demand.”

New York-based digital lender Better.com  announced Wednesday the closing of its business combination with the special purpose acquisition company (SPAC) Aurora Acquisition Corp,, ending a two-year journey to make the business public. Better HoldCo, Inc. and Aurora are creating Better Home & Finance Holding Company, which will have Class A common stock listed on the Nasdaq under the ticker “BETR” starting Thursday. The deal will unlock $565 million of fresh capital for an unprofitable company. (Better.com incurred an $89.9 million loss in the first quarter of 2023, per Securities and Exchange Commission (SEC) filings.)The capital infusion includes a $528 million convertible note from affiliates of SoftBank and additional common equity from funds affiliated with NaMa Capital (formerly Novator Capital). Vishal Garg, Better.com’s CEO and founder, said in a statement that Better.com’s “journey is far from complete,” and the company will “continue pushing the boundaries of innovation in homeownership for our customers and shareholders.” Garg will be a director at Better Home & Finance, the same position as Prabhu Narasimhan and Arnaud Massenet, managing partners of NaMa Capital. Meanwhile, Harit Talwar will be the chairman of the board of directors at Better Home & Finance. “Over the past two years, Aurora has worked to deliver over $1.3 billion to Better’s balance sheet,” Massenet said in a statement. Since the deal announcement, Better’s employment count dropped from 11,000 employees in 2020 to 950 workers as of June 2023. Better faced the deterioration of the mortgage market due to surging rates. It also dealt with the bad press after Garg laid off employees via Zoom in December 2020. In an interview with HousingWire, Garg said the company has shifted its strategy ahead of its IPO. Better plans to be a mortgage marketplace that sells its technology platform to other companies. “Our overall model has changed from being a one-stop-shop, where we do everything in-house, to being a one-stop-shop where we do the things in-house that we’re the best at,” Garg said. “For things like homeowner’s insurance, title insurance, and realtors, we’ve now just become a marketplace. We match the consumer to the product with a partner capable of delivering the best product to them.”Better partnered with Palantir to create the proprietary loan platform Tinman Marketplace in August 2022.In January 2023, Better announced a One-Day Mortgage. The product allows customers to go online, get pre-approved, lock their rate and get a binding mortgage commitment letter from Better Mortgage within 24 hours.Better claims that it funded more than $100 billion in mortgage volume in six years since launch. 

Find out how the San Diego housing market is doing in 2023 and if there are any signs of a potential crash.