“The massive drop in sales and the sector more broadly has led to some experts calling it a ‘housing recession.’ ”Ĭonsequently, buyers are fleeing the market. In July 2022, with a rate of 5.41%, and that median price rising to $403,800, the annual income needed for someone to afford a home would be $115,000. Back in April 2021 when rates were at 3%, the annual income needed to buy a home at median price at $340,700 was $79,600, researchers at the Harvard Joint Center for Housing Studies said on Friday. “The monthly mortgage payment has increased about 60% compared to a year ago,” Nadia Evangelou, senior economist and director of forecasting at the NAR, said in a statement.įor the buyer, affordability has seriously worsened. Mortgage demand is down by nearly 30% from the same time last year. When rates went back up to 2008 levels, these non-bank lenders were stuck. And unlike banks that fund loans with their own customers’ deposits, non-banks borrow money from capital markets to offer mortgages to borrowers. Unlike traditional banks, customers can’t open checking or savings accounts at a non-bank lender. Rocket and its non-bank peers have a sizable share of the market, at about two-thirds of mortgages, Inside Mortgage Finance said. Plano-based First Guaranty Mortgage Corp filed for Chapter 11 bankruptcy. Some smaller outfits have even shut down fully, like Reali, a real-estate tech startup, and Sprout Mortgage. Many lenders are laying off staff, from banks like Citi C,Īnd startups like Better.
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