“Rates are one piece, but really, the affordability crisis has continued because home prices are still really high,” Hodgson told Mortgage Professional America. “They haven’t come down for the most part, and incomes haven’t moved up as much as well. Rates doubled in a very short period of time, which caused monthly payments to go up, but people’s income didn’t increase as much.”
One piece of good news lately has been an increase in housing inventory. However, some markets are still experiencing a shortage of available homes. Sometimes, it differs from one neighborhood to the next.
“We do a lot of business in Texas,” Hodgson said. “In some of our Texas markets, we’re definitely seeing inventories increasing. The spring and summer haven’t been as hot as maybe we expected. There are definitely different markets and sub-markets where buyers are getting relief with good price drops, or being able to negotiate seller credits in those sub-markets where homes are sitting on the market a little longer.
“Sometimes the home is on the market for three days, and it’s still a multiple offer situation, and the buyers have to overbid. And then other times you see a house on the market for three weeks, six weeks or nine weeks, and now suddenly, you’re getting a $20,000 or $30,000 price reduction and getting a great deal on it.”
Counting on wholesale lenders
To address some of the challenges in the mortgage market, companies are embracing new technologies, including artificial intelligence. In addition, the government has made recent changes that will allow cryptocurrency and a different credit scoring system, VantageScore 4.0, to be accepted in the mortgage process.