The Consumer Financial Protection Bureau and the Justice Department issued letters to mortgage servicers and housing providers reminding them that military and veteran families who are leaving pandemic-related forbearance plans or renters leaving moratoriums have extra protections under law. They want to ensure that military families and vets are not illegally evicted or foreclosed on.

Service members and vets have extra protections under the Servicemembers Civil Relief Act. That law protects certain servicemembers’ mortgages from being foreclosed upon or the eviction of military families from their homes without court orders. It also allows military families to terminate residential leases early and without penalty when receiving military orders.

The letters from CFPB and DOJ come in response to growing reports of complaints from military families and veterans who have alleged numerous mortgage servicing violations, including inaccurate credit reporting, misleading communications to borrowers, and required lump sum payments for reinstating their mortgage loans.

“The illegal foreclosures of military families in the last crisis was one of the financial industry’s worst failures,” Rohit Chopra, CFPB director, wrote in a statement. A decade ago, mortgage servicers were accused of not following additional protections for military servicemembers and vets, which resulted in numerous settlements with regulators, including a $186 million settlement between the DOJ and some of the nation’s largest mortgage servicers. “The CFPB will be closely watching mortgage servicers and will hold them accountable for illegal tactics perpetuated against military families,” Chopra says.

About 1.25 million borrowers—many of whom are military borrowers—remain in forbearance programs that will expire at the end of the year, CFPB says in a news release.

“The Department of Justice takes seriously its responsibility to safeguard the rights of servicemembers and veterans,” says Kristen Clarke, assistant attorney. “While servicemembers carry the great burdens of this nation, they should not have to worry that their sacrifices will result in economic harm to their families. Mortgage servicers and landlords must ensure that they are in full compliance with federal laws intended to protect servicemembers and their families during military service.”

National Association of REALTORS®
Reprinted with permission

Home buyers may have felt more determined in November to purchase before 2021 comes to an end and mortgage rates and borrowing costs increase, as largely is forecasted to happen.

Existing-home sales, which include completed transactions for single-family homes, townhomes, condos, and co-ops, rose 1.9% in November compared to October, the National Association of REALTORS® reported Wednesday. Sales, however, are down 2% compared to a year ago.

“Determined buyers were able to land housing before mortgage rates rise further in the coming months,” says Lawrence Yun, NAR’s chief economist. “Locking in a constant and firm mortgage payment motivated many consumers who grew weary of escalating rents over the last year. Mortgage rates are projected to jump in 2022. However, I don’t expect the imminent increase to be overly dramatic.”

Yun has forecast the 30-year fixed-rate mortgage to average 3.7% by the end of 2022. For comparison, Freddie Mac reported 30-year rates averaged 3.12% last week.

Here’s a closer look at key housing indicators from NAR’s latest housing report, reflecting November home sales data:

Home prices continue to rise—but likely not at this pace much longer: The median existing-home price for all housing types was $353,900 in November, up 13.9% from November 2020. Prices rose in every major region of the U.S., with the South registering the highest appreciation in home prices.

Yun expects that inflation and the pace of price appreciation will subside in 2022. Economists at the NAR’s third annual Real Estate Forecast Summit predicted home price increases to moderate at 5.7% next year. Read more news from NAR’s forecast summit: Housing Market Likely to ‘Normalize’ in 2022

Housing inventories move even lower: The number of homes for sale fell 9.8% in November compared to October, and are down 13.3% compared to a year ago. Unsold inventory sits at a 2.1-month supply at the current sales pace. “Supply-chain disruptions for building new homes and labor shortages have hindered bringing more inventory to the market,” Yun says. “Therefore, housing prices continue to march higher due to the near-record-low supply levels.”

Homes continue to sell fast: Eighty-three percent of homes sold in November were on the market for less than a month. Properties typically stayed on the market for just 18 days in November, the same as October but down from 21 days in November 2020.

Investors remain a strong presence: Individual investors or second-home buyers purchased 15% of homes in November, up from 14% a year ago. They also tend to account for the biggest bulk of all-cash sales, which made up 24% of transactions in November. Meanwhile, first-time home buyers continue to struggle to compete. They comprised 26% of sales in November, down from 32% a year earlier.

Regional Breakdown

Here’s a closer look at how existing-home sales fared across the country in November, according to NAR’s sales report:

Northeast: Existing-home sales held steady in November compared to October at an annual rate of 760,000. Sales were down 11.6% compared to November 2020. Median price: $372,500, up 4.7% from one year ago

Midwest: Existing-home sales eked out a 0.7% monthly increase to reach an annual rate of 1.52 million in November. That is down 0.7% from a year ago. Median price: $260,100, a 9% jump from November 2020

South: Existing-home sales increased 2.9% in November, reaching an annual rate of 2.85 million. That marks a 1.1% increase compared to a year ago. Median price: $318,900, up 18.4% compared to a year ago

West: Existing-home sales rose 2.3% in November compared to October, reaching an annual rate of 1.33 million. Sales were down 3.6% compared to a year earlier. Median price: $507,200, up 8.4% from November 2020

National Association of REALTORS®
Reprinted with permission

Home prices are rising by double-digit numbers, causing increasing concerns around housing affordability. The Commerce Department reported that median sales prices for new homes rose nearly 19% in November, while the National Association of REALTORS® reported existing-home prices jumped by a median of 13.9% annually last month.

As home prices press higher, so is the amount that home buyers are borrowing to pay for a house. The average amount borrowed to finance a home purchase climbed to $414,115 in November, the Mortgage Bankers Association reports.

Housing analysts say a lot of the housing activity lately has been concentrated on the higher end, which could be skewing mortgage amounts higher. But higher home prices and bidding wars have prompted many buyers to stretch their budgets.

Down payments have also gotten higher. The national median down payment recently hit its highest level since at least 2005, ATTOM Data Solutions reports. The median down payment on a single-family home purchased with financing in the third quarter was $27,500, up 41% from $19,502 in the third quarter of 2020.

Many financing experts recommend that housing costs—including mortgage payment, property taxes, insurance, and other recurring housing expenses—not exceed 30% of take-home pay.

National Association of REALTORS®
Reprinted with permission

Mortgage rates stayed low for the final week of 2021, but housing analysts largely predict rates will be heading up in the coming weeks.

“Mortgage rates have been effectively been moving sideways despite the increase in new COVID cases,” says Sam Khater, Freddie Mac’s chief economist. “This is because incoming economic data suggests that the economy remains on firm ground, particularly cyclical industries like manufacturing and housing. Moreover, low interest rates and high asset valuations continue to drive consumer spending. While we do expect rates to rise, the push the first-time home buyer demographic that’s been propelling the purchase market will continue in 2022 and beyond.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Dec. 30:

• 30-year fixed-rate mortgages: averaged 3.11%, with an average 0.7 point, rising from last week’s 3.05% average. Last year at this time, 30-year rates averaged 2.67%.
• 15-year fixed-rate mortgages: averaged 2.33%, with an average 0.7 point, up from last week’s 2.30% average. A year ago, 15-year rates averaged 2.17%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.41%, with an average 0.5 point, increasing from last week’s 2.37% average. A year ago, 5-year ARMs averaged 2.71%.

Freddie Mac reports national commitment rates along with average points to better reflect the total upfront cost of obtaining the mortgage.

National Association of REALTORS®
Reprinted with permission

Conforming loan limits for mortgages backed by Fannie Mae and Freddie Mac have jumped in most of the country to $647,200, an increase of $98,950 from 2021’s limit of $548,250. The higher levels are in response to rising home prices over the past year.

The new loan limits took effect Jan. 1.

The Federal Housing Finance Agency’s House Price Index shows that home prices rose 18.05%, on average, between the third quarters of 2020 and 2021. The 2022 conforming loan limits increased by the same percentage, the FHFA reports.

However, in areas where the local median home value exceeds the baseline conforming loan limit, the limits have risen more, the FHFA says. In higher-priced locations such as San Francisco and New York, the conforming loan limits for 2022 increased to $970,800. In 2021, that baseline was $822,375.

Find out the conforming loan limit for 2022 in your area at FHFA.gov.(link is external) You can also view the interactive map(link is external) below on the site.

Find out the conforming loan limit for 2022 in your area at FHFA.gov.(link is external) You can also view the interactive map(link is external) below on the site.

National Association of REALTORS®
Reprinted with permission

The hot housing market fueled an all-time record for the amount Americans borrowed to buy homes in 2021.

Mortgage lenders issued $1.61 trillion in purchase loans last year, according to preliminary data from the Mortgage Bankers Association. That tops a previous record set in 2005 of $1.51 trillion.

Home prices have grown by double digits over the past year. That is driving up mortgage balances as Americans stretch their budgets to afford a home.

The average amount borrowed to finance a home purchase in November climbed to $414,115, the MBA recently reported.

The Commerce Department reported that median sales prices for new homes rose nearly 19% in November, while the National Association of REALTORS® reported existing-home prices jumped by a median of 13.9% annually last month.

“Buying a home is really a statement of confidence in your job situation, your financial situation, your family situation,” Mike Fratantoni, chief economist at the MBA, told The Wall Street Journal.

The surge in home prices lately is outpacing the mix of rising incomes and low interest rates, economists say. Mortgages are less affordable relative to income than at any point since 2008, according to the Federal Reserve Bank of Atlanta, as reported by The Wall Street Journal. In the first part of 2021, a mortgage payment on a median-priced home comprised about 29% of a person’s income. By October, that percentage jumped to 33%.

As home prices rise, buyers aren’t just borrowing more but are bringing larger down payments to close as well. The national median down payment recently hit its highest level since at least 2005, ATTOM Data Solutions reports. The median down payment on a single-family home purchased with financing in the third quarter was $27,500, up 41% from $19,502 in the third quarter of 2020.

National Association of REALTORS®
Reprinted with permission