Mortgage – HousingWire

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Short supply squeezes new home purchase activity in January Posted: 18 Feb 2022 07:49 AM PST Mortgage applications for new homes stalled in January, dipping by 12.5% year-over-year, according to a Mortgage Bankers Association's survey published this week. The trade group noted that the survey results showed the slowest annual pace since July 2021. However, from December 2021 to January, purchase applications grew, with a 10% month-over-month gain recorded by MBA's survey. On an unadjusted basis, the MBA estimates there were 66,000 new home sales in January 2022, an increase from 60,000 new home sales recorded in December.  Joel Kan, associate vice president of economic and industry forecasting at the MBA, said in a statement that building delays continue to impact the emergence of additional housing supply. "While homebuyer demand remains strong, purchase activity is being constrained by higher prices and building delays due to supply-chain pressures and building materials shortages," Kan said. He also noted that purchase activity for new homes continues to be concentrated in the higher end of the market and that sales prices are continuing to grow with the average loan size coming in at $427,000 in January, another record.   The average loan size for new homes in December was $423,102, the trade group noted. Throughout 2021, there were an estimated 1,595,100 housing starts, a 15.6% increase from 2020, a report released last month by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau said. Per the MBA report, new single-family home sales slumped in January, with a seasonally adjusted annual rate of 821,000 units, a 7.4% decrease from the month prior. In December, home sales were at a seasonally adjusted annual rate of 887,000 units, the report said. By loan type, conventional loans made up 77% of loan application volume, while FHA loans composed 13% of the applications. VA loans made up 9.5% of applications and USDA loans made up 0.5%. The post Short supply squeezes new home purchase activity in January appeared first on HousingWire.

LoanDepot’s Anthony Hsieh puts his money where his mouth is Posted: 17 Feb 2022 02:33 PM PST Anthony Hsieh, the CEO and founder of loanDepot, has the tricky task of trying to convince analysts and investors that the mortgage lender will gain market share and remain profitable in arguably the most competitive mortgage market ever. To demonstrate that he genuinely believes loanDepot will prevail, loanDepot’s founder and largest shareholder is putting his money where his mouth is. Since November 2021, Hseih has invested $16.2 million to purchase 3.2 million shares of loanDepot class A common stock. The volume exceeds the total he sold during the company’s initial public offering in February 2021, the company announced on Thursday.  The total invested represents 32% of the $50.4 million in salary, bonus and other compensation Hsieh pocketed in 2020.  “I believe that loanDepot’s current valuation does not fully reflect our strong business potential or our vision for long-term growth, and that’s why I continue to invest personal funds in company shares,” Hsieh said in a statement. loanDepot’s shares traded at $4.31 around 3:40 p.m. on Thursday, with a market valuation of $1.3 billion. Hsieh has lost about $2.2 million on his stock buys since November. Sponsored Video The mortgage lender debuted in the stock market in February 2021, raising $54 million by offering 3.9 million shares at $14. The volume was far below the initial plan of raising about $362.5 million by selling 17 million shares at $21.  Hsieh held 1,059,500 shares in the first quarter of 2021 but sold his position in the third quarter, according to SEC filings. In the final quarter of 2021, the executive started to buy stocks when the prices were down.  Since the company reported its 2021 earnings on February 1, the executive invested $6.2 million in 1.6 million shares.  California-based loanDepot increased loan origination volume in 2021, which guaranteed gains in market share compared to its competitors. But the multichannel lender’s gain-on-sale margin and net income fell significantly in the fourth quarter, reflecting changing market conditions. The company ended 2021 with a 3.4% market share, compared to 2.5% at the end of 2020. During a conference call with analysts to comment on the earnings, Hsieh said loanDepot is well positioned to gain market share in 2022. He said that the company has a proprietary tech stack, a diverse mix of channels, and a marketing machine that controls the lead flow, customer contact, and the point of loan origination.  According to one analyst in the conference call, the explanation about how loanDepot will gain market share doesn’t appear to be resonating with investors.  Hsieh responded: “We’re obviously disappointed as well. But this is the second inning of a long game here, and we certainly are very disciplined in our approach.”   For the first quarter of 2022, assuming no material changes in interest rates or the competitive landscape, the company expects loan origination volumes to decline to a range between $19 billion and $24 billion.  The gain-on-sale margin is expected to fall to a range between 200 and 250 basis points, reflecting a more competitive marketplace.   The pressure on margins, according to Hsieh, can last one to three quarters, provided that the mortgage market stays right around $3 trillion. “Now, if it shrinks to $2 trillion, $2.5 trillion, that pressure will continue until the industry gets rightsized in capacity,” he said. The post LoanDepot’s Anthony Hsieh puts his money where his mouth is appeared first on HousingWire.

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