Get live statistics and analysis of Colin Robertson's profile on X / Twitter

Hello 5% mortgage rates. Goodbye economy?

Back to 7% mortgage rates we go? Despite the trade deals and lower inflation?

Mortgage rates are going higher. But why?

Home builders and their in-house mortgage lenders are having a moment. PulteGroup, the nation's 3rd largest builder, just announced a capture rate of 84% in Q1, meaning most home buyers are opting to use their captive lender. Simply put, it's almost impossible for outside lenders to compete with builders offering massive mortgage rate buydowns. Their ability to offer below-market rates may also explain why the company saw an 11% increase in home sales compared to a year ago and record home sale revenues during the quarter. And despite interest rate headwinds, their average sales price only fell 1% YoY to $538,000. PulteGroup President and CEO Ryan Marshall said in the release, “After more than a decade of underbuilding, it is estimated that our country has a structural shortage of several million homes.” Combined w/ existing home supply locked-in, it seems like a pretty good time to be a home builder.

Whenever someone writes, "3% mortgage rates are not coming back," I think to myself they probably are, somehow.

Fannie Mae and Freddie Mac have just increased their appraisal waiver programs from 80% to 90% LTV/TLTV. This means more home buyers will be able to put just 10% down and avoid the expense and waiting period of a traditional appraisal. These waivers allow lenders to underwrite loans without an appraisal, using historical data and public records instead. In addition, the pair's more robust inspection-based appraisal waivers will allow LTVs as high as 97%, meaning just 3% down w/o an appraisal. Freddie Mac says the move will help lower-income borrowers, including many first-time homebuyers. Fannie Mae says, "Responsibly increasing the eligibility for valuation options that leverage data- and technology-driven approaches can also help reduce costs for borrowers." The changes are expected to go live in Q1 2025. To date, Freddie Mac’s ACE waivers have saved borrowers more than $1.63B in appraisal fees, while Fannie Mae's appraisal alternatives have saved more than $2.5B. Perhaps not good news for appraisers. But faster, cheaper, and easier closings for home buyers.

Guys, it's not a mortgage rate story anymore (yes, this is 30-year fixed pricing).

I don't know who needs to hear this but firing Jerome Powell won't lower mortgage rates.

Why does everyone think there's going to be a housing boom if/when mortgage rates fall? The home builders already offer low mortgage rates and sales and prices have fallen flat. Meanwhile, there were 481,000 new homes for sale as of May, the highest level since 2008.

How does Toll Brothers have any homes left with rates like these? Oh yeah, because it’s not about the rates.

A credit union in Michigan is offering a 30-year fixed at 4.99% to woo customers. Sees it as a way to make money on their excess cash and not lose the loans to a refi "if rates do drop as projected." The loan offered by Michigan Legacy CU can be used for a purchase or refi.

Looks like 30-yr fixed mortgage rates are going back to the 6s today after hedge fund executive Scott Bessent was selected to be the next Treasury secretary. The gist is probably that the overly-dramatic rise of the 10-year yield over the past two months is completely overdone.

Here’s why the 2024/2025 housing crash thesis doesn’t add up. Proponents of a crash are focused on RECENT buyers, not the collective universe of homeowners. In the early 2000s, both existing homeowners and new buyers were in over their heads with absolute garbage mortgages. The existing owners refinanced to 100% LTV or higher with garbage loans and burnt the cash on discretionary purchases like boats, Range Rovers and Hummers. All while making the minimum payment each month on an option ARM. The new buyers qualified for homes with garbage loans too, typically via stated income or no doc and often elected to go with ARMs. Fast forward to today and we’ve got unaffordable housing conditions again. If this was 2006, and not 2024, home sales would be flying higher as more unqualified buyers continued to purchase homes thanks to shoddy underwriting and now-banned loan types. But b/c of the lack of garbage loans and garbage underwriting, very few have bought in the high-rate era since mid-2022. This lack of sales volume is another saving grace unlike in the early 2000s when garbage loans fueled tons of home sales at the peak that should have never happened. All while existing owners tapped their equity to no end. Today, the lion’s share of homes are financed by low-LTV, 30-yr fixed rate mortgages set at 2-4%. And they were fully underwritten to boot. Even if recent home sales have stretched wallets, there haven’t been many because you can’t fudge your way into a mortgage anymore.

Actual footage of mortgage underwriting in 2006.

If we had normal mortgage rate spreads, the 30-yr fixed would be ~5.5% this AM. Chances are it’ll move even lower than that in coming months, even w/ wide spreads. This might be the end of the high mortgage rate story. Now it’s a home price and wider economy question…

Back to 7% mortgage rates we go? Despite the trade deals and lower inflation?

Are the home builders hurting because of high mortgage rates or because existing supply is starting to pile up?

Mortgage rates are going higher. But why?

Guys, it's not a mortgage rate story anymore (yes, this is 30-year fixed pricing).

Here’s why the 2024/2025 housing crash thesis doesn’t add up. Proponents of a crash are focused on RECENT buyers, not the collective universe of homeowners. In the early 2000s, both existing homeowners and new buyers were in over their heads with absolute garbage mortgages. The existing owners refinanced to 100% LTV or higher with garbage loans and burnt the cash on discretionary purchases like boats, Range Rovers and Hummers. All while making the minimum payment each month on an option ARM. The new buyers qualified for homes with garbage loans too, typically via stated income or no doc and often elected to go with ARMs. Fast forward to today and we’ve got unaffordable housing conditions again. If this was 2006, and not 2024, home sales would be flying higher as more unqualified buyers continued to purchase homes thanks to shoddy underwriting and now-banned loan types. But b/c of the lack of garbage loans and garbage underwriting, very few have bought in the high-rate era since mid-2022. This lack of sales volume is another saving grace unlike in the early 2000s when garbage loans fueled tons of home sales at the peak that should have never happened. All while existing owners tapped their equity to no end. Today, the lion’s share of homes are financed by low-LTV, 30-yr fixed rate mortgages set at 2-4%. And they were fully underwritten to boot. Even if recent home sales have stretched wallets, there haven’t been many because you can’t fudge your way into a mortgage anymore.

Why does everyone think there's going to be a housing boom if/when mortgage rates fall? The home builders already offer low mortgage rates and sales and prices have fallen flat. Meanwhile, there were 481,000 new homes for sale as of May, the highest level since 2008.

Hello 5% mortgage rates. Goodbye economy?

Whenever someone writes, "3% mortgage rates are not coming back," I think to myself they probably are, somehow.

I currently know of three homes for sale on a single street, all in a row. What I don’t understand is the logic of pushing forward when prospective buyers will know this. At what point does the third real estate agent say maybe we should wait?

Talked to a guy over the weekend who just closed escrow on a new home purchase. Said his new rate is 7.25%. Old rate is/was 2.75%. Currently selling his old property and giving the sellers of his new home a two-month rent back. To close the gap, they're throwing a TON of

Fannie Mae and Freddie Mac have just increased their appraisal waiver programs from 80% to 90% LTV/TLTV. This means more home buyers will be able to put just 10% down and avoid the expense and waiting period of a traditional appraisal. These waivers allow lenders to underwrite loans without an appraisal, using historical data and public records instead. In addition, the pair's more robust inspection-based appraisal waivers will allow LTVs as high as 97%, meaning just 3% down w/o an appraisal. Freddie Mac says the move will help lower-income borrowers, including many first-time homebuyers. Fannie Mae says, "Responsibly increasing the eligibility for valuation options that leverage data- and technology-driven approaches can also help reduce costs for borrowers." The changes are expected to go live in Q1 2025. To date, Freddie Mac’s ACE waivers have saved borrowers more than $1.63B in appraisal fees, while Fannie Mae's appraisal alternatives have saved more than $2.5B. Perhaps not good news for appraisers. But faster, cheaper, and easier closings for home buyers.

I've found that real estate agents are very hesitant to negotiate their fee. So much so that it's often a non-starter unless you are very persistent and aggressive. Recently asked two agent friends and they said the same. In other words, the fee often ISN'T negotiable.

Everyone seems to be worked up about the potential real estate agent commission changes. But in practice, my guess is most listing agents will still charge the usual 2.5%, perhaps a tad less. And if home sellers actually want to sell, they'll likely still offer to pay the buyer's agent commission too. Consider a $500,000 home sale. If the seller wants to sell it quickly and successfully, their agent will likely recommend offering compensation (outside the MLS) to a buyer's agent, assuming this is still permitted. The seller will likely be told that it will increase the odds of their home selling, for a couple reasons. For one, the home buyer won't need to come out of pocket to pay their own agent, something many are concerned about, especially for first-time buyers with little set aside in savings. And the agent will be more motivated to make an offer on a home where they're receiving a commission, even if this practice is scrutinized. It could also make the mortgage transaction smoother w/o any need for concessions or additional burden on the buyer's assets. Simply put, if the seller won't provide any commission to the buyer's agent, it could hurt the marketability of the property. This in turn could lead to a lower sales price if the property languishes on the market as a result. Imagine the seller offered 2% of the sales price ($10k) to the buyer's agent from the get-go versus selling below-list, say $485,000, w/o offering anything to buyer's agent. It seems this settlement is attempting to fix the cooperative commission issue, which *may* inflate home prices slightly. But in reality, it kind of makes sense for the seller to facilitate the sale of their home by making it more fruitful to the buyer's agent and less of a burden for the buyer. And in the end, the seller probably winds up with similar sales proceeds anyway. Ideally, the changes at least result in more transparency and negotiation. But I could foresee much of the status quo maintained, perhaps just carried out a little differently.