Our agents are hosting Open Houses this weekend all over the OKC Metro. You can find all of these listings on our website. Please reach out to the listing agent for information on times and more information on the listing!
If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
Many lenders are not getting a sense of déjà vu with the current mortgage industry downturn, according to mortgage advisory firm Stratmor Group.
“This one feels different,” a recent Stratmor report states, citing executives in the mortgage industry.
This time around, the fast mortgage rate increase, the large origination volume decrease and margin compression could cause an “unprecedented amount of excess capacity, and many lenders will need to sell or simply won’t survive,” Jim Cameron, Stratmor’s senior partner of Stratmor, said.
Of the top five monthly mortgage rate increases to occur since 1984, three took place during the first 10 months of 2022 — one in September (89 bps), April (81 bps) and October (79 bps).
Meanwhile, forecast volume for 2022 is expected to drop by $2.18 trillion — the largest dollar volume drop in history. At 49%, this year’s forecasted decline would be the largest percentage decline in year over year volume since 1990, according to the Mortgage Bankers Association.
In addition, more lenders are chasing fewer loans, and the speed and severity of this downturn has created revenue and margin compression on “steroids,” the report states. With 35-plus years of mortgage rates on a declining trend, rates bottomed out in 2020, limiting “the possibility of a major refinance boom bailing out the industry.”
While 2021 was a record year for production volume at $4.4 trillion, the largest decrease in revenue occurred in 2021 in both retail, which dropped 68.8 bps, and wholesale, which declined 137 bps, followed by the first half of 2022, according to the MBA and Stratmor Peer Group Roundtables (PGR) program.
That’s not to say there is no hope. Demographics, low delinquencies and healthier-than-normal household net worth are some of the factors that Stratmor believes will lead the downturn to be shorter than usual.
A large cohort of 28- to 38-year-olds in prime homebuying age will drive purchase business in the next three to five years, Cameron said, and historically low delinquency rates will mean more borrowers will be eligible for new purchase or refinance loans.
Household net worth has also been on a rising trend since 2009. In addition, household financial obligation ratio, which is at 14.27, and debt service ratio, which is at 9.58, are much lower than historical averages, and are lower than when the U.S. economy entered the Great Recession of 2007 and 2008.
“This is good news for lenders — as we emerge from this mortgage market downturn, borrowers and prospective borrowers will be in a better position to qualify for mortgages and to make their payments once they close their loans. While the recession risk looms large, at least households are in much better shape with respect to net worth, delinquencies and the ability to meet financial obligations,” the report notes.
Non-bank lenders, particularly independent mortgage bankers (IMBs), are more likely to react quickly to shed staff during a downturn as compared with banks, the report adds.
Warehouse lenders require non-banks to maintain compliance with profitability, capital and liquidity covenants. Non-banks also typically don’t have lines of business other than loan servicing to subsidize mortgage, which means that cutting costs and shedding capacity is a matter of survival — especially for those without a servicing portfolio.
Since non-banks accounted for 63% of the entire market in 2021, up from 24% in 2010, and are “more likely to consolidate, this would argue for a shorter duration downturn,” the report states.
“This may be the most painful downturn in mortgage banking history in terms of the severity of the downturn and the speed with which it occurred,” Cameron said.
But some bright spots in demographics, low delinquencies and healthier than normal household net worth “may help hasten us toward the day when we can return to “normal” with revenue rationalizing, capacity adjusted and a return to profits that are reasonable based on the risks of the business,” Cameron said.
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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
“We updated our living room by adding more color, texture, and vintage finds,” said West + Main agent and homeowner Angela Cheatwood. “Once we were done, our space had more color and personality. It’s much more us!”
"On a recent trip to Jackson, WY I walked past a store called Mountain Dandy every day," said Angela. "I loved the mix of new and vintage, the gallery walls, and the cozy textures. I knew it was time to revamp our living space."
"As soon as we moved into our home, we knew our couch wasn’t right for the space so I started there," explained Angela. "After weeks of searching we found the right furniture and moved on to the rug. I wanted something to add color and character while also tying in our green kitchen. It was a difficult search, but I’m glad I was patient! Our rug really makes the room."
“To add even more color, I used photos from our family trips and frames and artwork I already had around the house,” said Angela. “Not only did it really change the space, but now all of our wonderful memories are on display. We added the mantle for more warmth and the storage cabinet because of our 3 children. The finishing piece is a one-of-a-kind, vintage store poster from Lawton,Oklahoma. I really tried to use what we had already and find budget items for our extras.”
"Since we had to buy new furniture the majority of our budget went there. We did shop around online and found a great couch on sale!" said Angela. “Our kids LOVED the revamp. They were really excited to have a movie night and were big fans of all the color we added! My favorite part about our project is that our home feels more like us! It has personality now. I love getting home after a long day and enjoying time with our family and friends in this space.”
Materials + Source:
Furniture: West Elm
Rug: Randi’s Rugs
Pillows: Target, World Market, H&M home
Ski Blanket: Made Jackson
Storage cabinet and Mantle: Home Depot
Labor Cost Or DIY: We added the mantle and revamped our entry cabinet. $200
If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
Situated in a quiet cul-de-sac, this 3 bedroom home plus a study is picture perfect. The open kitchen and living are perfect for entertaining. Located on the opposite side of the home from the 2 secondary bedrooms, the large owner’s suite features an oversized closet, double vanity, soaker tub, and separate shower. The study off the living room is currently used as a beauty room, but would make a perfect office or rec room. The Grove offers many amenities, including 2 pools and clubhouses, fitness center, parks, basketball court, and much more! With great access to the city and Deer Creek school system, this is the perfect location. Schedule your tour today!
Listed by Shonda Mobley for West + Main Homes. Please contact Shonda for current pricing + availability.
ATTOM’s latest 2022 Grocery Store Wars Analysis shows grocery stores might increase a home’s value based on home-price appreciation and home equity, or also as an investor looking for the best home-flipping returns and home-seller ROI.
The study looked at current average home values, 5-year home price appreciation for YTD 2022 vs. YTD 2017, current average home equity, home seller profits, and home flipping rates in U.S. zip codes with at least one Whole Foods store, one Trader Joe’s store and one ALDI store.
Key highlights:
Trader Joe’s wins out when it comes to average home value for nearby homes, with $987,923. Whole Foods follows up with $891,416, and then ALDI with $321,116.
Not only does Trader Joe’s lead the pack for home values, but it also takes the lead in home equity with homeowners earning an average of 50% ($520,842) equity, compared to Whole Foods at 45% ($433,311) and ALDI at 38% ($132,643).
ALDI won at 5-year home price appreciation with 58%, while Trader Joe’s saw 49% and Whole Foods saw 45%.
Properties near an ALDI are ripe for investors, with an average gross flipping ROI of 54%, compared to Whole Foods with 28% and Trader Joe’s with 25%.
ALDI again wins at average home seller ROI with 61%, while Trader Joe’s sits at 58%, and 51% for Whole Foods.
Major takeaway:
“Smart homebuyers might want to consider where they’ll do their grocery shopping when they’re shopping for a new home.” said Rick Sharga, executive vice president of market intelligence at ATTOM. “It turns out that being located near grocery stores isn’t only a matter of convenience for homeowners but can have a significant impact on equity and home values as well. And that impact can vary pretty widely depending on which grocery store is in the neighborhood.”
Get the full report on RISMedia.
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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
