LOs on the Strange Spring Market & The Agent Referral Shell Game

Rates are at their lowest in a month. The listings are there. So why does this spring feel so uneven?

In today’s edition of The Mortgage Scoop, we asked LOs across the country to share what they’re seeing in the streets. And their answers are more nuanced than the headlines suggest.

Plus, for paid subscribers: A scoop on nCino/SimpleNexus shaking up its mortgage division leadership on support, how you too can have “27 marketing assistants” who happen to be your agent referral partners 😁, a top HUD official clashes w/ fair housing reps & more.

(🙏 If you like what you’re reading, tell a fellow mortgage junkie to sign up here.)

Originators are hoping Tuesday’s good news that rates are back down to 6.3% will finally propel the housing/mortgage market. Existing home sales in March were the weakest they’ve been since ‘09 👀.

Clearly there is broader economic anxiety from consumers & insurance/property taxes are quietly killing affordability.

“Honestly, the spring market has been a lot like the economy right now — a roller coaster ride,” said Ravi Patel, who leads a Union Home Mortgage branch in Cincinnati. “The good news? Lead intake has been really strong. Buyers are doing their homework well in advance, which is a great sign for future business.”

On the listing side though, “it’s very hit or miss,” he said. “Homes sitting on the market longer than 21 days are typically either outdated or overpriced. But the homes that are updated & priced right? They’re still going into multiple offers & selling well above list price.”

Patel is seeing a surge in well-qualified buyers taking advantage of ARM products — specifically 7 and 10-year ARMs — that are coming in about .375%–.5% lower than a conventional 30-year fixed. “For the right buyer, it’s a smart move in this environment.” 

While the war in Iran juiced rates, it didn’t really impact buyers like Vellum’s John Downs expected. At least not around D.C.

“I think stock volatility & headline fear caused a pause, but that was quickly erased,” he said. Anecdotally, more buyers in the D.C. area are buying homes w/ $100K to $200K in FTHB gifts from their parents, he said. And they are also talking more about having kids. “It’s a stark change from the last decade,” Downs said. “I’m starting think we just went through a time where family formation was recalibrated, & pushed out 5-10 years.”

In North Carolina, David Whitley of Whitley Mortgage said March was his first double-digit month in a couple years. “When rates dipped into the 5s I had several fence sitters decide to go ahead & pull the trigger. Compared to last year there are definitely more sellers than buyers in this area. Affordability is still the biggest challenge, especially for first time homebuyers. I've said before & still believe that interest rates closer to 5% would trigger much more activity.”

He added: “The only refinance activity are construction loans going to permanent & distressed situations like divorce or employment relocations. Been doing quite a few DSCR loans, which are super easy & clients seem to enjoy that experience.”

Breon Price at Swift Mortgage (and also of Skyline Chili Town), said a lot of LOs had a strong March, “but that business was really generated in January & February. April numbers will give a clearer picture of what the spring market actually looks like. I still think summer will be solid, but it does not feel like there isn’t the same level of optimism & excitement we have seen in past years.”

In Sacramento, Geoff Black of Guild said one interesting market development is the rise of the digital HELOC from shops like Figure “and the willingness to allow lenders to use it as a temporary bridge loan. It’s been a gray area in the past due to occupancy. Seems that the dam has broken.”

Did you see that All Birds announced a pivot from fugly-but-functional Tech Bro Sneakers to AI/data centers… & its stock surged 700%? It reminds me of that scene in “The Big Short” when Steve Carrell (Mark Baum) talks to the stripper in Miami & immediately cuts to:

I mean, JFC, what are we even doing here?

Longtime nCino/SimpleNexus support leader Travis Cox & several of his teammates have left as part of a leadership restructuring.