Morning Briefing: Mortgage origination, home price appreciation set to slow says Fitch

Mortgage origination, home price appreciation set to slow says Fitch

The rate of home price increases and mortgage originations in the US will slow this year according to ratings firm Fitch.

It expects price appreciation to be 4 per cent for 2017 following a 5 per cent rise for 2016 but it highlights that the rate of growth in prices, which are now at their highest level since 2006, has been uneven across the country.

Western regions have seen faster price growth than the areas in the Northeast with prices in California, Arizona, Nevada and Washington increasing more than 50 per cent since 2012, while average prices for New York, New Jersey and Massachusetts have grown less than half of that.

For mortgage originations, Fitch expects a 15 per cent drop in new lending this year as interest rates rise and refinancing slows.

The firm says that non-bank lenders will continue to gain market share, having accounted for the majority of loans originated in the third quarter of 2016 for the first time.

While Fitch says the state of the housing market and mortgage lending industry is strong, it flags up a potential issue.

“We think that the trend of first-time buyers taking out Federal Housing Administration-insured loans, which allow for lower credit standards and lower down payments, could add material risk to the market if it continues,” says the report.

Chase to launch digital mortgage platform

Chase says it is to launch a digital, self-serve mortgage platform which will allow customers to track a loan application through closing entirely online or from any mobile device.

“Digital technology is reshaping the mortgage industry and is rapidly influencing how consumers make purchases today,” said Mike Weinbach, chief executive officer of Chase Mortgage. “This platform will allow us to be where more of our customers are, which is online and on their phones, while still offering the option to work with us in person if they prefer.”

The platform, which is expected to launch later this year, is a collaboration with mortgage-tech firm Roostify, and will also allow customers to connect with loan officers and real estate agents through a single application.

Lenders, real estate firms among world’s most admired

Fortune magazine has published its list of the world’s most admired companies which includes several lenders and real estate firms.

Among the ‘all stars’ – topped by Apple, Amazon and Starbucks – Berkshire Hathaway is the highest place, at number 4, although this includes all of its activities such as insurance along with its real estate business. JP Morgan Chase and Goldman Sachs are also considered ‘all stars’.

Among the ‘magabanks’ category, JP Morgan Chase is first and is followed by Bank of America, Morgan Stanley, Goldman Sachs, UBS, Citigroup, HSBC and Mitsubishi UFJ.

The most admired ‘superregional’ banks are US Bancorp, PNC Financial, Northern Trust, BB&T, State Street and Bank of New York Mellon.

In the real estate category, Simon Property Group, Host Hotels & Resorts, Jones Lang LaSalle, CBRE and Equity Residential are the most admired.