Data Shows Increased Mortgage and Sales Activity in August
Written By: Joel Palmer, Op-Ed Writer
August was a decent month for the housing and mortgage markets following a few slower months earlier this summer.
Freddie Mac reported this week that its total mortgage portfolio increased at an annualized rate of 23.7 percent in August. The ending balance for the portfolio was $3.093 trillion, compared with $2.576 trillion a year ago.
In addition, its mortgage-related investment portfolio grew at an annualized rate of 37.3 percent in August following four consecutive month of annualized declines from April to July.
Freddie reported that its single-family refinance-loan purchase and guarantee volume was $65.7 billion in August, representing 58 percent of total single-family mortgage portfolio purchases and issuances.
The aggregate unpaid principal balance of Freddie’s mortgage-related investments portfolio increased by approximately $3.4 billion in August.
Freddie Mac mortgage-related securities and other mortgage-related guarantees increased at an annualized rate of 23.0% in August.
The company’s single-family delinquency rate decreased from 1.74 percent in July to 1.62 percent in August. The multifamily delinquency rate decreased from 0.15 percent in July to 0.12 percent in August.
Fannie Mae's Guaranty Book of Business increased at a compound annualized rate of 9.7% in August. That’s the highest annualized growth rate in a month since a 17.1 percent growth in March 2021.
Fannie said its conventional single-family serious delinquency rate decreased 15 basis points to 1.79 percent in August, while the multifamily rate fell four basis points to 0.42 percent.
As of August 31, 2021, 1.6 percent and 1.5 percent of Fannie’s Single-Family Conventional Book of Business based on unpaid principal balance and loan count, respectively, was in active forbearance, the vast majority of which were related to COVID-19. Fannie said 9 percent of these loans in forbearance (based on loan count) were current.
Meanwhile, the National Association of Realtors reported last week that pending home sales rebounded in August, with significant gains after two prior months of declines.
Each of the four major U.S. regions mounted month-over-month growth in contract activity. However, those same territories reported decreases in transactions year-over-year, with the Northeast being hit hardest, enduring a double-digit drop.
The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, increased 8.1 percent to 119.5 in August. Year-over-year, signings dipped 8.3 percent. An index of 100 is equal to the level of contract activity in 2001.
"Rising inventory and moderating price conditions are bringing buyers back to the market," said Lawrence Yun, NAR's chief economist. "Affordability, however, remains challenging as home price gains are roughly three times wage growth."
About the Author
As an NAMU® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
