New-home sales show housing ready for rescue role

New-home sales show housing ready for rescue role

Sales of new houses in August rose to 1.001 million at a seasonally adjusted and annualized pace, the Commerce Department said on Thursday – the first time the number has broken 1 million in 14 years.

The number shows that while other sectors of the economy are soft, housing is ready to play its traditional countercyclical role of leading the way out of a recession, said Robert Dietz, chief economist of the National Association of Home Builders.

It didn’t happen last time, when the proliferation of risky subprime mortgages that were packaged into bonds sold on Wall Street ended up tanking the economy in 2008, causing home prices to fall. But it did happen in every other recession since World War II.

“Housing is the bright spot in the economy right now,” Dietz said in an interview. “It’s a total flip of where we were during the Great Recession when the economic crisis was focused on housing.”

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RE/MAX acquires location intelligence data company

RE/MAX acquires location intelligence data company
RE/MAX Holdings has acquired fintech company the Gadberry Group, its second fintech acquisition this month. No financial details were disclosed in Monday’s announcement, but according to RE/MAX the acquisition was comprised of cash and stock.

Gadberry Group is a location intelligence data company of 16 employees who build products that help clients solve geospatial challenges through accurate and precise location data.

According to RE/MAX, Gadberry Group will continue to serve non-RE/MAX clients while contributing to RE/MAX.

“The acquisition of Gadberry Group is another building block in the RE/MAX quest to become the worldwide leader in real estate technology,” said Adam Contos, RE/MAX Holdings CEO in a statement.

“For our RE/MAX brand, Gadberry Group is highly complementary to both our First app and booj platform, further strengthens our overall technology infrastructure, and bolsters our formidable data and analytic capabilities,” Contos said. “For RE/MAX Holdings, Gadberry Group further broadens our revenue mix and represents another attractive avenue for growth.”

Serene Smith, chief operating officer of RE/MAX, told HousingWire that the brokerage has been utilizing Gadberry Group’s services since March 2019, and have been impressed with the talent and quality of data from the platform.

“We’re always looking for opportunities where we can have companies that can potentially help us provide better services to our agents and our brokers,” Smith said. “So whether or not it’s assisting with the agent consumer experience or specifically just targeted towards our agents and our brokers just being able to build their businesses.”

RE/MAX Holdings and its mortgage franchise Motto Mortgage announced on Sept. 1 the acquisition of wemlo, a mortgage processing startup, for an undisclosed amount.

Wemlo’s platform connects mortgage brokers and loan originators to the largest processing network in the country, which mitigates the problem of hiring experienced processors, Dustin Morton, vice president of product and strategy at Motto Mortgage said to HousingWire.

Smith said that they’re working out their integration plan and their strategy to hit the ground running with wemlo.

Both of these acquisitions are meant to diversify RE/MAX Holdings’ revenue and growth opportunities and improve the customer experience.

“We’re really excited about the future,” Smith said. “We’ve done a handful of transactions over the course of the last year, and all of them are absolutely increasing our overall value proposition to our agents and our brokers, so we’re excited to add these two into the fold.”
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Time is almost up to nominate your Tech Trendsetter!

Time is almost up to nominate your Tech Trendsetter!
For the second year in a row, HousingWire’s Tech Trendsetters award will recognize 50 individuals in the technology industry. The award highlights the most impactful and innovative technology leaders serving the housing economy.

Nominations opened at the beginning of September, and will close September 25, 2020 — so you better get nominating!

Each year, HousingWire recognizes the top technology companies in the housing finance space with the Tech100 Mortgage and Tech100 Real Estate. Now, with Tech Trendsetters, we have the opportunity to recognize the individuals behind the technology and innovation.

The ideal candidates are executive, product and technology leaders who have played a key role in bringing innovative solutions to market for their clients. Particularly during this pivotal time for the housing industry as we enter a new era of modernization. 

While technology is changing the housing industry as we know it, it is the people behind the tech that are really driving that change.

Submit your nominees today before time is up!
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Here are the 2020 HousingWire Vanguards

Here are the 2020 HousingWire Vanguards

The 2020 list of HousingWire Vanguard potential candidates was more competitive than ever before. On any other given year, many would have easily won – but this was not any other year. The competition was fierce. 

But even more impressive was the back story behind many of our top housing executives. Just over 20% of this year’s Vanguards are women. This is not the 50% I hope we will someday see, but it is far above the 7% level of top female executives at Fortune 100 companies. Women today enjoy a much more level playing field, where hard work and determination are some of the largest factors in their success, but that wasn’t always the case. 

We frequently see executive women who started their career as a secretary at their financial firms because that was the only position available to women at the time – then later ran that same company. In one instance, a woman became the first female member of the executive team, and the board had to change where it met because the place that it was using for business meetings at the time did not allow women to enter. 

Many of this year’s winners fought through varying hardships to get to where they are today. One of the 2020 HousingWire Vanguards, William Lyons, appeared on season 4 of Shark Tank to ask for an investment on his real estate investing website. The judges were unimpressed and tanked his idea, saying they didn’t “understand how it’s possible to make estimations on value,” and that they didn’t “believe Bill has a real business concept.” 

Needless to say, Lyons did not stop there, and now runs Griffin Funding, which has been recognized by Inc 500 and the Fastest 100 in San Diego County. 

This year’s Vanguards are filled with success stories – the executives that made it to the top, and now dominate the housing industry. Flip through to read their stories.

This list is available early for HW+ members. Click here to subscribe to the HW+ premium content platform. The full list and individual profiles will go live for all readers on Oct. 1, 2020.

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Real estate agents can host virtual home tours with this new solution

Real estate agents can host virtual home tours with this new solution
On Wednesday, real estate tech company Zigzy launched beta testing of Townify, a solution that enables real estate agents to host virtual open houses, which has become a necessity in a time when we are told to remain socially distant, the company said in a release.

Technology advancements have been increasing as the COVID-19 pandemic trucks on, forcing people to stay at home for their own health. One popular tech solution in the real estate space is virtual home tours, which the likes of Zillow, Redfin, realtor.com and Keller Williams have adapted to keep business going in a safe way.

Through Townify, real estate agents can offer and provide virtual home tours to homebuyers who don’t feel comfortable touring the home in person. Also via Townify, home sellers can control the number of people who visit their house.

The solution includes scheduling and hosting virtual open houses, with personally branded sign-in sheets for potential buyers who attend the open house. Townify also plugs into many top CRM systems, the company said in a release.

Although states have reopened, allowing for open houses to resume at limited capacity, virtual home tours remain popular.

In July, 72% of Zillow agents said they are likely to continue providing virtual tours after the COVID-19 outbreak ends.

Fewer in-person showings at least most of the time during the current outbreak was the case for 64% of agents, and 31% anticipate this trend will continue after the outbreak is over.

Additionally, 75% of U.S. adults in July said they would want the option to tour remotely through virtual or video technology if they were home shopping right now.
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Better.com in talks to raise $100M at $4B valuation: report

Better.com in talks to raise 0M at B valuation: report
Digital mortgage lender Better.com is in talks to raise more than $100 million in new funding that would value the company at about $4 billion before an upcoming public offering, according to a new report.

The New York-based mortgage lender, backed by Kleiner Perkins, Goldman Sachs and Citigroup, told investors it expects revenue to jump from $100 million in 2019 to north of $800 million this year, sources told The Information.

The potential new funding round comes amid a historic period of growth for the mortgage industry. In the second quarter, lenders originated more than $1.1 trillion in mortgages. And with rates near-zero, about 70% of those loans were refinancings. Digital lenders like Better.com in particular have capitalized on the refi rush, thanks to social distancing protocols brought on by the pandemic.

One source told The Information that Better.com went from losing more than $10 million a month to “reaping significant monthly profits” due to heavier loan volumes. That same person told the outlet that it may be difficult to maintain such profitability, likely due to the cyclical nature of the mortgage industry, the upcoming adverse market fee, and the glut of well-capitalized competitors.

Better.com, founded in 2014 by entrepreneur Vishal Garg, raised $235 million last year and has been on a hiring spree ever since. It now has over 3,000 employees, mostly non-commissioned loan officers. The firm is looking to grab market share through its tech platform and the convenience it provides prospective borrowers. Better.com sells its mortgages to Fannie Mae and Freddie Mac and then partners with sub-servicers to handle loan servicing.

If Better.com were to close the $100 million funding round and prepare for an IPO, it would be the fourth mortgage lender to do so this year.

Rocket Companies, the nation’s largest mortgage lender, went public in the summer. Its stock has trended down in the last week, but the company sports a market cap of over $40 billion. LoanDepot, which has both retail and wholesale divisions, is eyeing an IPO at a potential $15 billion valuation. And United Wholesale Mortgage will be going public in the fourth quarter via a special purpose acquisition company (SPAC) merger, with a $16.1 billion valuation.
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Renovation loans get pandemic boost as homeowners want home offices

Renovation loans get pandemic boost as homeowners want home offices

Vexed by work-from-home arrangements owing to the COVID-19 pandemic, homeowners are taking the long view and rethinking floor plans. The reality is, home offices are no longer a luxury.

In the initial three weeks of public health lockdowns in March, according to Gallup, the percentage of employed Americans working from home doubled to 62%. Of these workers, three in five said they’d prefer to work from home when restrictions are lifted. Homeowners are serious about dedicating room for work.

There’s a mainstay in mortgage finance poised to help in working from home. The Federal Housing Administration’s 203(k) rehabilitation mortgage insurance program is designed for borrowers to renovate when they purchase or refinance.

For over 40 years with Section 203(k) of the National Housing Act, FHA has been protecting lenders with fully-insured mortgage loans even as renovations are underway. In turn, the program opens access to much-needed renovation capital for borrowers.

As with any program, there are parameters, but this one isn’t confined to repairs. It allows for actual home improvements to complement contemporary lifestyles. And these days, that means renovation choices brought on by the coronavirus and the remote economy.        

“Since many people work from home – and plan to be home more now since COVID – I’m seeing both purchases and refinances with homebuyers and homeowners, who are planning projects to add more square footage to the existing structure of homes in their desired location, but not enough room to convert into space,” said Patrice Watkins, vice president of Renovation Lending at Guaranteed Rate.

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Home prices post record two-month gain, FHFA says

Home prices post record two-month gain, FHFA says
Home prices jumped more than 2% between May and July, the largest two-month gain on record, as Americans emerging from COVID-19 lockdowns bought real estate, the Federal Housing Finance Agency said in a Wednesday report.

Gains in prices were driven by mortgage rates that started tumbling to record lows after the Federal Reserve began a bond-buying program in March to prevent a credit freeze amid the pandemic-induced recession. The Fed has spent about $1 trillion in the last six months buying mortgage-backed securities, which caused rates to fall to new record lows nine times.

“The dramatic increase in prices this summer can be attributed to the historically low interest rate environment and rebounding housing demand even as the supply of homes for sale remains constrained,” Lynn Fisher, an FHFA deputy director, said in the report.

Measured from a year ago, U.S. home prices in July jumped 6.5%, the FHFA said. The biggest gains were in the Mountain region, that includes Colorado and Utah, and in the East South Central region, including Tennessee and Kentucky. Both were up 7.7% from July 2019.

New England, including Massachusetts and Connecticut, was up 7%, and the South Atlantic region, including Florida and Georgia, was up 6.8%.

The average U.S. mortgage rate for a 30-year fixed mortgage was 2.87% last week, the second-lowest level on record, after rising one basis point from the prior week’s all-time low of 2.86%, Freddie Mac said on Thursday.

The rate has been below 3% for the last eight weeks, a level that a year ago was inconceivable even to the closest watchers of the mortgage market.

Low mortgage rates make it possible for more buyers to qualify for loans because cheaper interest rates shrink monthly mortgage bills. Cheap financing also supports price growth because buyers typically qualify for bigger mortgages.

The FHFA index is calculated using prices for single-family homes bought with mortgages backed by Fannie Mae and Freddie Mac. Because of this, it excludes cash transactions and sales of high-end homes bought with jumbo loans.
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Rock Venture’s Trina Scott to speak at HousingWire Annual

Rock Venture’s Trina Scott to speak at HousingWire Annual
Call it what you want – a disruption, a revolution, a transformation or perhaps a thorn in your side, there is no denying the pandemic has stirred the housing industry in all its sectors. How companies adapt and pivot while fostering their teammates’ growth may very well decide who will be on the right and wrong side of history after the gloves – and masks – come off.

That’s why we’ve invited Trina Scott, chief diversity officer at Rock Ventures, to speak at our HousingWire Annual event on Oct. 8, discussing how championing a team that companies can be proud of in times of distress lays the foundation for long-term success. Scott will be joined by Kenon Chen, executive vice president, corporate strategy at Clear Capital, and Montell Watson, director of corporate strategy at Movement Mortgage on the panel entitled: Business Strategy During Social Upheaval.

In her current role, Scott develops strategy and infrastructure that fosters a culture of equity and inclusion – leveraging the diverse perspectives of Rock Venture’s team. She is passionate about people and creating a work environment that is grounded in collaboration and freedom of self-expression. She also seeks to build positive connections between the Rock family of companies and its local communities by helping to attract, engage, and develop top talent.

Scott joined the Rock family of companies to lead the diversity and inclusion team in early 2017. She spent the previous 10 years with a public accounting firm where she focused on the company’s corporate social responsibility efforts. While there, Scott launched a youth mentorship program centered around college access in 30+ U.S. urban cities, which helped more than 1,000 young people get accepted to college.

A native Detroiter, Scott is devoted to the city’s communities and is committed to providing underserved young people with the resources necessary to flourish both personally and professionally.

HW Annual features other housing virtuosos, including Cindy Waldron, vice president of research and analytics at Freddie Mac, Doug Duncan, senior vice president and chief economist at Fannie Mae, Ed DeMarco, president of the Housing Policy Council, Laurie Goodman, vice president of the Urban Institute, Robert Dietz, chief economist at the National Association of Home Builders and many more.

We’re focusing this virtual event on The Great Acceleration — the disruption speeding through the business landscape, upending traditional strategies and agendas for those in housing. We’ve got sessions on the future of regulation, increasing homeownership in underserved communities, green housing, capital market appetite by channel and much more.

HW+ members can attend for free by registering here. Not an HW+ member yet? You can sign up for free attendance plus get the amazing premium content we publish digitally and in the print magazine. Regular registration can be accessed here.
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Zillow iBuying program brings real estate transactions in-house by licensing Zillow Homes employees

Zillow iBuying program brings real estate transactions in-house by licensing Zillow Homes employees
The iBuyers are quickly becoming all-in-one-buyers. On Wednesday, Zillow announced that its Zillow Offers customers will be offered “a more simple, integrated transaction experience through added services, managed in house,” starting in January 2021 with Zillow Homes.

Customers in Atlanta, Phoenix and Tucson who sell their homes via the iBuying solution will work directly with licensed employees of Zillow Homes, its brokerage entity.

A Zillow spokesperson told HousingWire that these people are already employed with Zillow, and will be getting real estate licenses. Zillow said it will not be recruiting for these positions.

Zillow-owned homes in Atlanta, Phoenix and Tucson will be listed for sale by Zillow Homes employees who are licensed real estate agents. The Zillow Homes solution will expand into more markets throughout 2021.

George Laughton, a Phoenix-area Zillow broker partner, told HousingWire that this means he will no longer be the broker on record for Zillow Offers transactions, but will continue to partner for all the opportunities that come out of it.

“Usually, when a buyer’s touring a Zillow home, they need boots-on-the-ground support and we will continue to be that support for them,” Laughton said. “Or, should they choose not to move forward with Zillow’s offer and proceed in a more traditional fashion, we have that option there.”

The localized partnership is also available to help the seller move into a new home after Zillow purchases the other home.

Laughton said the mission at his brokerage, the Laughton Team at My Home Group, “has always been very aligned with Zillow in helping streamline the processes for buyers and sellers through creative solutions and innovation.”

Zillow Offers customers can already use Zillow-affiliated mortgage, title and escrow services through Zillow Home Loans and Zillow Closing Services, the company said in a release.

“We’re excited to add another important link in the Zillow Offers transaction chain to offer our customers greater choice and convenience when considering a move,” Jeremy Wacksman, president of Zillow, said in a statement.

Zillow also said it will be simplifying the way it collects listing data, moving from thousands of disparate data feeds to MLS Internet Data Exchange feeds, which are offered directly through MLSs to their members.

Zillow isn’t the only iBuyer reaching into the broker business.

Last month, Opendoor began bringing aboard real estate agents in Phoenix to support its “Home Reserve” iBuying platform, while in June, Offerpad announced that it would allow users to list their homes with Offerpad’s own agents, in addition to using concierge services.
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