The HousingWire award spotlight series highlights the individuals and organizations that have been recognized through our Editors’ Choice Awards. Nominations for HousingWire’s TECH100 award are open now through Friday, December 23, 2022. Click here to nominate your organization.
As the housing market continues to throw curveballs, easy access to reliable real estate data has become a linchpin for housing professionals as they attempt to navigate an ever-changing market. For many in the industry, access to market data provides a necessary glimpse of what’s-to-come in housing. This data allows them to pivot strategies based on their insights.
Companies like ATTOM, a leading curator of real estate data and multi-year TECH100 winner, are making advancements in technology by delivering property data solutions that address a wide range of needs for real estate professionals.
Each year, the TECH100 awards recognize the most innovative and impactful organizations in real estate and mortgage that provide support and solutions to their clients. Nominee accomplishments range from revolutionizing the secondary mortgage market to building a one-click checkout for real estate transactions but they all have one common goal of supporting a more efficient, accessible and sustainable housing economy.
HousingWire reached out to Rick Sharga, executive vice president of market intelligence at ATTOM to learn more about the company’s ever-expanding data portfolio and hear what insights he has for the market as we approach 2023.
HousingWire: ATTOM recently announced the integration of NMLS data into its platform. What use cases are emerging through client and user utilization of this data? Are users leveraging the power of NMLS data directly through the ATTOM platform or integrating the data into their workflow technologies?
Rick Sharga: ATTOM’s NMLS data and loan originator analytics provide unparalleled insights into loan origination activity, from the hyperlocal to national level. This dataset shows who is originating residential loans, where and with which loan products, partners and at what volume. It is a powerful resource for mortgage originators and lenders, as well as others in the real estate space. ATTOM’s NMLS data delivery solutions include: ATTOM Cloud; Property Data APIs; Bulk Data Licensing; Property Reports; Marketing Lists; Real Estate Market Trends; and Match & Append.
HousingWire: Shaking the crystal ball, do you see any areas of opportunity in 2023? How does the data support this prediction?
Rick Sharga: Higher mortgage rates have dramatically affected affordability for many prospective homebuyers — especially first-time buyers, who don’t have the benefit of equity to leverage against their home purchase. As a result, many of these buyers will look to rent until market conditions improve, creating opportunities for both single family rental property and multi-family property owners. We’re seeing evidence of this in data that indicates weakening demand, such as pending sales and purchase loan application reports. We’re also seeing it in the market itself, where home sales have declined for 13 consecutive months, and home price appreciation has slowed down and in some cases reversed course.
Another opportunity for both real estate investors and homebuyers is the migration from high cost/high tax regions to less expensive markets by people who can now work from home and people simply looking for a place where they can afford to buy a house. This suggests that states in the South and Southeast may continue to see population and job growth, which both point towards higher home sales and healthier prices than in some other markets.
HousingWire: ATTOM’s Q3 U.S. Home Sales Report showed that profit margins on median-priced single-family home and condo sales in the U.S. decreased to 54.6 percent. Do you think lower home seller profit margins will have a material negative impact on rate-and-term and cash-out refinance volumes in 2023?
Rick Sharga: Declining margins on home sales are typically linked to home prices also declining. If homeowners opt to stay put rather than sell their home into a declining market and tap into their equity, they’ll find that they have slightly less equity to tap into than they did six months ago, before mortgage rates doubled and home prices began to weaken. But the difference for the overwhelming majority of homeowners will be marginal — remember that according to our data, 51.5% of homeowners are “equity rich,” meaning that they owe less than 50% of the value of their home on their mortgage. For most homeowners who purchased their home before mortgage rates started to rise, there will still be ample equity for them to get a cash-out refinance loan or a HELOC if they want one. These loans are likely to be the bright spot in an otherwise dismal year for mortgage lenders.
The declining margins on home sales shouldn’t have a material impact on rate-and-term refinance loans simply because there are very, very few homeowners who would benefit from refinancing into a 6.5-7.0% mortgage (approximately 70% of homeowners with mortgages have a rate of 4.0% or below). Volume of these loans has fallen off a cliff since mid-year, and is unlikely to increase until interest rates come down significantly.