WASHINGTON – Mortgage applications for new home purchases increased 6.2% in March compared to a year ago and 1% compared to a month ago, according to the Mortgage Bankers Association’s Builder Application Survey (BAS). The change does not include any adjustment for typical seasonal patterns.

The monthly increase underscores the impact higher home prices and mortgage rates continue to have on buyers, Joel Kan, MBA’s vice president and deputy chief economist, said.

“March is typically a month when new home purchases see a seasonal boost, but this year March applications for new home purchases saw less than a one percent increase over the prior month on an unadjusted basis,” he said. “Applications were still ahead of last year’s pace, but at 6 percent, the annual growth rate was the slowest since September 2023.

Kan said the FHA share of applications increased in March – exceeding 26% compared to a 24% average for the prior 12 months.

“A higher FHA share can be a sign of more first-time buyer activity, but that segment of buyers is also more sensitive to affordability challenges,” he said.

Added Kan, “MBA’s estimate of new home sales fell more than 10% over the month to a seasonally adjusted pace of 615,000 units, the slowest annual pace in four months.”

MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 615,000 units in March 2024. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for March is a decrease of 10.7% from the February pace of 689,000 units. On an unadjusted basis, MBA estimates that there were 60,000 new home sales in March 2024, a decrease of 3.2% from 62,000 new home sales in February.

By product type, conventional loans composed 63.0% of loan applications, FHA loans composed 26.4%, RHS/USDA loans composed 0.3% and VA loans composed 10.4%. The average loan size for new homes decreased from $405,719 in February to $405,400 in March.

MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application. 

© 2024 Florida Realtors®

MIAMI – A new sugar cube house sits in a slice of Miami called Silver Bluff, a sleepy residential neighborhood between Coral Gables and Coconut Grove. Rising above land on stilts and a roof adorned with solar panels, it stands out in a neighborhood filled with houses surrounded by chain-link fences and pitched rooftops with shingles the shade of sunset orange.

Inside, the new house has extra insulation to block indoor and outdoor noise, an expansive kitchen to entice residents to cook healthy meals, and temperature controls in each bedroom to promote a better night’s sleep (the ideal is 66 to 68 degrees, health experts say).

Outside and below the house, a barbecue area has an electric grill, bathroom, and covered patio with a wood-look-alike ceiling made from rice hulls. The outdoor lounge and a two-car driveway are surrounded by groomed landscaping requiring minimal watering, including Geiger trees with tangerine-colored flowers, silver buttonwood, and coontie palm, what early Miami residents used to grow to boil and eat as their starch.

Before its future owners have even moved in, the three-bedroom, three-bathroom home’s sustainable, health-conscious design earned it a prestigious recognition in late March.

The 2,595-square-foot house called CM1 by architect-development firm Caplow Manzano became the first in the world to be certified by the International WELL Building Institute (IWBI). The Manhattan-based organization sets the gold standard for health-conscious design. It gave its first certificate in 2014, recognizing commercial buildings.

The WELL certificate and the completion of what a healthy and sustainable house can look like will likely drive demand for similar designs, said Marta Schantz, Urban Land Institute’s co-executive director of the Randall Lewis Center for Sustainability in Real Estate.

“This is not green washing. This certification is incredibly meaningful in terms of the different aspects of the building. To see this happen for a single-family home is tremendous, to see this in a residence is tremendous,” Schantz said. “The fact that the certification is available may start a wave that other building owners may say they want that, too.”

Coconut Grove-based Caplow Manzano’s first development at 2662 SW 32nd Ct. will land on the market in April for $2.6 million.

Journey to WELL certificate

In January, the International WELL Building Institute announced it added a new category focused on single-family homes. To earn a certificate, a house had to check at least 40 out of 150 points from a list of qualities meant to improve the health of the dweller.

The nearly completed CM1 earned the first certificate thanks to landing 58 points — among the highest marks among the 30,000 applicants worldwide — and for showcasing a resilient design given climate change.

“We are thrilled to honor this home as the very first. We were incredibly impressed by the commitment of Caplow Manzano to balance goals related to climate change, sustainability and health,” said Rachel Hodgdon, WELL CEO.

“The goal for being a healthy home and resilient are inextricable,” she said. “These are homes built to survive the times. Should there be major flooding or sea levels this would be a home meant to survive.”

Sick days inspire design

The house is the brainchild of Caplow Manzano, a firm launched by co-founders Nathalie Manzano, 41, and Ted Caplow, 54. The wife-and-husband duo launched their firm in 2017 after working together at Caplow’s now-closed science nonprofit CappSci, or Caplow Applied Science. The duo’s most well-known project at the time was the Miami Science Barge, a floating, self-sustaining, solar-powered experimental ecosystem that raises fish and vegetables and functions as outdoor classroom and science lab.

The inspiration for CM1 came with the couple’s first home. After marrying in 2020, Manzano and Caplow moved into a newly constructed modern-style home in Coconut Grove where they could blend their families. Both previously married and divorced, Manzano and Caplow have a total of five kids. Within the first year, every family member had allergy-like flareups, including congestion and postnasal drip.

In search for the source of the health hiccups, Caplow ended up in one of his daughter’s rooms where he found mildew streaks around the light switches and outlet covers, indicating humid air was moving through the walls.

“That’s when it hit me that I didn’t want to share my house with all of this mysterious void space and all of these dark corners and all of these weird materials in the walls. I just want a house,” Caplow said. “We started thinking about could we take all of that out. Can we do away with the cavity wall, the drywall and just have, you know, surfaces I can look at — concrete floor, concrete ceiling, panels — that I can remove so I can get the feeling of what’s going on, peace of mind. For me that’s what tipped the balance.”

Today, the family still lives in the same Grove home, but their experiences there moved them to launch a series of residential projects abiding by their design philosophy — hypostruction — focused on eliminating void space and toxic construction materials.

They put their philosophy to the test with CM1. With the help of Robert Vick Architect and some inspiration from the historic Farnsworth House in Illinois, the team designed a house with minimal void spaces, replacing drywall with cement blocks, exposing air conditioning ducts, and placing pipes and wiring behind removable Purebond plywood panels.

“Lots of people are worried about healthy eating, organic food, the chemicals that go into their water or their food, but not really thinking about how those same kinds of chemicals are existing in their environment, which they live in, they sleep in,” Manzano said, “so thinking about that in the space was really important.”

The couple brought their vision to life in Silver Bluff, far off the water, to show that even inland residences should be thinking about floods and rising waters, Caplow said.

They bought a dilapidated house on the 6,000-square-foot site for $295,000, demolished it, and launched construction on their self-funded project in 2022. It cost them about $2 million to build. After the sale, the firm will barely make a profit, surely not enough to sustain themselves and their team of 12 employees.

“We’re taking a long-term view on profits for our company,” Manzano said, “If you had a technology start-up, that’s how you’d view it. …You need to build the product, get people excited, create demand, and then we’ll be able to focus on the profit.”

CM1 is one of a total of seven Caplow Manzano have in the pipeline, including one breaking ground in six months in the MiMo District and another under permitting in Coconut Grove. If the Silver Bluff house garners its listing price of $2.6 million, CM1 will be among the highest residential sales in the neighborhood. One comparable sale on a 7,150-square-foot property sold for $2.2 million a year ago. It was a 2,990-square-foot new single-story house with four bedrooms and four bathrooms at 2136 SW 25th St.

The lure of sustainable living

Already, prospective buyers looking to move to South Florida from Illinois, New York and California have booked tours to see CM1 in the next few weeks.

“Some of the highest sales in the city have been forward-thinking properties,” said Danny Hertzberg, co-listing agent with the real estate brokerage firm Jills Zeder Group. “I have seen in my career that there are properties that push the market forward.”

Sustainable designs have long been on the minds of local architects and developers, including for sought-after architects like Rene Gonzalez. But healthy homes became a priority during the pandemic.

“When we think of healthy buildings the different benefits include better health quality, different perspectives that make a difference in peoples’ lives,” said Schantz, adding COVID was an inflection point. “Before COVID, who paid attention to a building’s air quality monitors? That was a scientific thing. But that became a mainstream thing after COVID.”

For Caplow Manzano, CM1 is only the beginning. Their other projects all aim to deliver a healthy, sustainable abode for its future residents and a model for how others may want to build in Miami-Dade.

“We were trying to think of the future of Miami and not just Miami, but homes in the urban tropics,” Manzano said. “Miami looks like a lot of what the rest of the world facing climate change looks like in terms of weather, in terms of density. We wanted to rethink the way we were building here.”

©2024 Miami Herald. Visit miamiherald.com. Distributed by Tribune Content Agency, LLC.

OKEECHOBEE, Fla. – Lake Okeechobee is on track to start the wet season above 14 feet in June. What does that mean for the coming hurricane season?

Despite the approach of one of the worst hurricane seasons ever predicted, the U.S. Army Corps of Engineers has stopped the large-scale releases from Lake Okeechobee, an effort designed to lower the big lake before the storm season hits.

Colorado State University tropical meteorology Project predicts 23 named storms with 11 hurricanes in 2024. Forecasters predict five of the hurricanes will reach Category 3 or stronger.

The report, released April 4, predicts the highest number of storms forecast since 1996.

The El Nino weather pattern, which brought higher than normal rainfall during Florida’s normal “wet” season is expected to become a La Nina weather pattern, which usually enhances the chance of tropical storms.

Forecasters also point to record warm water temperatures in the Atlantic Ocean, which could increase both the number and severity of storms.

Despite concerns for the increased danger of flooding in the coming hurricane season, the U.S. Army Corps of Engineers (USACE) reverted to the earlier dry season strategy, with no lake releases east to the St. Lucie River and releases to the Caloosa-hatchee River limited to beneficial flow.

In an April 5 media briefing, Major Cory Bell, deputy commander for the USACE Jacksonville District, said lake releases to the Caloosahatchee River and St. Lucie were paused March 30 to give the coastal estuaries a chance to recover. High volume freshwater releases lower the salinity in the estuaries which can damage the ecosystems.

Before March 30, rainfall in the Caloo-sahatchee River basin was sufficient to provide freshwater flow to the river. However, since that date, the area has been dry, Bell explained. He said there was zero flow at the Ortona Lock and W.P. Franklin Lock for several days, This stagnant condition increases the risk of algal blooms.

Starting April 6, the corps resumed releases to the Caloosahatchee River at a flow rate of 650 cubic feet per second, measured at the W.P. Franklin Lock. During the dry season, the river often needs freshwater flow from Lake O to prevent the salinity level in the estuary from rising too high. The South Florida Water Management District (SFWMD) has set the minimum flow target at the W.P. Franklin Lock at 457 cfs. In the past, Lee County officials have asked for a minimum of 800 to 1, 000 cfs.

Bell said after consulting with SFWMD scientists, as well as Lee County and Sani-bel-Captiva officials, USACE set the target flow rate for the Caloo-sahatchee at the beneficial flow rate 2, 000 cfs, starting April 13. This flow is a combination of local basin runoff and lake releases (if needed). The Franklin Lock is more than 40 miles from the Julian Keen Jr. Lock at Moore Haven, where lake water enters the river. If local basin runoff meets or exceeds the 2, 000 cfs target, no water will be released from Lake O. USACE will not release any lake water to the St. Lucie, Bell said, unless FPL needs lake water for its cooling pond. Some lake water may be released to the St. Lucie Canal if needed for water supply in that basin or to keep the canal at the optimal depth for navigation of 14 feet to 14.5 feet.

South of Lake Okeechobee, flow under the Tamiami Trail was averaging about 1, 800 cfs on April 5, Bell said.

USACE closed the S-12 A and B water control structures on April 1, as required by federal law to protect the nesting area of a sub-population of the Cape Sable Seaside Sparrow.

© Copyright 2024 Lake Okeechobee News, all rights reserved.

LOS ANGELES — Prospective homebuyers are facing higher costs to finance a home with the average long-term U.S. mortgage rate moving above 7% this week to its highest level in nearly five months.

The average rate on a 30-year mortgage rose to 7.1% from 6.88% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.39%.

When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford at a time when the U.S. housing market remains constrained by relatively few homes for sale and rising home prices.

“As rates trend higher, potential homebuyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year,” said Sam Khater, Freddie Mac’s chief economist. “Last week, purchase applications rose modestly, but it remains unclear how many homebuyers can withstand increasing rates in the future.”

After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage had remained below 7% since early December amid expectations that inflation would ease enough this year for the Federal Reserve to begin cutting its short-term interest rate.

Mortgage rates are influenced by several factors, including how the bond market reacts to the Fed’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

But home loan rates have been mostly drifting higher in recent weeks as stronger-than-expected reports on employment and inflation have stoked doubts over how soon the Fed might decide to start lowering its benchmark interest rate. The uncertainty has pushed up bond yields.

The yield on the 10-year Treasury jumped to around 4.66% on Tuesday — its highest level since early November — after top officials at the Federal Reserve suggested the central bank may hold its main interest steady for a while. The Fed wants to get more confidence that inflation is sustainably heading toward its target of 2%.

The yield was at 4.64% at midday Thursday after new data on applications for unemployment benefits and a report showing manufacturing growth in the mid-Atlantic region pointed to a stronger-than-expected U.S. economy.

Mortgage rates have now risen three weeks in a row, a setback for home shoppers this spring homebuying season, traditionally the housing market’s busiest time of the year.

Sales of previously occupied U.S. homes fell last month as home shoppers contended with elevated mortgage rates and rising prices. 

While easing mortgage rates helped push home sales higher in January and February, the average rate on a 30-year mortgage remains well above 5.1%, where was just two years ago.

That large gap between rates now and then has helped limit the number of previously occupied homes on the market because many homeowners who bought or refinanced more than two years ago are reluctant to sell and give up their fixed-rate mortgages below 3% or 4%.

Many economists still expect that mortgage rates will ease moderately later this year, though forecasts generally call for the average rate on a 30-year home loan to remain above 6%.

Meanwhile, the cost of refinancing a home loan also got pricier this week. Borrowing costs on 15-year fixed-rate mortgages, often used to refinance longer-term mortgages, rose this week, pushing the average rate to 6.39% from 6.16% last week. A year ago it averaged 5.76%, Freddie Mac said.

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

ORLANDO – Florida’s housing market in March and the first quarter (1Q) of 2024 reported more new listings, higher median sales prices and increased for-sale inventory (active listings) compared to a year ago, according to Florida Realtors®’ latest housing data.

“Persistently high mortgage interest rates hovering well above 6% continue to challenge buyers in Florida, especially first-time buyers,” said 2024 Florida Realtors® President Gia Arvin, broker-owner with Matchmaker Realty in Gainesville. “While we are seeing an increase in new listings and in for-sale inventory, home sellers thinking of moving – whether it’s downsizing or needing a larger home – are also impacted by the higher rates when considering their next home purchase.

Last month, closed sales of existing single-family homes statewide totaled 23,435, down 10.4% year-over-year, while existing condo-townhouse sales totaled 9,332, down 16.6% over March 2023. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

For 1Q 2024, statewide existing single-family home sales totaled 57,326, down 3.7% from 1Q 2023, while statewide existing condo-townhouse sales totaled 22,811, down 8.5% from the same quarter a year ago.

The statewide median sales price for single-family existing homes in March was $420,600, up 3.9% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $330,000, up 3.1% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

“Home price growth remained fairly calm by recent standards during the month of March,” said Florida Realtors Chief Economist Dr. Brad O’Connor. “Also, more homes were listed on Florida’s multiple listing services this March than in March 2023, but the year-over-year changes were more modest than what we saw in January and February. New listings of single-family homes were up 7.7% in March, well off the pace of nearly 17% in January and over 28% in February. In the townhouse and condo category, year-over-year growth in new listings in March was 11%, compared to over 31% in January and about 30% in February.”

He noted, “This slowdown in the rate of new listing growth meant that while inventory increased from the end of February to the end of March, it increased more slowly than it did in most recent prior months. Still, in a normal market, we usually expect inventory levels to decline from the end of February to the end of March.”

For 1Q 2024, the statewide median price for single-family homes was $415,000, up 3.8% year-over-year; the statewide median price for condo-townhouse properties was $325,500, up 2.8% year-over-year.

On the supply side of the market, inventory (active listings) rose in March as well as for 1Q 2024. Single-family existing homes were at a 4.1-months’ supply while condo-townhouse properties were at a 6.6-months’ supply for both timeframes.

To see the full statewide housing activity reports, go to the Florida Realtors Newsroom and look under Latest Releases or download the March 2024 and 1Q 2024 data report PDFs under Market Data.

© 2024 Florida Realtors®

LOS ANGELES — The spring homebuying season is off to a sluggish start as home shoppers contend with elevated mortgage rates and rising prices.

Sales of previously occupied U.S. Homes fell 4.3% in March from the previous month to a seasonally adjusted annual rate of 4.19 million, the national association of realtors said Thursday. That’s the first monthly decline in sales since December and follows a nearly 10% monthly sales jump in February.

Existing home sales also fell 3.7% compared with march last year. The latest sales still came in slightly higher than the 4.16 million pace economists were expecting, according to FactSet.

Despite the pullback in sales, home prices climbed compared with a year earlier for the ninth month in a row. The national median sales price rose 4.8% from a year earlier to $393,500.

While the supply of homes on the market remains below the historical average, the typical increase in homes for sale that happens ahead of the spring homebuying season gave home shoppers a wider selection of properties to choose from.

At the end of last month, there were 1.11 million unsold homes on the market, a 4.7% increase from February and up 14.4% from a year earlier, the NAR said.

Even so, the available inventory at the end of last month amounted to a 3.2-month supply, going by the current sales pace. That’s up from a 2.9-month supply in February and a 2.7-month supply in March last year. In a more balanced market between buyers and sellers, there is a 4- to 5-month supply.

“Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves,” said Lawrence Yun, the Nar’s chief economist. “There are nearly 6 million more jobs now compared to pre-covid highs, which suggests more aspiring home buyers exist in the market.”

Mortgage rates have mostly drifted higher in recent weeks as stronger-than-expected reports on employment and inflation stoked doubt among bond investors over how soon the federal reserve will move to lower its benchmark interest rate.

After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has remained below 7% since early December, but also hasn’t gone below the 6.6% it averaged in mid-January. When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford.

Mortgage rates are influenced by several factors, including how the bond market reacts to the federal reserve’s interest rate policy and the moves in the 10-year treasury yield, which lenders use as a guide to pricing home loans.

The yield on the 10-year treasury jumped to around 4.66% on Tuesday — its highest level since early November — after top officials at the federal reserve suggested the central bank may hold its main interest steady for a while. The central bank wants to get more confidence that inflation is sustainably heading toward its target of 2%.

Copyright 2024 the associated press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

MIAMI – The national median home price is twice what it was ten years ago. Molded by a storm of inflation, tight supply and surging demand, the average home price in the U.S. went from around $200,000 to $400,000, according to a new study from Point2.

However, in Florida, it took much less than a decade for home prices to achieve a twofold increase.

Average home values across Florida have undergone a seismic transformation, doubling in value within the short span of just six years. This surge, saw Miami’s average home price soar from around $290,000 in 2018 to the current median of $583,000. In Tampa, homes went from $213,500 in 2018 to $430,000.

For their study, analysts looked at historical data to calculate how many years it took for home prices in the 100 largest U.S. cities to double — and Tampa tied with Miami for having the third fastest price doubling among the country’s largest cities.

The trend of rapid price doubling extended to other big Florida cities, with home prices in St. Petersburg, Orlando and Jacksonville, increasing twofold in the past six to eight years.

Median home prices in St. Petersburg doubled within 6.6 years. In Orlando home prices doubled within 7.5 years — and in Jacksonville it took 7.9 years to see a twofold increase.

The research notes that, “Fluctuating mortgage rates, steep property prices, or supply deficits are no new challenges. But they have never unleashed such a rapid-fire onslaught on homebuyers in the U.S. as they have in today’s housing market.”

Orlando and Tampa also secured spots among the top 10 hottest markets in 2024, according to Zillow’s latest report, which reveals they boast a blend of swiftly selling homes on the market, an abundance of potential buyers, the expectation of stable home values and job growth relative to new construction.

Among the top 10 states attracting new construction buyers, Florida draws significant attention, with approximately one in every eight new construction buyers opting to purchase their homes in the Sunshine State. In November, the U.S. Census Bureau reported that for the year, more than 1.5 million new residential construction projects broke ground across the state — a 9.3% increase from the year prior.

But across the country, what state doubled its median home price the fastest? That would be Detroit, Michigan, where it took just 4.9 years for home prices to increase twofold. At the start of 2019, you could buy a home in the Motor City for $40,000 — but as of March 2024, the median sale price of homes there is $80,163.

Similarly, in the second-place spot, data shows that prices also doubled quickly in Spokane, Washington, where not that long ago, in March 2018, a home cost just $184,500 as compared to $371,000 today.

©2024 Advance Local Media LLC. Visit gulflive.com. Distributed by Tribune Content Agency, LLC.

WASHINGTON — Consumer sentiment about the U.S. economy has ticked down but remains near a recent high, with Americans’ outlook largely unchanged this year.

The University of Michigan’s consumer sentiment index, released Friday in a preliminary version, slipped to 77.9 this month, down from March’s figure of 79.4. Sentiment is about halfway between its all-time low, reached in June 2022 when inflation peaked, and its pre-pandemic averages. The survey has been conducted since 1980.

“Consumers are reserving judgment about the economy in light of the upcoming election, which, in the view of many consumers, could have a substantial impact on the trajectory of the economy,” said Joanne Hsu, director of the consumer survey.

The index had dropped to 61.3 as recently as November before jumping in the following two months by the most in more than three decades. It has since moved mostly sideways.

Stronger consumer optimism can sometimes translate into more spending, which typically boosts the economy. Most economists expect consumer spending to remain healthy as long as the job market stays strong.

“Looking beyond the recent minor monthly volatility, sentiment remains on a rising trend,” Oren Klachkin, an economist at Nationwide, said in a research note. “It’s still a positive environment for the consumer.”

An increase in gas prices likely contributed to the decline in consumers’ outlook, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics. The average national price of a gallon of gas has jumped about 7% from a month ago, according to AAA, to $3.63 a gallon.

Americans’ perceptions of future inflation also rose, probably reflecting still-high prices. Consumers expect inflation to be 3.1% a year from now, which would exceed the Federal Reserve’s 2% target. Still, that would be below the current level of 3.5%.

Inflation has tumbled from a peak of 9.1% in the summer of 2022 but has remained elevated so far this year. Prices excluding volatile food and energy costs, rose 3.8% in March from a year earlier, the same as in the previous month and well above the Fed’s target.

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

WASHINGTON – Fannie Mae and Freddie Mac said Monday they will not count buyer agent commissions as part of allowable interested party contributions (IPCs).

The government-sponsored agencies (GSEs) said their guidance was not an update to their selling guidelines but a clarification to the treatment of seller-paid real estate agent fees.

“Buyer agent fees have historically been fees customarily paid by the property seller or property seller’s real estate agent, and, as such, they are currently excluded from these financing concession limits. If these fees continue to be customarily paid by the property seller according to local convention, they will not be subject to financing concessions limits,” Freddie Mac said in a statement.

Fannie Mae said in a statement, “If a seller or seller’s real estate agent continues to pay the buyer’s real estate agent commission in accordance with local common and customary practices, these amounts are not required to be counted towards the IPC limits for the transaction.”

In March, the National Association of Realtors® announced a proposed $418 million settlement agreement to the Sitzer-Burnett verdict that would end litigation of claims brought by home sellers related to broker commissions.  

After the settlement announcement, NAR and the Mortgage Bankers Association of America asked the Federal Housing Finance Agency to confirm its position on buyer agent compensation and IPC limits. NAR and the MBA called it a “critical piece of the post-settlement puzzle.”

The clarification confirms that buyers whose agents are compensated by the seller will continue to have access to financing through the GSEs, Ken Fears, NAR’s director of conventional housing finance and valuation, said.

“Furthermore, so long as it remains ‘customary’ for the seller to pay commissions, those will not be added to the interested party contributions (IPC) and subject to the caps on IPCs,” he said.

 “NAR will continue to press for access to affordable financing options and keep you up to date on any changes,” he said.

© 2024 Florida Realtors®