Newz: Pulling Comps in 2025, Appraiser Union? AMCs Overcharging Consumers
March 7, 2025
- What’s in This Newsletter (In Order, Scroll Down)
- LIA ad: Problem with An Affidavit
- The struggle of pulling comps in 2025 By Ryan Lundquist
- Op-Ed: Why An Appraiser Union Would Never Work By Dustin Harris
- The Full Measure: February 2025 Housing Market Snapshot for Appraisers By Kevin Hecht
- The Trump Administration’s Regulatory Overhaul: The Impact on CFPB, FHA, and the Housing Industry By Rob Chrisman
- Homebuilders Warn of Rising Building Costs as Trump’s Tariffs on Canada and Mexico Take Effect By NAR
- AMCs Overcharging Consumers? Morgan & Morgan Investigates
- Mortgage applications decreased 1.2 percent from one week earlier
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The struggle of pulling comps in 2025
By Ryan Lundquist
Excerpts:
1) SALES TELL US ABOUT THE PAST
Comps aren’t easy today. The problem is there aren’t that many sales, so it’s not so simple to figure out value. Lately, I’ve been getting a ton of questions about this, so I wanted to share some things I’m doing on my end….
2) TWO OPTIONS TODAY
We have two choices for comps. Go back further in time in the immediate neighborhood, or go out further to competitive areas. Why not do both?…
3) HOW FAR AWAY CAN YOU GO FOR COMPS?
It’s not how far you can go, but where you should go. Read that again. This is true in any market. And where would buyers go for comps? That’s also a viable question. No matter where you’re getting comps, be sure they are a good substitution…
To read lots more plus see graphs and read appraiser comments, Click Here
My comments: Read This Article! Few sales are common in many areas. I prefer going back in time. I have been doing time adjustments since 1975, when prices were going up 5% per month in a semi-rural Northern California county. The GSEs seem to be making it way more complicated. I do them on every appraisal. If not needed, I always comment that the market is stable. It is the only adjustment I make on my non-lender appraisals, except for features that are unusual.
I have no idea why the GSEs complain that many appraisers are not doing them when needed. Maybe the appraisers never learned how? Many dollar adjustments are needed on the grid and can be much more difficult than time adjustments.
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Op-Ed: Why An Appraiser Union Would Never Work
By Dustin Harris
Excerpts: The argument comes up all the time. Appraisers are getting squeezed from all sides—lenders, AMCs, regulators, and now even AI and automation. Meanwhile, other industries, from Hollywood writers to UPS drivers, have secured massive wins through collective bargaining. So, wouldn’t it make sense for appraisers to do the same?
I get it. I really do. I’m as frustrated as anyone by the way appraisers are treated…
The argument comes up all the time. Appraisers are getting squeezed from all sides—lenders, AMCs, regulators, and now even AI and automation. Meanwhile, other industries, from Hollywood writers to UPS drivers, have secured massive wins through collective bargaining. So, wouldn’t it make sense for appraisers to do the same?
I get it. I really do. I’m as frustrated as anyone by the way appraisers are treated.
The NAR Problem: A Case Study in Forced Membership
Before we jump into the union debate, let’s talk about something most of us already deal with: forced membership in the National Association of Realtors (NAR).
A lot of appraisers are required to join NAR just to access the MLS, even though the organization is fundamentally geared toward real estate agents, not appraisers. And what have we gotten for our dues? Not much.
Why Appraisers Resist Unions
I’ve been in this business long enough to know that appraisers don’t fit into the traditional union model. Here’s why: We’re independent by nature…
Are There Better Solutions?
Instead of a union, maybe the answer is stronger advocacy through the organizations we already have—but with real appraiser-focused leadership, not just figureheads who cave to regulators and lenders. Maybe we need a voluntary lobbying fund that gives appraisers a real voice without mandatory dues…
To read more plus appraiser comments, Click Here
My comments: Worth reading. Never-ending appraiser issue. One of the few articles I have read on this topic. My excerpts above only cover a small part of what is written. My solution, of course, is to quit doing lender appraisals. I quit in 2005. Of course I have always accepted non-lender work, commercial and residential, since 1986 when I started my appraisal business.
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The Full Measure: February 2025 Housing Market Snapshot for Appraisers
By Kevin Hecht
Excerpts: This month, we’re witnessing a slight dip in mortgage rates, declining builder confidence, and slowing home sales as affordability constraints persist. Economic uncertainty and shifting policy decisions continue to shape the market, making it more critical than ever for appraisers to remain adaptable.
From my perspective, this is a market in transition. While some might see the slowing of new construction and declining sales as a sign of a downturn, I believe we are instead moving into a period of recalibration. Builders, buyers, and investors are all reassessing their strategies in response to long-term economic realities rather than short-term fluctuations.
Mortgage Rates: A Temporary Decline or a Market Shift?
February saw a modest decline in mortgage rates, with the average 30-year fixed-rate mortgage falling to 6.84%, down from 7.04% in mid-January. While this drop is encouraging, it remains well above the pre-pandemic levels that fueled the housing boom.
I expect mortgage rates to remain relatively high throughout the first half of the year, as the Federal Reserve has signaled that interest rate cuts may not come until the second half of 2025. This means that affordability challenges will persist, keeping many buyers on the sidelines. From an appraisal standpoint, this ongoing hesitation in buyer activity suggests that home prices could stagnate in certain markets, particularly in mid-tier price ranges.
Regional Market Disparities: Not All Markets Are Moving the Same Way
Market conditions continue to vary significantly by region. The Northeast saw the steepest decline in new-home sales, down 60% year-over-year, highlighting affordability challenges. Meanwhile, the South, which remains the largest market for new construction, posted a 14.8% drop in new-home sales from December.
Meanwhile, inflation, Federal Reserve policies, and trade regulations are creating an uncertain environment for the housing industry.
I expect that the market will remain in this holding pattern until there is more clarity on interest rates and economic policy. In the meantime, appraisers should remain vigilant, adaptive, and regionally focused to provide the most accurate and defensible valuations.
To read more, Click Here
My comments: Written by an appraiser for appraisers, who is also an economist. He tells you what trends means for appraisers.
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New in the March, 2025 issue of Appraisal Today:
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- An appraiser gets audited by the IRS. Don’t make my mistakes! by Ann O’Rourke, MAI,SRA, MBA
- Can you use the assessor’s assessment values for site valuation? by Tim Andersen, MAI, MSc
- Make use of your driving time by exercising
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IRS audit: Tax deadline is April 15, coming soon. This article may have some good ideas to help you pay lower income taxes.
Assessment values – Don’t use them for site valuation. I started appraising at an assessor’s office in 1975. Very different than other types of appraisals.
Exercise benefits. I like car exercising. We keep hearing about how exercising can help your health. Some exercise is way better than nothing!
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The Trump Administration’s Regulatory Overhaul: The Impact on CFPB, FHA, and the Housing Industry
By Rob Chrisman
Excerpts: The Trump administration has taken an aggressive approach to downsizing government operations, leading to significant disruptions across various federal agencies. One of the most extreme examples of this strategy has been the near-total shutdown of the Consumer Financial Protection Bureau (CFPB).
The rapid dismantling of federal oversight agencies has created challenges within the housing and mortgage industries. The CFPB, for instance, plays a crucial role in collecting and publishing data necessary for industry compliance. One specific example is the Average Prime Offer Rate (APOR), which is published weekly and used by lenders to determine if loans meet Qualified Mortgage (QM) standards.
Beyond the CFPB, additional cuts are rumored at the FHA and Ginnie Mae, with reports suggesting that as much as half of their respective workforces could be laid off. A particularly concerning development is the potential closure of the National Servicing Center in Oklahoma City, which handles crucial FHA servicing functions.
In summary, the Trump administration’s aggressive downsizing of federal agencies, particularly the CFPB, FHA, and Ginnie Mae, has created uncertainty and potential disruptions within the mortgage and housing markets. While some industry players welcome the rollback of regulations, others fear the unintended consequences of a fragmented regulatory landscape. Whether the administration’s approach results in long-term efficiencies or critical systemic failures remains to be seen, but the impact of these changes will be felt across the financial sector for years to come.
To read more, Click Here
My comments: I have been subscribing to Chrisman’s weekly emails for many years. He focuses on mortgage lending issues and what they mean for industry participants. He is very savvy.
Subscribe to his emails at the bottom of the article above. He often includes humor, which I like
To read recent sample weekly reports, Click Here
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Homebuilders Warn of Rising Building Costs as Trump’s Tariffs on Canada and Mexico Take Effect
By NAR
Excerpts: “This move to raise tariffs by 25% on Canadian and Mexican goods will harm housing affordability,” National Association of Homebuilders Chairman Buddy Hughes tells Realtor.com®. “Tariffs on lumber and other building materials increase the cost of construction and discourage new development, and consumers end up paying for the tariffs in the form of higher home prices.”
About 70% of the dimensional lumber and drywall gypsum used in residential construction is imported from Canada and Mexico respectively, according to industry data. China is a source of some fixtures and finishes used in homes, though it is a less significant player in the homebuilding supply chain.
“Rising costs due to tariffs on imports will leave builders with few options,” says Realtor.com Chief Economist Danielle Hale. “They can choose to pass higher costs along to consumers, which will mean higher home prices, or try to use less of these materials, which will mean smaller homes.”
To read more, Click Here
My comments: What does this mean for you? Do you ever do the Cost Approach for new construction? Keeping up on the most recent data is very important, especially if you use builders estimates so you have what is really happening in your local market.
Also, new home prices are forecast to go down. Varies widely.
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AMCs Overcharging Consumers? Morgan & Morgan Investigates
Excerpts: Morgan & Morgan, a prominent law firm, is currently investigating the practices of Appraisal Management Companies (AMCs) and their potential role in driving up the cost of appraisals for consumers. The firm is actively seeking input from individuals who believe they have been overcharged or misled about the allocation of their appraisal fees between the AMC and the appraiser. At the heart of this investigation lies the concern over a lack of transparency, inflated costs, and questionable value that AMCs bring to the appraisal process.
The Appraisal Regulation Compliance Council (ARCC) has conducted extensive research on this matter, revealing alarming findings that underscore the significant impact on consumers. According to the ARCC, the median average fee charged by AMCs to borrowers constituted a staggering 65% of the total appraisal fee.
In some egregious cases, AMCs pocketed up to 84% of the total fee, leaving appraisers with a disproportionately small share. This means that consumers have been essentially overpaying for appraisals, with a substantial portion of their fees lining the pockets of AMCs rather than compensating the appraisers for their expertise and services rendered.
To read more, Click Here
For more info on ARCC, go to www.arcc-usa.org
The Appraisal Regulation Compliance Council (ARCC) is a nonpartisan, nonprofit academic research organization dedicated to helping consumers and policymakers navigate the complex policies that shape mortgage regulations, market valuations and housing affordability. ARCC provides evidence-based research, commentary and analysis that highlight appraisers’ duty to uphold the public trust.
My comments: Cyndi Chance, the former CEO of the Appraisal Institute, is on the ARCC board of directors. Lori Noble, SRA, is a Co-Founder and Director.
When I first heard about ARCC I checked them out. Instead of the usual appraiser whining about AMCs it focuses on the reliable data they have on AMCs. I called an appraiser I knew who was on the board of directors and also spoke with Joshua Tucker, Co-Founder and Director.
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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, Click Here.
Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample go to www.appraisaltoday.com/order Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.
My comments: Rates are going up and down. We are all waiting for rates to drop in 2025.
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Mortgage applications decreased 1.2 percent from one week earlier
WASHINGTON, D.C. (February 26, 2025) — Mortgage applications decreased 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 21, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week and was 45 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 0 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 3 percent higher than the same week one year ago.
“Treasury yields moved lower on softer consumer spending data as consumers are feeling somewhat less upbeat about the economy and job market. This pushed mortgage rates lower, with the 30-year fixed rate decreasing to 6.88 percent, the lowest rate since mid-December,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Applications were about one percent lower for the week, which included the President’s Day holiday, as purchase applications stayed flat from a week ago while refinance applications saw a small decline. Purchase applications were up 3 percent from the same week last year. Increasing for-sale inventory in some markets has provided prospective buyers more options as we approach the spring homebuying season.”
Added Kan, “Although overall refinance application activity remained fairly weak, FHA refinance applications saw an 8 percent increase over the week. Compared to last year, overall refinance applications were up 45 percent.”
The refinance share of mortgage activity increased to 38.9 percent of total applications from 38.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 5.4 percent of total applications.
The FHA share of total applications increased to 17.4 percent from 16.6 percent the week prior. The VA share of total applications decreased to 13.4 percent from 14.2 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.88 percent from 6.93 percent, with points decreasing to 0.61 from 0.66 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) decreased to 7.00 percent from 7.03 percent, with points decreasing to 0.37 from 0.53 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.57 percent from 6.70 percent, with points decreasing to 0.80 from 0.87 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.25 percent from 6.31 percent, with points decreasing to 0.59 from 0.70 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs decreased to 6.05 percent from 6.08 percent, with points decreasing to 0.44 from 0.77 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The survey covers U.S. closed-end residential mortgage applications originated through retail and consumer direct channels. The survey has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, thrifts, and credit unions. Base period and value for all indexes is March 16, 1990=100.
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Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone: 510-865-8041
Email: ann@appraisaltoday.com
Online: www.appraisaltoday.com
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