Newz: Curiosity and Appraisers, GSEs future, Sideline AMCs
May 23, 2025
What’s in This Newsletter (In Order, Scroll Down)
- LIA AD: Your Role as a Judge’s Appraiser
- On Comparable Sales By Timothy Andersen, MAI
- Futurist Architect’s Funky Spaceship-Inspired ‘Starcastle’ Hits the Market in Connecticut for $1.5 Million
- Why Curiosity Matters in Appraisals
- Mortgage Bankers Association head addresses ‘elephant in the room’
- Bye Bye AMC: A Script to Sideline Appraisal Middlemen
- Mortgage applications decreased 5.1 percent from one week earlier
Real Estate Agents and Comparable Sales – Tips for Appraisers
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On Comparable Sales
By Timothy Andersen, MAI
Excerpts: This short article raises issues related to what constitutes or defines a comparable sale. While it may seem arrogant to take on a topic of this import, it is necessary, since there is not currently a formal definition. There are descriptions of what a comparable sale is. But there is no formal, universally recognized definition¹. However, does there need to be? Do we have enough technical information to understand the concept of a comparable sale? This article suggests the descriptions are sufficient.
It is common for the GSEs to criticize appraisers’ poor choice of comps. Under some conditions, the GSEs’ have the justification to level these critiques. Yet, given the wealth of descriptions there are in the available literature about what constitutes a comparable sale, why do appraisers ignore those descriptions to their own peril?
To read more, Click Here
My comments: Good analysis by Tim, The USPAP Expert. GSEs vs. USPAP goes on and on. I hate it when GSEs tell me how to do my appraisals. I am so glad I quit working for them in 2005. Non-lender appraisals rarely have special requirements and reviews.
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Futurist Architect’s Funky Spaceship-Inspired ‘Starcastle’ Hits the Market in Connecticut for $1.5 Million
Excerpts: 4 bedrooms, 5 baths, 5,036 sq.ft., 23.5 acre lot, built in 1985
Designed for entertaining, the spacious compound also has a guesthouse and a gunite pool.
The out-of-this-world, 5,036-square-foot residence was built in 1985 using sprayed-on polyurethane foam, fireproofing material, and a waterproof polymer finish—a process that makes it look almost like it was crafted from papier-mâché.
Located in New Fairfield, where it is nestled on 23.5 acres, the home overlooks Squantz Pond and Candlewood Lake, and features a one-of-a-kind interior with a curved kitchen, sunken conversation pit, and numerous sculpted elements that jut out from the walls.
To read the listing plus 40 photos and a virtual tour, Click Here
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Why Curiosity Matters in Appraisals
The Power of Curiosity in Appraisal
Excerpts: There’s a familiar story about Steve Jobs that reflects a trait every great appraiser relies on.
At age 12, Jobs cold-called Bill Hewlett, co-founder of Hewlett-Packard, asking for spare computer parts. Hewlett didn’t just send him the parts, he offered Jobs a summer internship. Jobs later reflected:
“Most people never pick up the phone and call. Most people never ask. And that’s what separates the people who do things from the people who just dream about them.”
This quote captures the essence of curiosity in property appraisal. It’s not just about looking at numbers, it’s about digging deeper, asking questions, and connecting with people to understand the full picture.
To read more, Click Here
My comments: I have always been very curious. I love appraising because every property is different. Even if I appraise a property for the second time, market conditions or subject condition may have changed.
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Mortgage Interest Rates from 1900 to 2025
February, 2025 issue of Appraisal Today
Excerpts: The highest and lowest rates
The lowest weekly average mortgage rate for the conventional 30-year,
fixed-rate mortgage was recorded at 2.65% in January of 2021.
The all-time high of 18.63% occured in March of 1981. I purchased my
duplex in December 1986 and got a “low” rate of 15%. The price was $120,000. Today it would be over $1,000,000 and I would not want to pay the significantly higher monthly payment.
Relationship between bonds and mortgage rates – both are long term
investments – similar. When bond yields rise, mortgage rates usually increase as well. When yields fall, mortgage rates generally drop. The reason for this correlation is that both bonds and mortgages are long-term investments, and investors compare them when deciding where to allocate money.
Fed interest rates vs. mortgage rates: Fed rates are overnight – very different
The federal funds rate is the interest rate at which banks lend money to one
another overnight, meaning it’s an interest rate on very short-term lending. Interest rates on other short-term bonds and loans move very closely with changes in the federal funds rate.
The 30-year mortgage, on the other hand, is a long-duration loan and thus
has a different rate at which market participants are willing to lend. This rate is determined in the bond market.
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Mortgage Bankers Association head addresses ‘elephant in the room’
Bob Broeksmit discussed Fannie and Freddie matters at this week’s MBA conference
May 20, 2025
Excerpts: Broeksmit praised the decision in March by Bill Pulte, director of the Federal Housing Finance Agency (FHFA), to rescind an advisory bulletin that called on Fannie Mae and Freddie Mac to conduct unfair or deceptive acts or practices (UDAP) oversight. He also discussed the recent rollback of mortgage industry guidance by the Consumer Financial Protection Bureau.
Toward the end of his prepared remarks, Broeksmit addressed what he termed the “elephant in the room” — the proposed release of Fannie and Freddie from federal conservatorship.
Pulte, the FHFA director who oversees Fannie and Freddie, has made it clear in multiple interviews that he will defer to President Donald Trump regarding any decision on the government-sponsored enterprises’ exit from conservatorship.
Broeksmit said he has had private meetings with Trump administration officials, who made it clear that while a decision on Fannie’s and Freddie’s fates is “on their radar, it’s not a priority.”
“We’ve also heard from Treasury Secretary (Scott) Bessent and Director Pulte that they won’t allow a release that results in higher mortgage rates and costs for borrowers. This is music to our ears,” Broeksmit said, according to the prepared remarks provided by the MBA.
To read more, Click Here
My comments: Good comments from an excellent source: MBA. We all live with a lot of uncertainty, which no one likes. This definitely affects the the number of mortgages that need appraisals.
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Bye Bye AMC: A Script to Sideline Appraisal Middlemen
Excerpts: The “Bye Bye AMC” script, a clever SQL solution, aims to disrupt Appraisal Management Companies by automating merit-based appraiser assignments, slashing AMC fees, and boosting transparency in real estate valuations.
In the high-stakes arena of real estate appraisals, where precision tangoes with red tape, a sharp SQL script named “Bye Bye AMC” is poised to shake up the status quo. Crafted by Chase Pursley, founder of Appraisal Inbox, this code isn’t just a string of queries — it’s a potential death knell for Appraisal Management Companies (AMCs) that have long profited by squeezing appraisers, meddling in valuations, and padding their pockets at the expense of consumers. Let’s dive into why this script could change the game.
Pursley’s “Bye Bye AMC” SQL code is a masterclass in precision and fairness, designed to match appraisers to appraisal jobs without the AMC middleman. Picture it as a digital matchmaker for real estate valuations, but instead of swiping right, it uses geospatial calculations, workload analysis, and round-robin logic to pair properties with the best-suited appraisers.
The implications of “Bye Bye AMC” are seismic. For appraisers, it could mean fairer pay and less pressure to cut corners, as direct assignments eliminate the AMC’s fee-grabbing middleman.
For consumers, it promises lower appraisal costs, higher quality appraisals and greater transparency — imagine your $500 appraisal fee going entirely to a skilled appraiser with local expertise who spent hours analyzing your home, rather than AMCs pocketing most of it to pay the cheapest bidder with little regard for quality or market knowledge.
For lenders, it’s a streamlined, data-driven way to ensure compliance and quality without the AMC baggage.
And for AMCs? Well, they might need to rethink their business model or risk becoming the Blockbuster of real estate.
To read more, plus over 40 appraiser comments including Chase’s comments, Click Here
My comments: Finally a proposed solution to the AMC Mess! Pursley recently did research using ASC data on how many appraisers remain. I wrote about it in this newsletter. Of course, no one knows if this script will be used by any AMCs but maybe a few will get some ideas.
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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.
Mortgage applications decreased 5.1 percent from one week earlier
WASHINGTON, D.C. (May 21, 2025) — Mortgage applications decreased 5.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 16, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 5.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week and was 27 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 13 percent higher than the same week one year ago.
“Mortgage rates jumped to their highest level since February last week, with investors concerned about rising inflation and the impact of increasing deficits and debt,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Higher rates, including the 30-year fixed rate increasing to 6.92 percent, led to a slowdown across the board. However, purchase applications are up 13 percent from one year ago.”
The refinance share of mortgage activity increased to 36.6 percent of total applications from 36.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.1 percent of total applications.
The FHA share of total applications increased to 17.9 percent from 17.4 percent the week prior. The VA share of total applications decreased to 12.6 percent from 13.4 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.92 percent from 6.86 percent, with points increasing to 0.69 from 0.68 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $806,500) increased to 6.94 percent from 6.85 percent, with points increasing to 0.72 from 0.49 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.60 percent from 6.59 percent, with points increasing to 0.96 from 0.89 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 6.21 percent from 6.12 percent, with points increasing to 0.72 from 0.59 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 6.16 percent from 6.09 percent, with points decreasing to 0.36 from 0.74 (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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