Banker & Tradesman Jan. 21, 2019

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MORTGAGE OUTLOOK Turn to page 9 for Banker & Tradesman’s coverage of the mortgage market outlook for 2019.

THE FINANCIAL SERVICES AND REAL ESTATE WEEKLY FOR MASSACHUSETTS BY THE NUMBERS

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County close-up: Bristol Spotlight: North Attleborough

IN PERSON

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Five years ago, Belmont Savings Bank CEO and UMass Amherst alumni Bob Mahoney reached out to the dean of the Isenberg School of Management to fill a marketing manager role. Kayla Gaspar, a marketing major at UMass at the time, was immediately intrigued by the opportunity to work in marketing.

WEEK OF MONDAY, JANUARY 21, 2019

BANKING BY THE NUMBERS

TRENDS FOR 2019

4.45 percent The Freddie Mac mortgage rate as of Jan. 10. See Bram Berkowitz’s story on page 1 for how this will impact the mortgage market in 2019. Source: Freddie Mac

$12.2 million

3 percent The down payment required under certain first-time homebuyer programs. See David Brennan’s column on page 10 for how this could impact the mortgage industry in 2019. Source: MassHousing

50% The share of Belmont Savings Bank branches located in grocery stores. See In Person on page 8 for the marketing opportunities BSB Vice President Kayla Gaspar finds in this structure. Source: Belmont Savings Bank

50,000 The increase in Massachusetts households earning over $100,000 since 2009.See Robert Brown’s column on page 5 for more on how this will affect the commercial real estate industry. Source: U.S. Census Bureau

$100,000 The fine levied by the Consumer Financial Protection Bureau in what could prove to be a landmark cybersecurity regulation case. See Ben Giumarra’s column on page 5 for more. Source Consumer Financial Protection Bureau

48 The number of data points many mortgage originators must collect under new HMDA regulations. See Bram Berkowitz’s story on page 1 for how this could impact the mortgage industry. Source: Home Mortgage Disclosure Act

>1 With partnerships, incoming Massachusetts Mortgage Bankers Association President John Broderick says mortgage originators can become greater than the sum of their parts. See Mortgage Outlook on page 9. Source: John Broderick

FED RATE HIKES, PURCHASE MARKET WILL BE BIG MORTGAGE ISSUES IN 2019 As Market Begins to Normalize, Buyers Have Better Chance of Success BY BRAM BERKOWITZ BANKER & TRADESMAN STAFF

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assachusetts’ mortgage market had a busy year in 2018, not only dealing with four rate hikes from the Federal Reserve, but also record home values and a continued lack of inventory that could not keep pace with demand. The median sale price for a singlefamily home maxed out at $420,000 in June, according to analysis from The Warren Group, publisher of Banker & Tradesman. Total sale volume was also highest that month, with more than 7,200. By December, the median sale price for a single-family home in Massachusetts had dipped to $360,000, the

An Eye on the Fed

As always, everyone will be watching the Fed. Rate hikes from last year started to impact the market and could continue to do so in 2019. The Fed raised its benchmark federal funds rate at the end of December to a range of 2.25 to 2.5 percent. “People are timid on what the future holds,” said Ryan Morgan, senior loan officer at Rockland-based Mortgage Corp. East “When rates went up in the fall, it scared a lot of people.”

Federal Reserve Chairman Jay Powell speaks at Catholic University Law School in 2015.

The Fed does not directly set mortgage rates, but as the federal funds rate – the rate that U.S. financial institutions lend to one another – goes up, banks pass on the higher cost to the consumer. The Federal Reserve has projected another two rate hikes in 2019, although if a downturn in the global economy spills into the U.S., it’s very possible there will be no more rate hikes in this cycle. Freddie Mac had the 30-year fixed rate mortgage rate at 4.45 percent as of Jan. 10, and predicted in November that mortgage rates will average 5.1 percent in 2019. Although still at historically low levels, this is the first time Millennials are seeing interest

Continued on Page 10

COMMERCIAL INTERESTS

1031 EXCHANGE ON STEROIDS

Boston Proposal to Tax ‘Flippers’ Is Anything but Bold

Opportunity Zones Unlikely to Spark Job Boom

Oh, Those Courageous Councilors! By Scott Van Voorhis | Banker & Tradesman Columnist

Unless otherwise noted, all data is sourced from The Warren Group’s Mortgage Market Share Module, Loan Originator Module, Statistics Module and/or proprietary database. For more information please visit www.thewarrengroup.com/business/datasolutions.

same median sale price as December 2017. The median sale price for the year was $385,000, $20,000 higher than the median sale price for 2017. The industry in the coming year will continue to watch how the Fed deals with interest rates, the continued shift to a purchase market and how regulation will impact the speed of closing.

Courtesy of the Federal Reserve

Nineteen projects in Massachusetts have received nearly $12.2 million in financing from the Federal Home Loan Bank of Boston. See Week on the Web, page 2. Source: Federal Home Loan Bank of Boston

Commercial Real Estate PAGE 3

A Tax Treat for Multifamily Investors By Steve Adams | Banker & Tradesman Staff

Commercial Real Estate PAGE 7


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