Finance
Mortgage lending took a huge dip in Q4, but there’s hope for spring housing: report
Housing supply is improving as the spring home buying season nears. (iStock)
Mortgage lending continued to drop considerably in the fourth quarter of 2023, but a recent report indicates that a turnaround is coming.
High home prices, soaring borrowing costs and low housing supply drove lending rates to a two-decade low, with activity down 16.5% from a year earlier and 67.7% from a high point hit in the first quarter of 2021, according to the report by ATTOM. Lenders issued $417.4 billion of residential mortgages in the fourth quarter of 2023, a drop of 14.9% from the third quarter of 2023 and 18.6% from the fourth quarter of 2022.
However, home lending surged nearly 30% in the spring of last year and the rate could increase again this spring if mortgage rates continue to decline as predicted and housing supply improves.
“Multiple powerful forces continued to conspire against the mortgage industry during the fourth quarter, slicing back huge portions of their business,” ATTOM CEO Rob Barber said. “There were signs during the peak buying season of 2022 that things were starting to turn around, with increases in purchase, refinance and HELOC deals. That could happen again this year as we head into this year’s peak period, especially with interest rates coming down recently.
“But the fourth-quarter numbers revealed continued gloomy times for lenders, no matter how you sliced the pie,” Barber continued.
Homebuyers can find better mortgage rates by shopping around and comparing options. Visiting an online marketplace like Credible can help you compare rates, choose your loan term and get preapproved by multiple lenders at once.
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Supply builds as spring nears
Realtor.com economists predict that mortgage rates will slide into the 6% territory in 2024. Fannie Mae expects mortgage rates to decline gradually over the next two years, reaching 6.9% for the 30-year mortgage by 2025. At the same time, First American economists noted that mortgage rates will hover in the 6.5% to 7.5% range.
The dip in rates could help build some much-needed housing supply. Some homeowners are already selling, according to a recent Redfin report. New listings rose 13% from a year earlier nationwide during the four weeks ending March 3, the most significant increase in nearly three years. Home prices have also lost some momentum. Roughly 5.5% of home sellers dropped their asking price, the highest share of any February since at least 2015.
“There have been two major obstacles for homebuyers over the last year: low inventory and high housing costs,” Redfin Economic Research Lead Chen Zhao said. “Now, the first barrier is starting to come down as more supply comes on the market. Housing costs are still high, but they’re likely to come down a bit as mortgage rates gradually decline through the year and price growth loses some steam.
“Buyers who can afford today’s mortgage rates may have better luck finding a home now than they have in the past several months, and they also may be less likely to face competition because inventory is improving,” Zhao continued.
If you’re looking to become a homeowner, you could still find the best mortgage rates by shopping around. An online marketplace like Credible can help you compare your options.
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Creative avenues for home affordability
First-time homebuyers are finding ways to forge their path to homeownership. For example, many young Americans planning to buy a home next year are relying on side income to generate cash, according to a Redfin survey.
Forty-one percent of Gen Zers and 36% of Millennials said they are working second jobs to save for their down payment and about one-quarter plan to use a cash gift from family. Some have even opted to house hack to help pay off their mortgage and other bills, according to a recent Realtor.com report. This is when a buyer purchases a home intending to rent out rooms for the long or short term.
The co-buying trend is another way young buyers share homeownership costs, according to the report. Co-buying helps friends and family pool resources to come up with down payments and closing costs. It is also a way to share costly monthly mortgage payments, utility bills and maintenance and repair costs.
If you’re considering becoming a homeowner, it could help to shop around to find the best mortgage rate. Visit Credible to compare options from different lenders and choose the one with the best rate for you.
Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
Chinese e-commerce company Alibaba has invested heavily in its fast-growing international business as growth slows for its China-focused Taobao and Tmall business.
Nurphoto | Nurphoto | Getty Images
BEIJING — Chinese e-commerce giant Alibaba‘s international arm on Wednesday launched an updated version of its artificial intelligence-powered translation tool that, it says, is better than products offered by Google, DeepL and ChatGPT.
That’s based on an assessment of Alibaba International’s new model, Marco MT, by translation benchmark framework Flores, the Chinese company said.
Alibaba’s fast-growing international unit released the AI translation product as an update to one unveiled about a year ago, which it says already has 500,000 merchant users. Sellers based in one country can use the translation tool to create product pages in the language of the target market.
The new version is based only on large language models, allowing it to draw on contextual clues such as culture or industry-specific terms, Kaifu Zhang, vice president of Alibaba International Digital Commerce Group and head of the business’ artificial intelligence initiative, told CNBC in an interview Tuesday.
“The idea is that we want this AI tool to help the bottom line of the merchants, because if the merchants are doing well, the platform will be doing well,” he said.
Large language models power artificial intelligence applications such as OpenAI’s ChatGPT, which can also translate text. The models, trained on massive amounts of data, can generate humanlike responses to user prompts.
Alibaba’s translation tool is based on its own model called Qwen. The product supports 15 languages: Arabic, Chinese, Dutch, English, French, German, Italian, Japanese, Korean, Polish, Portuguese, Russian, Spanish, Turkish and Ukrainian.
Zhang said he expects “substantial demand” for the tool from Europe and the Americas. He also expects emerging markets to be a significant area of use.
When users of Alibaba.com — a site for suppliers to sell to businesses — are categorized by country, developing countries account for about half of the top 20 active AI tool users, Zhang said.
Chinese companies have increasingly looked abroad for growth opportunities, especially e-commerce merchants. PDD Holdings‘ Temu, fast fashion seller Shein and ByteDance’s TikTok are among the recent global market entrants. Many China-based merchants also sell on Amazon.com.
Contextual clues
Since Alibaba launched the first version of its AI translation tool last fall, the company said merchants have used it for more than 100 million product listings. Similar to other AI-based services, the basic pricing charges merchants by the amount of translated text.
Zhang declined to share how much the updated version would cost. He said it was included in some service bundles for merchants wanting simple exposure to overseas users.
His thinking is that contextual translation makes it much more likely that consumers decide to buy. He shared an example in which a colloquial Chinese description for a slipper would have turned off English-speaking consumers if it was only translated literally, without getting at the implied meaning.
“The updated translation engine is going to make Double 11 a better experience for consumers because of more authentic expression,” Zhang said, in reference to the Alibaba-led shopping festival that centers on Nov. 11 each year.
Alibaba’s international business includes platforms such as AliExpress and Lazada, which primarily targets Southeast Asia. The international unit reported sales growth of 32% to $4.03 billion in the quarter ended June from a year ago.
That’s in contrast to a 1% year-on-year drop in sales to $15.6 billion for Alibaba’s main Taobao and Tmall e-commerce business, which has focused on China.
The Taobao app is also popular with consumers in Singapore. In September, the app launched an AI-powered English version for users in the country.
Nomura analysts expect that Alibaba’s international revenue slowed slightly to 29% year-on-year growth in the quarter ended September, while operating losses narrowed, according to an Oct. 10 report. Alibaba has yet to announce when it will release quarterly earnings.
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