Freddie Mac released guidance on June 1st 2022 that allows for rental income received from ADUs on single family properties to be used as qualifying income for purchase and non-cashout refinance transactions. Additionally 2-3 units properties that have one ADU (previously it was only single units) are eligible. Furthermore, manufactured homes can also be considered an ADU of a single family home (see guides below). I anticipate that this will help bolster the value of homes with ADU’s as they will be more widely marketable.

Mortgage Rates – mortgage rates increased slightly this week as the price of Mortgage Backed Securities (MBS) declined. MBS are still trading above their previous negative trend line. Rates are up approximately 2.125% from this time last year.

Jobs – the Bureau of Labor and Statistics (BLS) reported 390K job creations and stable unemployment levels at 3.6%. If you look at the U6 unemployment figure which includes individuals that are no longer actively seeking work the actual unemployment rate is at 7.1%, which is up 0.1% from last month. Weekly earnings are up 4.3% year over year which was slightly below expectations.
Rents – over the past 12 months rents increased 15.3%. Rent growth in May between 2018 and 2019 was closer to 2.4%

Home Values – Case Shiller reported home values increased 2.6% in March. From March 2021 to March 2022 values are up a whopping 20.6%. It will be interesting to see April and May as they will show home values factoring higher interest rates.
Mortgage Applications – to purchase homes declined by 1% last week and are now down 14% year over year. Refinances declined 5% in the previous week and are down 75% year over year.