A US IPO (Initial Public Offerings) market which analysts claim to be hovering at its strongest altitude in more than half a decade, has been giving a cold shoulder to a number of US mortgage providers who had been planning stock market debuts in a near term amid concerns that the US housing market may have reached a peak, a raft of IPO-focused research firms raised a red-flag earlier this week.
In point of fact, latest remarks from the IPO-focused research and analytics firms came against the backdrop of an utterly spooked US housing market that has been witnessing a strong upsurge in demands despite a sky-scrapping US home prices, both existing and new, though a multi-year low long-term mortgage rate with 30-year fixed home loans chartered at 2.81 per cent last week, has been backing up the investors with impetus running high amid a rush towards the suburbs or countryside following a sharp uptick in work-form-home employees.
On top of that, in latest vindication of a severe drought in US mortgage vendors’ intent to go public, at least five mortgage vendors either had delayed or suspended plans of going public over the past four months, marking up an inflection point that would likely to be contemplated as a bad omen for IPOs of home loan providers likes of NewRez and Better.com, suggested analysts.
US Mortgage vendor IPO woes reflect housing market may hit plateau
Aside from that, as many sceptics expressed sheer concern over a highly congested US housing market, supply of which had tumbled to a record low last week, a report from National Association of Realtor said later last week that at a current pace of sale, supplies would likely to rub out in an approximated 1.09 months.
Meanwhile, citing that the US housing market might be on the cusp of a down-cycle, a senior strategist at IPO-focused research firm Renaissance Capital, Matthew Kennedy said, “Investors don’t like buying into a company at the start of a down cycle, and mortgage originations are an extremely cyclical business. ”