A report from the Orange County Register in California. "The resilience of Orange County’s housing market in 2016 surprised many folks. Builders didn’t construct many 'affordable' homes. Questions swirled about the durability of the local economic rebound and the quality of the jobs it was creating. Where would mortgage rates go and would lenders keep lending? And would foreign buyers, a noteworthy force, stay interested? Nonetheless, pricing hit new record highs and sales activity was the best in 10 years. So, was the surprisingly good 2016 a harbinger of more upward momentum or the last gasp of the rebound from real estate’s ugly crash? Is a boom building or a bubble brewing?"

"The typical mortgage used by a 2016 buyer resulted in an estimated monthly loan payment of $2,960, up 6 percent in a year, according to CoreLogic. Perhaps worse, that’s up 41 percent from 2012. But exactly how many folks wanted to buy a home in those early days of the market rebound? Note that last year’s estimated house payment looks cheap vs. the bubble days: It’s 14 percent below the $3,422 payment made by the typical 2006 buyer – back when the market peaked amid a buying frenzy."

"Builders were the 2016 MVP: 12.4 percent of all sales were new homes, the highest share since 2007. So though developers are adding much-needed supply to a thin market, at new homes’ median selling price of $830,000 last year – down 1 percent from 2015 – it’s little help for bargain hunters."

The Bozeman Daily Chronicle in Montana. "With fewer homes available to Bozeman homebuyers, prices pushed higher last year, especially for more affordable condos and townhouses, according to local real estate agents. The median price of a single- family home sold inside city limits in 2016 was $359,500, up 6.8 percent from 2015, according to Big Sky Country MLS statistics provided by the Gallatin Association of Realtors. For townhouses and condos, often bought as starter homes, the 2016 median was $240,000, up a whopping 17.1 percent from $205,000 in 2015."

"'It’s just like gas or wheat or anything else,' said GAR CEO Steve Candler. 'Supply is low, demand is up and the prices are going to adjust accordingly.'"

From CNBC's Realty Check. "A plunge in applications for government-insured loans was behind a drop in overall mortgage volume last week. Most notable was a 13 percent drop in FHA applications — a direct result of the Trump administration reversing a cut in the FHA's annual mortgage insurance premium just hours after the inauguration. That cut was the last major policy act of the Obama administration and would have decreased monthly payments for thousands of new, lower-income borrowers. FHA applications increased immediately after the cut was announced, and lenders have reported that many of those have also been withdrawn."

"'Following the decision to suspend a proposed decrease in the FHA mortgage insurance premium, FHA refinance applications dropped more than 25 percent, while FHA purchase applications fell almost 6 percent,' said Michael Fratantoni, chief economist for the MBA."

From Bloomberg. "Almost a decade after it all began, the Federal Reserve is finally talking about unwinding its grand experiment in monetary policy. And when it happens, the knock-on effects in the bond market could pose a threat to the U.S. housing recovery."

"Just how big is hard to quantify. But over the past month, a number of Fed officials have openly discussed the need for the central bank to reduce its bond holdings, which it amassed as part of its unprecedented quantitative easing during and after the financial crisis. The talk has prompted some on Wall Street to suggest the Fed will start its drawdown as soon as this year, which has refocused attention on its $1.75 trillion stash of mortgage-backed securities."

"Because the Fed is now the biggest source of demand for U.S. government-backed mortgage debt and owns a third of the market, any move is likely to boost costs for home buyers. In the past year alone, the Fed bought $387 billion of mortgage bonds just to maintain its holdings. Getting out of the bond-buying business as the economy strengthens could help lift 30-year mortgage rates past 6 percent within three years, according to Moody’s Analytics Inc."

"Unwinding QE 'will be a massive and long-lasting hit' for the mortgage market, said Michael Cloherty, the head of U.S. interest-rate strategy at RBC Capital Markets."

The New York Times. "After an eight-year run, a troubled government effort to prevent foreclosures and keep struggling borrowers in their homes came to an end in December. The expired Obama-era program - known as HAMP, the Home Affordable Modification Program - was widely criticized for its poor execution. Participation was voluntary for banks, and many that opted in did so unenthusiastically. At one bank, 'the floor of the room in which the bank dumped the voluminous unopened HAMP applications actually buckled under the packages' sheer weight,' according to a scathing oversight report."

"Banks and mortgage lenders say they are ready to step in with their own foreclosure-prevention programs, modeled on what they learned from the Obama administration's effort. Armed with years of new data, financial companies say they now know how to make loan-modification programs successful, for both borrowers - who want to protect their homes - and lenders, who want to limit their losses on delinquent loans headed for default."

"'There's tremendous public good in having an industrywide approach,' said Justin Wiseman, the director of loan administration policy at the Mortgage Bankers Association, a trade group. 'No one wants things to revert to what we had before.'"