Lately, focus has been on would-be home buyers and how increasing mortgage rates are continuing to price them out of previously affordable areas. Finding and purchasing a home continues to be a challenge, but the difficulties resulting from rising rates extend beyond just prospective buyers. Lenders of all sizes are now battling decreased demand as refinances drop off from the highs seen throughout the course of the COVID-19 pandemic, and new purchase loans are declining as well.
Lenders are just trying to stay afloat
All of the home buying activity over the last two years created a need in the lending space for more loan originators to keep up. Now, with rates rising and demand decreasing, we’re seeing large mortgage institutions like Wells Fargo and Better.com laying off lenders in the wake of declining mortgage origination volume. More still have expressed concern over the likelihood of extended financial loss that has them looking into selling assets, cutting fees, and partnering with other lenders, according to The Wall Street Journal.
How lenders can bounce back
The question is now – where will lenders find new business? Fortunately, demand for purchase loans is still high and the work these loans require is greater than that of refinancing. Those shifting focus back toward purchase loans should see some offset in the need to decrease staff too.
But that’s not a solution
Changing strategies to market themselves towards prospective buyers may provide lenders a chance to keep business coming in, but it’s not necessarily a long-term solution. While purchase volume may still be strong, we don’t know how long it will last and it’s important to remember that rates are climbing and home prices are still at all-time highs. Buying a home now is just not financially possible for many families. Interestingly, Bloomberg suggests targeting “non-qualified mortgages” for those borrowers that don’t qualify for government backed loans because they can’t document their income.
Regardless of where you stand, keeping up with local lending activity through The Warren Group’s Mortgage MarketShare Module will prove vital in today’s lending space. You can use the module to track commercial and residential lending, measure your sales performance against the competition to track opportunities for improvement, locate emerging markets to identify new potential, and a lot more. Follow the link to check out everything the module can do to give you a leg up, then check out our Loan Originator Module to learn how it can strengthen performance analytics.
Our data specialists are also available to discuss which of our data solutions best match your needs, just ask them how our data can work for you.