Lenders Expect an Increase in Mortgage Purchase Production This Year


Sustained economic development is anticipated to give first-time homebuyers the reassurance necessary to enter the residential real estate market. Moreover, about three out of five independent mortgage lenders (59 percent) in a recent survey predict an increase in the number of first-time homebuyers in 2017.

The forecast comes from The Lenders One Cooperative, a national alliance of independent mortgage bankers, correspondent lenders and suppliers of mortgage products, via its second annual Lenders One Mortgage Barometer, a survey of 200 mortgage lending professionals.

A grand majority of lenders (94 percent, up from 62 percent in 2016) anticipate an increase in mortgage purchase production this year.

The positive outlook regarding first-time homebuyers supports the findings of a recent report from the National Association of REALTORS® that state the first-time homebuyers segment grew year-to-year to its highest level since 2013.

Many lenders still anticipate some challenges to mortgage industry growth, with survey participants expressing that they see consumer debt as the highest risk factor this year (41 percent).

The portions of the population most often noted as offering robust opportunity in 2017 include: Generation X (86 percent), Millennials (85 percent, up from 79 percent last year), Nontraditional buyers – those in the rental and vacation home markets (84 percent, up from 70 percent last year), Boomerang buyers – those people who can now qualify for a mortgage after undergoing a short sale, foreclosure or bankruptcy (83 percent, up from 68 percent last year) and Baby boomers (82 percent).

A large majority of mortgage lenders (93 percent) report that they already originate non-qualifying mortgage (non-QM) loans, and 91 percent of survey participants expressed that they expect a significant increase in jumbo loan activity for 2017.

Given the growth of the sharing economy and services such as Airbnb, 82 percent of mortgage lending professionals anticipate an increase in people looking to finance the purchases of larger homes in order to take advantage of rental incomes.

“Housing inventory remains limited and interest rates have increased sharply since the election,” says Bryan Binder, Chief Executive Officer of Lenders One. “To be successful in this environment, lenders need to focus on the purchase market and innovation to replace lost refinancing volume. Lenders must also focus on tools and solutions to help them improve operating efficiencies within their businesses.”