Looking through the eyes of those in the heart of the industry, the majority of mortgage professionals expect the first-time homebuyer market share to only get better, making it the industry’s job to now ensure they’re getting served.
The new facts come from the results of a study conducted by Genworth Mortgage Insurance at the 2016 Mortgage Bankers Association Secondary Conference in New York City.
The survey of 120 mortgage professionals was administered in person at the MBA Secondary Conference in New York City from May 16 to 17.
The survey found that when forecasting existing home sales, almost eight of every ten (78%) respondents expect first-time homebuyer market share to either continue at current levels (47% chose this option) or increase by at least three percentage points (31% chose this option).
“Our industry, via this year’s survey data, acknowledges the first-time homebuyer’s rise as a key component of the homeownership mix,” said Rohit Gupta, president and CEO of Genworth Mortgage Insurance.
“To support this demand, we must stay true to the great strides we have made in improving underwriting quality, making private capital available, and expanding the availability of prudent and affordable low down payment mortgages. Under these circumstances, it is important that all industry participants continue work to ensure we have an accessible, efficient and innovative environment for new mortgage originations,” he continued.
John Clifford, senior vice president of Commercial Operations with Genworth Mortgage Insurance, explained that there are a variety of reasons for the first-time homebuyer market is growing so fast, including affordability being extremely high, Millennials reaching home-buying age and rising rents.
As the demand rises, Genworth also found that the return of piggyback mortgages (80-10-10s) is a growing concern for industry executives.
The survey noted that 49% of respondents expressed concern about the return of this vehicle, compared to only 38% of respondents in the 2014 survey.
According to the survey, of the lenders who expressed a concern, 31% feel those who sign up for these loans may not understand the full risks involved, and 18% feel borrowers run the risk of over-levering themselves.
On the other hand, the 51% who do not view piggybacks as a concern believe borrowers are responsible for their own decisions.