With overall mortgage originations projected to decrease in 2018, mortgage lenders are looking to first-time homebuyers to make up a large portion of their business.

According to a new survey from Genworth Mortgage Insurance, the majority of respondents anticipate strong first-time homebuyer growth in 2018, with more than half (57%) believing that the first-time homebuyer market will grow at a faster pace than the overall housing market in 2018. 

And for the products that will be in high demand, respondents said that the majority (63%) of mortgage lenders believe demand for 97% loan-to-value products will grow in 2018.

Genworth conducted its survey of 200 mortgage industry professionals at this year’s Mortgage Bankers Association annual convention and expo in Denver.

Rohit Gupta, president and CEO of Genworth Mortgage Insurance explained in an exclusive interview with HousingWire that there is more optimism around 3% down mortgage products.

The fact that the growth has been across all lender types shows there is broad demand for the 3% down, he added. 

“As long as the underwriting is strong, borrowers going into higher LTV loans is completely prudent and safe,” said Gupta.

Given that Genworth does mortgage insurance, Gupta pointed to their own business as an example for the health of the product. He stated that all their new books are in line with expectations or better than their expectations, adding that 3% down loans are performing well and they have no concerns right now.

The survey also found that industry professionals were divided on what they viewed as the most likely source of credit expansion in 2018, with a higher mix of above-80 LTV loans (45%) and a higher mix of borrowers with below-700 FICO scores (38%) as the most heavily cited.

After those two, 17% of respondents believed that a higher mix of borrowers with above-41 debt-to-income would be the most likely source of credit expansion.

“Despite their emergence as today’s fastest-growing homebuying demographic, first-time homebuyers still face many headwinds,” said Rohit Gupta, president and CEO of Genworth Mortgage Insurance.

“While some of these, such as shortages in affordable inventory, are environment-driven, others can be addressed via improved awareness on the various low-down-payment solutions available in today’s market,” said Gupta. “Ensuring that the right tools from both a product and educational standpoint are in place is imperative to supporting the continued positive trajectory for these buyers.”

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