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LenderPulse Q4 2023 survey: Mortgage pros still see opportunities in the housing market

Survey highlights opportunities and challenges mortgage professionals face as well as perspectives on housing outlook

Despite mass layoffs in the wake of the Federal Reserve’s fight against inflation, mortgage professionals still see opportunities in the market.

The top three opportunities mortgage pros see are new construction (15.3%), first-time homebuyers (14.5%) and cultivating referrals and building new relationships with buyers, builders and agents (13%), according to HousingWire‘s Q4 2023 LenderPulse survey.

Surveyed professionals also pointed to finding investor clients and have had success with products such as non-qualified mortgages (non-QMs), down payment assistance programs (DPAs) and home equity line of credits (HELOCs).

Industry workers didn’t pull back on investing in professional development, with the majority (51%) spending money to reach potential clients. About 37% of respondents were spending money in social media and 34.8% in events to garner business.

Others allocated resources into digital marketing (31.1%), automation technology (26.7%) and market data (19.3%). 

LenderPulse requests surveys from 24,000 mortgage professionals across the country on market trends and lender opportunities and challenges. Of the 135 completed surveys, 26.6% of the respondents were from the Midwest; 26% were from the Southwest; 19.2% were from the Northeast 16.3% were from the Southeast; and 11.9% were from the Northwest. Conducted from September 11 through September 21, HousingWire LenderPulse is a forward-looking quarterly survey.

Mortgage business outlook 

With mortgage rates well over 7%, about 45.2% of surveyed mortgage professionals projected that purchase mortgage origination volume will remain flat in the next three months in their market. 

Roughly 36.3% of respondents expected purchase mortgage origination volume to drop by more than 5% in Q4 while 18.5% anticipated purchase mortgage units to rise by more than 5% during the period. 

The majority of mortgage pros answered that interest rates will remain flat (64.4%) in the fourth quarter. About 23.7% of respondents said rates will go up while 11.9% expected rates to decline in the next quarter. 

While Fed Chair Jerome Powell emphasized incoming data will determine whether the central bank will raise its federal funds rate at its next FOMC meeting in November, the “dot-plot” of rate projections showed policymakers foresee one more hike by the year-end.

The bulk of central bank officials expect to have interest rates finishing the year at around 5.6%, up from the current federal funds rate range of 5.25% to 5.5%.

Elevated housing prices, lack of inventory on the market and loans falling through were the three biggest challenges surveyed professionals face in Q4.

Home price gains hit a new high, rising 0.6% in July and now stand 1% above its year-ago level, according to the latest S&P CoreLogic Case-Shiller Indices report.

“U.S. home prices continued to rally in July 2023,” Craig Lazzara, managing director at S&P DJI, said. “Our 10- and 20-City Composites each also rose in July 2023, and likewise stand slightly above their July 2022 levels.”

Rising home prices combined with lack of inventory caused by mortgage rate lock-ins continue to challenge affordability especially for first-time buyers. 

Roughly 47.4% of respondents are neutral about the economic climate in Q4, while about 38.5% are pessimistic and 14.1% are optimistic.

If you have questions about LendingPulse email RealTrends Editorial Director Tracey Velt at [email protected]. Also, be sure to sign up for LendingLife, a newsletter for mortgage professionals focused on important data and popular industry trends, and the Data Digest newsletter, a weekly breakdown of news, tips and strategies for success

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