Previous In this conversation with HousingWire’s Allison LaForgia, Spring EQ CEO and Executive Chairman Joe Steffa discussed the market forces shaping mortgage lending today, from affordability challenges and elevated rates to technology, customer service and the growth of non-QM loan products.
Affordability, rates and untapped equity
“There’s a few trends standing out to me today: one, affordability; two, rates; and three, the untapped equity that still sits in our country,” Steffa said.
Since the end of 2019, he noted, “home prices [have] rise[n] 50% give or take, nationally,” while “median household incomes [have] rise[n] approximately 22%.” At the same time, homeowners’ insurance premiums have risen “50 to 70%,” creating what Steffa called a market that is “significantly less affordable today” than it was previously.
Rates have added another layer of pressure. “Previously, a 3% fixed interest rate on a $400,000 home was approximately a $1,700 a month payment,” Steffa said. “Today, hovering somewhere around 6% interest rate on that same $400,000 loan, is approximately a $2,400 a month payment.”
That pressure is pushing more borrowers to look at home equity.
“That leads back to the $20 trillion of untapped equity that still sits in homes across our country,” Steffa said, adding that consumers are using equity for “home savings, home improvement [and]…probably the biggest reason we see today is to see the consumer that wants to consolidate debt.”
Technology and the borrower experience
Technology is also changing the borrower experience, but Steffa said the fundamentals remain simple.
“They care about four things: they care about speed, they care about price, they care about ease of use, and they care about customer service,” he said. “Technology has a direct impact on several of those.”
Spring EQ has used technology to become “much more efficient from an operational perspective,” Steffa said, helping the company make loan decisions faster and lower its manufacturing costs. But he emphasized that technology alone is not enough.
“We used to have humans that were supported by technology,” Steffa said. “Now we have the technology that’s supported by humans, and that constant interplay between the two is what’s enabled us to separate ourselves from the rest of the pack.”
Home equity lending and non-QM opportunities
On home equity as a wealth-building tool, Steffa said it allows borrowers to diversify because “many of their biggest asset is in their home.” It also creates “tax-efficient strategies” and, most importantly, helps homeowners “pass down generational wealth through their home.”
Looking ahead, Steffa sees non-QM as one of the industry’s biggest opportunities.
“Non-QM certainly has to be up there, top of most people’s lists,” he said. “Think it’ll probably be around $100 billion originations done this year in non-QM. I think over the next five years that could grow three to five times.” Recent industry coverage similarly points to DSCR lending, bank statement loans and alternative income products as major non-QM growth drivers in 2026.
“Bank statement and DSCR [are] the two leaders there,” Steffa said. “We’ve rolled out a DSCR platform at this point. I think you’ll see us come with bank statement shortly.”
For Steffa, these products matter because they serve strong borrowers who do not fit traditional lending boxes.
“There’s an underserved part of our country that are still great credits that need loans, that need the capital,” he said. “You’re seeing still very high credit quality borrowers that just don’t have the capital available to them through a traditional lender.”
As for what’s next, Spring EQ is expanding operationally and geographically.“We have roughly 40% of our loans come from some form of the West Coast states,” Steffa said. “We’ve seen an Arizona office that we’ve recently grown and continued to add headcount to.”
