Survey: Mortgage Lenders Anticipate Increased Purchase Volume In 2017

Despite a serious lack of inventory and increasing home prices, most mortgage lenders are predicting that mortgage purchase volume will increase in 2017 relative to 2016, according to a recent survey conducted by the Lenders One Cooperative, a national alliance of independent mortgage bankers, correspondent lenders and suppliers of mortgage products.

In fact, 94% of the 200 lenders that participated in the Lenders One Mortgage Barometer said they expect an increase in mortgage purchase production – up from 62% last year.

In addition, about three in five lenders, or about 59%, said it is very likely that there will be an increase in first-time home buyers in 2017.

The optimism around first-time buyers aligns with the recent report from the National Association of Realtors showing that the share of sales to first-time buyers grew from 2015 to 2016.

However, many lenders are predicting that there will be challenges to growth; for example, 41% of respondents said they see consumer debt as the highest risk factor this year.

About 93% of the lenders that participated in the January survey said they already originate non-qualified mortgage (non-QM) loans – however, most of these non-QM loans are jumbo loans, demand for which has increased as home prices increased.

About 91% of respondents said they expect to see a significant increase in jumbo loan origination volume in 2017 for their organizations.

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


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