Those of us who attended two of the industry's biggest conferences put on by the Mortgage Bankers Association - the Annual event last October and the Independent Mortgage Bankers Conference in January - saw a definite uptick in attitude and optimism. HousingWire's Jim Kleimann described the mood at IMB as "cautiously optimistic" compared to the "funeral-like atmosphere at MBA Annual." Two things happened shortly after the massive mortgage crowds flew home from Philadelphia: Interest rates spiked to their highest point in over 20 years, followed by the Fed signaling rate cuts to come. That small amount of encouragement from the FOMC opened the floodgates for industry economists to make a case for better days ahead. We're almost to the halfway point of the first quarter, and significant increases in home sales and originations have yet to materialize; but don't let the waiting game get you down.
The January 2024 Economic and Housing Outlook from Fannie Mae's Economic and Strategic Research (ESR) had great news for lenders: the ESR group predicts that originations will total $1.98 trillion this year, up from $1.50T in 2023, and Fannie's Chief Economist Doug Duncan predicts four rate cuts this year by the Fed starting in May. And it's not just the industry experts and policy wonks on the bandwagon: Bloomberg went on record saying they expect the rate on the 30-year fixed mortgage will fall to 5.5% by the end of this year, according to its newest Markets Live Pulse Survey. While the mainstream media may not mine press releases from all the trade organizations, a bold (and highly desirable) rate forecast like that from a household name like Bloomberg won't take long to show up on local news.
A 32% increase in originations and rates back down in the fives would be a sight for sore mortgage industry eyes; but if you've made significant adjustments to weather the last couple of years, it's a good time to evaluate whether you're ready to take advantage of the upswing. InGenius data showed that there was a 51% drop in the number of relevant loan officers between Q221 and Q223; and the population of LOs that closed at least one loan per month in the past twelve months and are registered with the NMLS fell to 232,000 as of the end of last year. Now is the time to look at who's left at your company - and in the industry -that aligns with your organizations goals and culture. If Fannie is right about the timing of rate increases and signs of life in the refi market beginning in May, you've got three months to get in position.
Jeff Walton is CEO of InGenius. With over 35 years in home mortgage and as a CEO and President of large national mortgage companies, Jeff is focused on helping the industry achieve high performance using actionable intelligence. Interested in learning more? Book an intro call with InGenius Data.