Fannie Mae  reported that the net profit margin outlook for mortgage lenders was positive for the first time in almost three years, primarily due to strong demand expectations for both purchases and refinances mortgages, according to the Q2 2019 Mortgage Lender Sentiment Survey. 
"Lenders are signaling strong demand-driven mortgage market dynamics, with optimism for both their consumer demand and profitability outlooks reaching multi-year highs," said Doug Duncan, SVP and Chief Economist at Fannie Mae. "Lender sentiment regarding both recent and expected purchase mortgage demand growth across all loan types was the most upbeat in at least three years.”
Of the lenders surveyed, consumer demand (64%) and operational efficiency and technology (32%) were the two main reasons for an increased positive outlook on the market.
According to the report, 29% of lenders surveyed were positive on the markets’ outlook, which is a large increase from the 8% who had a negative outlook in Q1 2019.
This is the first positive survey result since Q3 2016, and the second most positive reading in the survey’s six-year history. The last time the survey showed a positive result was Q2 and Q3 of 2016, when the readings were 12% and 11%, respectively.
Lenders who had a negative outlook had gone as high as 34% in Q4 2018.
Purchase mortgage demands increased across the board over the past three months, and are expected to do so over the next three months. GSE eligible mortgage demands reported a net increase of 39%, non-GSE eligible mortgages demands grew 48% and government mortgage demands increased 31% during Q1 2019.
Those looking into refinancing due to low mortgage rates  also saw big increases in Q1 2019. GSE eligible refinance demand grew 24%, non-GSE eligible refinance demand increased 13%, and Government refinance demand saw a 15% increase.
According to a report by CNBC, the volume of mortgage applications rose 1.5% earlier this month, mostly due to those looking to refinance. The average interest rate for 30-year fixed rate mortgages was 4.23% earlier this month. Black Knight report found declining mortgages have resulted in 5.9 million refinance candidates in April.