Home >> Daily Dose >> Fannie Weighs in on Lender Sentiments
Print This Post Print This Post

Fannie Weighs in on Lender Sentiments

Fannie Mae’s latest Mortgage Lender Sentiment Survey expects 2018 to end up being a disappointing year for the housing and mortgage industry. However, it remains hopeful for the year ahead.  

Doug Duncan, SVP and Chief Economist at Fannie Mae said, “While 2018 is likely to end up a disappointing year for the housing and mortgage industries, continued strength in demographics and the labor market offers hope that conditions should stabilize and may even improve next year."

Quoting a mortgage lender survey, Fannie Mae stated that the profit outlook for mortgage lenders fell for the ninth consecutive quarter between October and November, as a result of declining demand for loans to buy homes and refinance existing mortgages.

Duncan pointed out that stressful conditions hang over the mortgage industry as lenders report the lowest purchase mortgage demand expectations across all types of loans. He also noted that the refinance demand expectation for GSE-eligible loans is abysmal—establishing the lowest record in the survey's five-year history.

Fannie Mae’s Q4 2018 Mortgage Lender Sentiment Survey found that outlook for profit among lenders in the fourth quarter reached an all-time survey low across all loan types – GSE-eligible, non-GSE-eligible, and government. Respondents cited competition from other lenders as the top reason for their pessimism for the eighth consecutive quarter. Consumer demand was listed as the second most important reason for decreased profit margin outlook, which also reached a survey high. 

Speaking of homebuying trends, Duncan said, "Rising mortgage rates and lean inventory amid solid home price appreciation have discouraged both first-time and trade-up homebuyers. 

However, mortgage rates have shown signs of stabilization, and annual home price gains have slowed from the red-hot pace seen earlier this year.”

The report also found that lenders continued to ease credit standards at a modest pace since the beginning of 2018, however, at a significantly slower compared to last year. Expectations on easing lending standards remain steady since 2017 up until from Q4 2018.  

 

About Author: Donna Joseph

Donna Joseph is a Dallas-based writer who covers technology, HR best practices, and a mix of lifestyle topics. She is a seasoned PR professional with an extensive background in content creation and corporate communications. Joseph holds a B.A. in Sociology and M.A. in Mass Communication, both from the University of Bangalore, India. She is currently working on two books, both dealing with women-centric issues prevalent in oppressive as well as progressive societies. She can be reached at donna.joseph@thefivestar.com.
x

Check Also

Eye on the Industry: Updates on Gateway Mortgage & More

  Gateway Mortgage Group announced it has completed its merger with Farmers Exchange Bank to ...

GET THE NEWS YOU NEED, WHEN YOU NEED IT.

With daily content from MReport, you’ll never miss another important headline in originations, lending, or servicing. Subscribe to MDaily to begin receiving a complimentary daily email containing the top mortgage news and market information.