By KIMBERLEY HAAS
Motivated millennials and the power of technology will shape the mortgage market in 2024, according to industry leaders who gathered this week to reflect on 2023 and strategize for the year ahead.
During a “2024 Lender Strategies: What (Another) Unprecedented Year in Mortgage Taught Us” webinar hosted by Snapdocs, Michael Fratantoni, chief economist and senior vice president of research and industry technology at the Mortgage Bankers Association, said volume is predicted to increase by loan count to over five million this year.
At the same time, total mortgage origination volume is expected to increase from $1.6 trillion to more than $2 trillion.
Demographics will help contribute to a market rebound after a tough year in 2023. That’s because there are nearly 50 million people between the ages of 30 and 40 who are in their prime homebuying years, Fratantoni said.
“This is the best news we have for our industry, that fundamentally the demographics are going to be strongly supportive of the purchase market for the medium term, call it the next five, six, seven years,” Fratantoni said.
Candice McNaught, senior vice president of national sales at Supreme Lending, agreed that demographics will be a key player in turning originations around.
McNaught said that some first-time buyers may have been slow to jump on the homeownership bandwagon due to affordability issues in the past two years, but there were other social trends at play that will fade out as the country moves further away from a pandemic lifestyle.
“During Covid so many people could work remotely and they had the ability to just pick up and move and live wherever they wanted to and they just weren’t ready to commit to a specific city or state,” McNaught said.
“I also think that some companies are bringing back and enforcing in-office work and that’s going to get people to plant their feet on the ground. It’s exciting because I do think that we have some great opportunities for first-time homebuyers this year, especially in the second half of this year.”
Fratantoni said mortgage rates should be closer to 6% by the end of the year.
Snapdocs CEO Michael Sachdev asked Fratantoni if rates need to get below 4% to see heavy refinancing activity again.
“The short answer is yes. To get a true refi wave like we’ve had in the past, we’d need to get certainly below four,” Fratantoni said.
Fratantoni added that the amount of production that takes place at current rate levels will determine the number of refinancing opportunities there will be down the road.
Sachdev answered an audience question about how to avoid yo-yo staffing as companies try to determine the best course of action moving forward.
Sachdev said when it comes to cost savings, lenders fall into two categories. Some invest in tech to drive down costs, while others focus on rightsizing.
“And I would just offer up, I actually think that tech is the better way. I say this because we work with a number of data providers, and we measure the back office operations, loan production and closing, and what we’ve been able to measure is the companies using tech are able to manage their costs and drive better outcomes than those who aren’t using tech to manage costs,” Sachdev said.
Priority Title and Escrow CEO Joseph LaMontagne said they have spent a lot of time and effort over the last year retooling their processes to become more efficient. An investment in technology is part of that.
“We have invested in technology in terms of building out integrations with our customers, in terms of building out software platforms that we use internally here to make our employee’s lives better. My view on that is if you are going to do something and it’s going to make the employee experience better, it’s going to help your customer, because they’re going to have a better experience as a result,” LaMontagne said.
Snapdocs is a California-based company that focuses exclusively on digital closings. Company leaders say they process over 20% of real estate closings for hundreds of lenders, working with over 70,000 settlement agents and 190,000 notaries.
Company leaders announced on Thursday that they have partnered with LenderLogix. The integration between Snapdocs’ eClosing platform and LenderLogix’s LiteSpeed point-of-sale is expected to give lenders the ability to offer borrowers a digital closing option that begins and is completed on one platform.
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