Top Originators Wary About The Next 6 Months

High rates are making top originators nervous about the next six months.

Scotsman Guide asked mortgage pros who qualified for their Top Originator rankings how they expect their businesses to fare in the next six months. Their answers were tepid, with an eye on uncertainty.

The biggest change came from the percentage of originators who see their businesses staying exactly the same in the next six months, up from 29% in H1 2023 to 45% in H2.

A small percentage of originators think their businesses are likely to perform worse in the next six months (9% in H2 vs. 6% in H1) but less than half expect originations to pick up (down to 45% from 64%.)

Another point of note is an outlook swap between bankers and mortgage brokers. Though brokers are historically more optimistic than bankers, the trend reversed in this survey, with 17% of brokers expecting business to get worse compared to only 8% of bankers.

“Top Originators are taking a measured tone in projecting the second half of the year,” said Jeffrey Sabourin, chief product officer for Scotsman Guide. “Negativity remains low, but after a first half of the year that saw elevated interest rates make a huge impact on sales, it seems that many mortgage professionals aren’t putting the cart before the horse when it comes to predicting improvement.”

Scotsman blames interest rates– and Federal Reserve rate hikes in particular, which were top of mind at the time the data was collected– for this lukewarm response to the 2023 mortgage market.

“Some of our respondents may have been hedging their bets in case the Fed did raise rates, while optimism among some later poll participants may have been dampened by the reintroduction of rate increases,” Sabourin said.

The Fed ultimately did raise rates by another quarter-point in July.

A separate Scotsman poll found that originators view interest rates as their main roadblock to sales, citing them as a far greater problem than stock shortages.

First-time buyers now account for fully half of home sales in 2023, the first time they’ve hit a 50% share in at least a decade, as current homeowners remain locked in by low pandemic-era rates.

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