Five Trends Reshaping the US Home Mortgage Industry
December 7, 2021
Source: McKinsey & Company
Consumer demand for mortgages in the United States has skyrocketed, due to a surge in home buying during the COVID-19 pandemic and as a result of low interest rates that have made refinancing attractive over the past two years. Although a rise in rates would cool refinance activity, banks, nonbank lenders, and mortgage industry investors are likely to continue seeing strong demand from the purchase market. According to a recent report from the Mortgage Bankers Association, the industry is expected to originate more than $2.5 trillion for each of the next three years, which is at least 40 percent higher than average annual originations between 2010 and 2019.
Meanwhile, the mortgage industry has been gradually adopting technology to streamline the front-to-back process of getting a mortgage, with the aim of making the consumer experience smoother and faster. Investors can facilitate further improvements at the point of origination, processing, underwriting, and loan servicing, as well as expand consumer access to home-financing and home-buying services.
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