Tech is Humanizing Mortgage, and it’s Exactly What the Industry Needs
Industry Update
November 11, 2021
Source: Forbes
Mortgage lenders are under more pressure than seen in decades. Low rates have fueled a refinance boom, and the pandemic has sent purchase volume and home prices soaring. Through the market’s shift, lenders must manage purchases with new, well-funded mortgage fintechs nipping at their heels.
Economists predict rates will rise as economic recovery accelerates. The Mortgage Bankers Association (MBA) projects that 30-year fixed mortgage rates will rise to 4% by 2022, up from 2.8% during 2020, causing the mortgage industry’s origination volume to shrink by 38%.
Challenger lenders are moving in with fresh capital from investors, which have had bright spots in the economy for two years. Now, 57 tech companies that completed fundraising in Q1 2021 are hungry for their piece of the roughly 7 million in projected U.S. home sales, including 6.29 million existing homes and 800,000 new homes. The MBA projects $3.84 trillion in new volume this year, a number that will drop to $2.59 trillion by 2022 (33% refinance, 67% purchase).
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