Genworth Mortgage Insurance has released the results of its survey of 200 mortgage industry professionals conducted at this year’s Mortgage Bankers Association Annual Convention & Expo in Denver. The survey addressed several topics, including a focus on impediments to achieving homeownership for the first-time homebuyer market. The analysis shows a majority of industry executives believe that saving for a sufficient downpayment (46 percent) and a lack of affordable housing inventory (35 percent) are the biggest hurdles. Additional responses included student debt (14 percent) and the ability to qualify for a mortgage (five percent).
“Despite their emergence as today’s fastest-growing homebuying demographic, first-time homebuyers still face many headwinds. While some of these, such as shortages in affordable inventory, are environment-driven, others can be addressed via improved awareness on the various low-down-payment solutions available in today’s market,” said Rohit Gupta, President and Chief Executive Officer, Genworth Mortgage Insurance. “Ensuring that the right tools from both a product and educational standpoint are in place is imperative to supporting the continued positive trajectory for these buyers.”
Respondents still anticipate strong first-time homebuyer growth in 2018, with over half (57 percent) believing that the first-time homebuyer market will grow at a faster pace than the overall housing market in 2018. Thirty-one percent thought this group would continue to grow at the same rate as the overall housing market, while only 12 percent thought the population’s growth would slow.
When asked about expectations for the growth of 97 LTV products in 2018, nearly two-thirds of respondents (63 percent) believe demand will increase for these products. An additional 35 percent of respondents thought that demand for these products would remain at their current levels, while two percent forecasted a decline in demand.
Industry professionals were divided on what they viewed as the most likely source of credit expansion in 2018, with a higher mix of above-80 LTV loans (45 percent) and a higher mix of borrowers with below-700 FICO scores (38 percent) as the most heavily cited. Seventeen percent of respondents believed that a higher mix of borrowers with above-41 DTIs would be the most likely source of credit expansion.
Forty-nine percent of respondents believe there will be a strong appetite among lenders for originating non-QM loans in 2018, suggesting that the housing industry is on a strong upward trajectory. An additional 41 percent believe that the current appetite will be average, not expecting a significant change as the housing recovery has been steady. Nine percent of professionals thought that this demand would be weak, while only one percent thought the appetite was non-existent among lenders.
