When it comes to challenging facing the mortgage world, industry professionals are most concerned about the return of rising inflation and its impact on rates.
According to a survey of 105 mortgage industry professionals conducted by
Genworth Mortgage Insurance, 79 percent of respondents cited both higher interest rates based on increased inflation (49 percent) and the re-emergence of alternative mortgage products (30 percent) as the two biggest challenges of the year. Loosening credit standards were cited by 17 percent of respondents while four percent were agitated over excess liquidity in the mortgage market.
On the positive side, the survey respondents pointed to removing legal uncertainty for lenders originating FHA loans (44 percent) and lower compliance cost for lenders (30 percent) as the best ways to improve borrower access to mortgage credit in the mortgage market, while 14 percent of respondents advocated the adoption of alternative credit scores and 12 percent applauded the efforts of the government-sponsored enterprises to pursue more ambitious affordable housing goals.
"Rising interest rates and inflation, when combined with today's inventory shortage, are accelerating home price appreciation, causing some lenders and consumers to explore less-tested methods for financing home purchases," said Rohit Gupta, President and Chief Executive Officer at Genworth Mortgage Insurance. "Despite this, private mortgage insurance is experiencing another strong year, particularly among first-time homebuyers, as the majority of consumers and lenders still prioritize financing solutions backed by tested, well-capitalized businesses. We encourage prospective homebuyers to continue educating themselves on all available options prior to pursuing homeownership, and to ensure that their financing method is as sustainable as it is affordable."
