Fannie Mae: Lenders Are More Pessimistic

The outlook for profit among lenders during the fourth quarter reached an all-time survey low across all loan types in Fannie Mae’s latest Mortgage Lender Sentiment Survey.

 

The Survey reported lenders’ net profit margin outlook was negative for the ninth consecutive quarter, reaching the lowest level since the survey began in 2014.

 

“Competition from other lenders” was cited by survey participants as the top reason for their overall pessimism for the eighth consecutive quarter, with declines reported in purchase and refinance demand.
“Stressful conditions continue to hang over the mortgage industry,” said Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, adding that “rising mortgage rates and lean inventory amid solid home price appreciation have discouraged both first-time and trade-up homebuyers. However, mortgage rates have shown signs of stabilization, and annual home price gains have slowed from the red-hot pace seen earlier this year. While 2018 is likely to end up a disappointing year for the housing and mortgage industries, continued strength in demographics and the labor market offers hope that conditions should stabilize and may even improve next year.”

---