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Mortgage Lender Sentiment Survey

Lenders Pessimistic as Reported Purchase Mortgage Demand Hits New Low

December 12, 2018

The profit outlook for mortgage lenders fell for the ninth consecutive quarter in the final three months of 2018 due to a decline in demand for loans to buy homes and refinance existing mortgages, a quarterly survey of mortgage lenders found. Fannie Mae's Q4 2018 Mortgage Lender Sentiment Survey® found that the outlook for profit among lenders in the fourth quarter reached an all-time survey low across all loan types – GSE-eligible, non-GSE-eligible, and government. "Competition from other lenders" was cited by survey participants as the top reason for their pessimism for the eighth consecutive quarter.

For purchase mortgage demand, across all loan types the net shares of lenders reporting growth for the prior quarter reached the lowest reading for any fourth quarter in the survey's history, while the prior quarter's demand growth for GSE-eligible refinance mortgages was the second lowest in the survey. Lenders also reported downbeat mortgage demand growth expectations.

"Stressful conditions continue to hang over the mortgage industry. Lenders are reporting the lowest purchase mortgage demand expectations across all loans types and the worst refinance demand expectations for GSE-eligible loans in the survey's five-year history," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "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."

Lenders' profit margin pessimism extends to ninth consecutive quarter

On this webpage you will find a news release with highlights from the survey results, a high-level infographic, the Q4 2018 data summary highlighting key attitudinal indicators, a detailed research report, the questionnaire used for the Q4 2018 survey, and FAQs providing additional information about the survey.

Downloads and Related Links

Q4 2018 News Release
Q4 2018 Detailed Research Report  
Q4 2018 Survey Highlights (Infographic)