DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1513081
MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 28 December 2023 C O V E R S T O R Y I n its initial report on mortgage rates to kick off the year 2023, Sam Khater, Freddie Mac's Chief Economist, wrote of rates, which stood at 6.48% as of January 5, 2023: "Mortgage applica- tion activity sunk to a quarter-century low this week as high mortgage rates continue to weaken the housing market. While mortgage market activity has significantly shrunk over the last year, inflationary pres- sures are easing and should lead to lower mortgage rates in 2023." Sadly, for prospective buyers and mortgage-seekers in 2023, lower rates were not in the cards. Instead, they rose 81 basis points to close out 2023 (as of November 22) at 7.29%. Peaking at 7.79% in October, the 30-year, fixed-rate mortgage rode a sev- en-week upswing to a 23-year high, leading to subdued buyer demand amid continued affordability concerns. "Affordability challenges and too few homes for sale remain the one-two punch that is keeping many prospective buyers on the sidelines," Mortgage Bankers As- sociation (MBA) President and CEO Bob Broeksmit observed. "We expect mortgage volume to decline nearly 30% this year to $1.64 trillion, before an expected 19% rebound in 2024, as rates finally start to trend downward." With rates hovering around the 8% mark for a good balance of Q3 and Q4, the pause in rate hikes by the Federal Reserve began to bring more aspiring homebuy- ers off the sidelines and back into the marketplace. As we get set to enter a new year, Mort- gagePoint took the opportunity to poll sever- al industry execs from across the mortgage finance spectrum—from tech providers to C-suite execs, servicers, and GSE represen- tatives—to gauge their feelings on the year we're about to leave behind and what lies ahead for the industry in 2024. Q: What's in store for the housing market as we enter 2024? What are some of the headwinds that the industry will be faced with in the coming year? Bryan Bolton, Chief Administrative Officer and SVP, U.S. Bank's Consumer Business Banking Operations: Continued limited inventory and only a slight uptick in foreclosures. Borrowers have a lot of equity and are more engaging with their servicers. More streamlined programs and online accessibility have made it easier for borrowers to get help faster and easier. Even if rates come down, they will still be much higher than the rates a lot of these borrowers currently have. If they sell their property and take their equity to get into another property, they are dealing with high housing prices and higher rates, and may not find another home. With the higher rates, it is harder to give them meaningful payment relief if they can get any. That is going to increase redefault rates. EYES ON THE HORIZON As we approach a new year, MortgagePoint took the temperature of industry experts to see what lies ahead for a market that trudged through 2023 hampered by the convergence of rates reaching 20-year highs, a shortage of housing inventory, and inflated home values. B y E R I C C . P E C K E R I C C . P E C K has 25-plus years' experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in communication arts/media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for entrepreneur.com.