DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1530282
57 December 2024 J O U R N A L December 2024 » Compared to 78% in Q2 of 2024, some 71% of the companies in the report reported pre-tax net financial profits in the third quarter of 2024, including all business lines (production and servic- ing). Other performance metrics for the mortgage banking sector are provided by MBA's Mortgage Bankers Perfor- mance Report series, which includes pull-through rates, productivity, product mixtures for originations and servicing volume, and revenue and cost breakouts. COSTS MOUNTING FOR HOMEBUYERS A ccording to new research from Clever Real Estate, a St. Louis-based real estate com- pany, homebuyers spend an average of $31,975 in homebuying expenses, such as closing costs, repairs, and moving, in addition to their down payment. The costs are broken down into the following: • Repairs and renovations: $13,498 • Furniture, fixtures, and appliances: $6,446 • Closing costs: $4,754 • Concessions to seller: $3,943 • Moving costs: $2,670 • Private mortgage insurance: $387 annually • Home inspection: $277 The report, "The True Cost of Buying a Home in 2024," authored by Jaime Dunaway-Seale, a Content Writer at Clever Real Estate, found that with a 15% down payment on the aver- age-priced U.S. home ($501,500) adding $75,255, the upfront cost totals $107,230. The study found that 48% of buyers said costs were higher than expected, with 39% exceeding their budget and 38% reporting impacts on their savings. Notably, 63% of first-time buyers were surprised by the cost. Among Gen Z, 49% exceeded their budget—over 1.5 times more than boomers (31%). It was noted that 79% of buyers com- promised on at least one priority. Buying within budget was the most common priority, but also the most likely to be compromised. Of the 57% who priori- tized their budget, more than one in 10 (11%) went over their limit. More than half of homebuyers (52%) negotiated with the seller, with 94% of those who did achieving success. About 34% of buyers paid below the asking price in 2024—up from 27% in 2022, when the market was more favorable to sellers. According to the Clever Real Estate report, had buyers known the actual cost of purchasing a home, 68% would have taken a different approach, believ- ing they could have saved an average of $24,000. Moreover, buyers could incur an additional $12,944 in commission costs on the average home if sellers opt not to pay the buyer's agent commission following the National Association of Realtors (NAR) settlement in August. Although 66% of buyers with agents in 2024 had their commissions covered by sellers, this is no longer required. The study found that 72% of buyers had re- grets, with the most common being that buying a home is simply too expensive. WHICH MORTGAGE LENDERS LED THE WAY IN CUSTOMER SATISFACTION? D espite a September inter- est rate cut by the Federal Reserve, the average 30-year mortgage rate has been on the rise during Q4—continued high rates, combined with steadily rising housing prices, have put a strain on mortgage customers, according to the latest J.D. Power 2024 U.S. Mortgage Origination Satisfaction Study. Some lenders have managed to turn those challenges into an opportunity to play a more direct advisory role with customers, earning praise from customers along the mortgage process, while others may have struggled. "The variability in rates and higher costs for buyers increases the importance of understanding consumers' individual situations," said Bruce Gehrke, Senior Director of Wealth and Lending Intelli- gence at J.D. Power. "Consistently, we're seeing that lenders that play an active advisory role in helping their clients navigate the current market are earning significantly higher customer satisfac- tion, loyalty, and advocacy scores than those that are treating mortgage lending as a transactional process." The U.S. Mortgage Origination Satisfaction Study measures overall customer satisfaction based on perfor- mance in six factors (in alphabetical or- der): communication; digital channels; level of trust; loan offering meets my needs; made it easy to do business with; and people. The 2024 study was fielded from August 2023 through September 2024 and is based on responses from 7,534 customers who originated a new mortgage or refinanced within the past 12 months. Key Study Findings • Overall satisfaction has declined following a sharp increase in 2023: Overall customer satisfaction with mortgage lenders is 727 (on a 1,000-point scale), down a total of three points from a year ago when mortgage customer satisfaction surged 14 points year over year. In the past year, mortgage lenders have noticeably trimmed their staff, thus making it more challenging to deliver high-quality, personalized customer service that drove the gains in customer satisfaction just a year ago. • Interpersonal relationships with local brand reps are critical to customer satisfaction: The only factor showing gains in this year's study is people, which has risen by a single point. The factors showing the biggest year-over-year declines