DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1541210
35 November 2025 November 2025 » C O V E R S T O R Y U.S. 10-year Treasury bonds. Contract cancellations and withdrawn listings are both running higher than usual right now, suggesting some market weakness; watching those numbers might provide insights into further weakening or improvement. More broadly, there are demograph- ic trends like population migration, job growth, and wage growth that can factor into regional or local market momen- tum—markets with population growth, job growth, and wage growth tend to have relatively strong housing markets, both for owner-occupants and for rental property owners. Q: From your perspective, what's the biggest blind spot the housing and mortgage industries have as they plan for 2026? SHARGA: Broadly speaking, I think there's a lot of uncertainty about the economy: whether it will continue to outperform economists' forecasts, or crumble under the weight of mounting consumer debt and the country's $37 trillion national debt—the latter of which could cause bond yields to rise, taking mortgage rates higher with them. And the jury is still out on the ultimate impact of the Trump Administration's tariff and immigration policies and their impact on the overall economy. Closer to ground level, I don't think either the mortgage industry or the real estate market has really come to grips with the growing problem of rising insurance premiums across the country. Will soaring premiums make it impossible for current homeowners to afford their homes? Will those high- er costs mean lower home values so buyers can afford the properties? What happens when a homeowner or buyer finds out that homeowners' insurance isn't available? And are higher deduct- ibles and being under-insured (two ways homeowners are trying to keep premiums from rising too much) going to result in more borrowers simply walk- ing away from a property in the event of a catastrophic event, leaving the lender with a huge loss? This problem is going to get worse before it gets better, and it's probably going to require cooperation between the mortgage and insurance industries, along with local and state governments and federal agencies. Q: Are there policy or regulatory decisions on the horizon that could meaningfully alter the housing or mortgage outlook next year? SHARGA: The elephant in the room is whether Fannie Mae and Freddie Mac will be released from conservatorship. If they are—and if the release isn't done thoughtfully and carefully—this could lead to massive market disruption, since they're responsible for such an enormous share of all mortgages. Even if done correctly, it seems likely that mortgage rates will probably go up after a release, which will hardly improve the affordability challenges that are a major headwind today. The Administration has been talking about making government lands and vacant or under-utilized government buildings available for the development of affordable housing, and has discussed working with state and local governments to provide incentives to developers to build more affordable homes as well. Either of those initiatives would help fill the void of entry-level homes for the millions of young adults who are currently unable to find a home they can afford to buy. Q: Based on your decades of market analysis, what's the one key lesson from past cycles that industry leaders should keep front of mind in 2026? SHARGA: There are no "quick fixes." Market recovery simply takes time—al- most always more time than anyone in the industry would like. We're seeing signs that we might be in the early stag- es of a recovery: the number of home- owners with below-market mortgage rates has declined for two consecutive years; inventory of homes for sale is now above pre-pandemic levels in 15-20 states; home price appreciation has slowed down to below the rate of infla- tion—meaning that homes are actually less expensive this year than last in infla- tion-adjusted dollars; and demographic trends should be very positive over at least the next few years. However, while all that is true, there's nothing in the data to suggest an overnight return to sales volume hitting five or six million units—in all probability, we'll be looking at relatively flat sales volume entering 2026, before beginning a gradual recovery late in the year and in 2027. The industry should plan accordingly, rather than hoping for rapid growth, and ultimately being disappointed. Your Trusted Advisor in South Carolina • Housing development and management of residential and commercial properties. • Lease administration, lease compliance, budget preparation, construction project management, implementation, and full- scale reporting. • Specializing in income properties acquisi- tions and REIT's Renee Friar 832.271.4777 rfriar@homeadvantagerealty.com www.homeadvantagerealty.com