Economists' Outlook

Housing stats and analysis from NAR's research experts.

Survey of Mortgage Originators, Fourth Quarter 2016

This quarter marks the 13thSurvey of Mortgage Originators in which lenders shared insights about current trends in lending. This survey covered lenders’ experiences in the 4th quarter of 2016 and included questions on shortages of appraisers and the impact of rising mortgage rates. Lenders remain optimistic, but wary of rising rates with the majority indicating that rising rates will be offset in full or in part by improved income and employment growth.

purchase mortgages

Some of the key finds were:

  • Non-QM lending inched back, while rebuttable presumption lending moderated. However, there was a significant increase in interest by investors and lenders who expect to expand credit for non-QM over the next six months. This trend may represent a strong bounce from a post-QRM nadir. However, investor demand for non-QMs is expect to ease.
  • Investor demand for and lender willingness to expand access to prime borrowers, both low and high credit, is expected to continue to strengthen over the next six months.
  • 55.6 percent of lenders indicated some level of problems getting appraisals, with 11.1 percent indicating it was significant.
  • Lenders viewed fewer new appraisers, a reluctance to perform certain appraisals, and high refinance volumes as the main drivers of the shortage
  • However, 27.8 percent of lenders do not accept appraisals in which any part is performed by a trainee, while 44.4 percent require direct supervision of all aspects performed by a trainee.
  • 9.8 percent of respondents had faced a “rush fee” in which fees are increased to meet a time constraint. Rush fees averaged 37.1 percent higher in this sample.
  • 16.7 percent of respondents felt that rising rates will weaken demand for purchase mortgages, but 44.4 percent felt that strong employment and income growth will partially offset rising rates and another 16.7 percent saw those same factors as a full offset to higher rates.
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