As the housing finance industry clings to an incremental recovery amid renewed economic uncertainty this spring, a newly released report from the Mortgage Bankers Association (MBA) reveals improved lender profitability in 2025.
Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks increased their average profit per loan originated to $785 last year from $443 in 2024. It marks two consecutive years of aggregate profitability for the sector following two straight years of aggregate losses in 2022 and 2023 as borrowing costs spiked, killing home sales.
“The average net production profit for IMBs in 2025 reached its highest level in four years at 21 basis points,” noted Marina Walsh, MBA’s vice president of industry analysis. She underscored the fragility of the recovery, however.
“While profits have improved slightly in recent years, they are still less than half the historical average going back to 2008,” added Walsh, highlighting less-than-uniform trends between operators and profitability. “There was also wide variability between top and bottom performers due to differences in product mix, volume levels, geography and cost efficiencies, among other factors,” she observed.
Since the inception of the MBA’s Annual Mortgage Bankers Performance Report in 2008, net production income by year has averaged 45 basis points, or $1,031 per loan.
The MBA reported that 78% of the firms in its profitability study posted pretax net financial profits in 2025, incorporating production and servicing business lines, marking a healthy gain from 68% in 2024 and 36% in 2023.
However, the report noted that erasing servicing profits from the equation would lower the percentage of profitable firms to 64% in 2025 — signaling amplified profitability challenges for lenders without that source of cash flow.
Net servicing incomes nevertheless fell sharply over the year, from $301 per loan in 2024 to $89 per loan in 2025, including mortgage servicing rights amortization and gains and losses on MSR valuations.
Average production volume was $2.5 billion on 7,273 loans per company in 2025, an increase from $2.1 billion on 6,259 loans in 2024.
But total loan production expenses also rose slightly in 2025 compared to 2024, increasing to $11,094 per loan from $11,076 the prior year, inclusive of commissions, compensation, occupancy, equipment and other production expenses and corporate allocations.
The average loan balance for first mortgages reached a record high of $371,965 last year, an increase of 4% from $357,631 in 2024.
“Historically, when volume picks up, fixed costs are spread over more loans, resulting in a reduction in per-loan costs,” explained Walsh. “However, that was not the case in 2025 as rising wage growth, increases in third-party charges, and reduced application pull-through negatively impacted origination costs.”
