With the residential real estate market showing signs of turning a corner, the newest results from Scotsman Guide’s Mortgage Originator Sentiment Survey (MOSS) reveal that the mortgage industry’s leading originators are hopeful for a rebound.
The first-half 2023 iteration of MOSS polled mortgage professionals who qualified for Scotsman Guide’s Top Originators rankings (a comprehensive listing of the nation’s top-producing residential originators) in January. It found that 64% of respondents expect their business to perform better during the next six months compared to the second half of 2022.
That’s a significant turnaround from the survey’s June 2022 findings, which saw only 22% of top-ranking originators expecting business to improve in the six-month period ahead. That survey was performed amid a cyclone of downside risks, including rising interest rates, widespread inflation, low housing supply and political uncertainty in Eastern Europe. These pressures dovetailed to push the already flagging housing market further into a downward spiral during the second half of the year.
But recent developments, such as decreasing mortgage rates and a pullback of the Federal Reserve’s hawkish monetary policy, have mortgage bankers and brokers alike seeing a light at the end of the tunnel.
Only 7% of Top Originators believe their business is going to perform worse in the next six months, down substantially from 37% in the second half of 2022. Twenty-nine percent feel that their business will stay the same, down from 41% in the previous half.
“What a difference six months make,” said Jeffrey Sabourin, chief product officer for Scotsman Guide. “The mortgage industry is certainly not out of the woods yet, but respondents to our survey are responding optimistically to recent market signals.
“Interestingly, Top Originators have so far proved prescient about the direction of the market, so we’re excited to see where their positivity leads.”
Brokers have historically been more upbeat than bankers since the inception of the MOSS. This trend held true in January, with 70.5% of brokers predicting better results in the next six months, compared to 61.1% of bankers. Neither group expects further market declines, with only 5.1% of brokers and 7.9% of bankers projecting that their business will get worse.
On a geographical basis, Top Originators in the South — which has more home sales than any other region — are most upbeat about the next six months, with 68.7% expecting better business than in the prior six-month period. Respondents in all four regions are overwhelmingly positive, with the share of originators expecting business to get better topping 55% in every region.