Talent management, cost-cutting are biggest business priorities for lenders

Companies putting focus on juggling personnel, expenses in tough environment

Talent management and cost-cutting are the two top business priorities for lenders in 2024, according to Fannie Mae’s latest Mortgage Lender Sentiment Survey (MLSS).

Thirty-four percent of senior mortgage executives named “talent management and leadership” as either the most important or second most important priority for their business in the second-quarter 2024 iteration of the MLSS. That’s up 9 percentage points from Q2 2023, bringing talent management to the forefront among business priorities after two years in second place.

Cost-cutting, meanwhile, remains central among lenders’ priority lists despite falling from the top priority in Q2 last year to second in 2024. Thirty-one percent of lenders named “cost-cutting” as the most important or second most important priority in the latest survey, down from 35% last year. Cost-cutting has stayed top of mind among executives since the market transitioned away from the pandemic housing boom, remaining among the top three priorities since 2022.

Those two most-cited priorities dovetailed over the course of last year, when much of companies; cost-cutting last year was achieved through trimming talent. Almost two-thirds of executives surveyed in the MLSS reporting downsizing their workforce in 2023. Lenders are more optimistic this year, with just 18% of executives anticipating a decrease in 2024 and 54% projecting no change in mortgage origination workforce size. Twenty-eight percent expect to add personnel, with mortgage banks more likely to expect an increase in staffing than depository institutions.

“Mortgage activity likely hit a post-pandemic floor following that era’s historically high mortgage purchase and refinance volumes,” wrote Doug Duncan, senior vice president and chief economist at Fannie, on the government-sponsored enterprise’s blog. “As a result, we believe some mortgage lenders are now preparing their workforces to meet potential growth in mortgage originations should the slow recovery of the housing market continue through the rest of this year and into 2025.”

The third most-cited business priority was “business process streamlining,” which has steadily remained in the top three since 2017. Twenty-nine percent of senior-level mortgage executives considered it one of the two most important priorities for their company this year, down from 32% in Q2 2023. “Consumer-facing technology,” meanwhile, dropped out of the top three priorities for the first time since 2017.

New products or services was fourth, with 25% of executives tabbing it among their top two priorities, up from 22% year over year.

Asked about the biggest challenges facing the housing market, 64% of executives named “housing stock/supply” as one of the top three risk factors. That’s the highest share among risks named in the survey, followed by mortgage rate changes (59%) and household debt level (35%).

While a majority of executives still believe that a recession is in the cards, the share has fallen immensely. Sixty-six percent now see a recession in the next two years is very or somewhat likely, down from 93% in Q2 2023.


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