April 23, 2015 | By RGR Marketing Blog

What Will 2015 Look Like for Mortgage Brokers?

Ask any panel of real estate experts what the market will do in 2015, and you’re bound to see some disagreement. Some are forecasting stormy weather, claiming recent price gains are too good to be true. They’re right to be cautious -- after all, we don’t want another bubble.

However, an equal number of mortgage and real estate industry experts are calling for sunny skies in the real estate market during the remainder of 2015, and there’s a growing body of evidence that suggests they may not be far off the mark.

Encouraging News from the Housing Market

Real estate brokerage Redfin recently published some stats that should put smiles on the faces of those in the mortgage business. Since last February, home tour requests have gained more than 50 percent, and the number of prospective buyers putting pen to paper on purchase offers has grown by nearly 30%.

Both of these are signs that demand is increasing in the housing market. And while these metrics are prone to fluctuation, the firm claims February’s numbers were record-breakers.

What’s Behind This New-Found Thirst for Homeownership?

For one thing, Millennials, the generation of young Americans who have confounded economists for years, are reaching the age where they’re ready to settle down and start families. And while this demographic has been traditionally attracted to urbane, metropolitan living in markets where only the most fortunate of their cohort can afford to purchase, they’re also not above considering more affordable options when providing homes for growing children becomes a necessity. So while in the past, millennials and homeownership may not have been uttered in the same sentence, that appears to be rapidly changing.

This year should also see the return of so-called rebound buyers: those who were caught in the bubble, but whose finances are starting to bounce back, making purchasing a home a viable option again.

Credit restrictions are looser than they’ve been in years, and interest rates are affordable. FHA premiums are falling. Fannie and Freddie are letting buyers get by with as little as 3% down. Budget-conscious consumers are certainly eyeing “for sale” signs with a bit more interest.

Will Supply Meet the Demand?

Obviously, increased demand for housing is good news for mortgage originators (especially if you are actively in the market, buying quality mortgage leads), but only if there’s enough inventory to meet the demand. After all, mortgages don’t happen unless homes are actually sold.

Well, there’s encouraging news on that front, as well. Between January 2014 and the same month this year, the number of homes listed increased by a respectable 6.3%. After five years of tight market conditions in the residential housing market, this is encouraging news for regular home buyers and mortgage brokers, alike.

It also looks as though investor activity will taper off this year. As home values have risen, they’ve weeded out those looking for quick gains.

Will New Mortgages Replace Refis for Mortgage Brokers?

Now that mortgage rates are rising and many consumers have recently refinanced at rock-bottom rates, the market for refinancing is beginning to taper off in most markets.

But conditions look quite favorable for new home buyers, and mortgage brokers stand to benefit in a big way in 2015.

[Photo Via: Tepilo]

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