By Matt Joy, Princeton Mortgage Wholesale
Tax reform (for some) has made owning a home more expensive, refinances are down 34% from last year, it’s a purchase market, but we’re in a housing shortage and of course… rates are at their highest level in years despite dropping a smidge last week. Wow… so what your saying is it’s a tough time to be in the mortgage industry? I think for some the answer is most certainly… yes. Margins are thin and to counter that, lenders are compressing (what a nice way to say downsizing) certain divisions within their operations and executive management is reviewing LO compensation to determine how to increase originations while reducing spending… then, to top it all off we’ve not seen the last of the mortgage lender consolidation in 2018.
Is there anything positive to report for this year?! Please… give me something… anything! *Deep Breath*
Alright, maybe we can find something. Oh, here is a good article from National Mortgage News titled, Competition intensifies mortgage lenders' negative profit outlook hmmm… let’s skip over that one. Okay, okay… let’s move over to HousingWire. Here is a good read Builder confidence slips for third consecutive month… ehhh never mind, maybe we’ll save that one for a later date. Let’s jump out of the mortgage space maybe we can find something positive in the markets. We’ll jump over to CNBC. Here is some break news… Dow falls 100 points after Trump's Twitter meltdown; Facebook slides, welp… I’m not touching that one either. You know what… I’m throwing in the towel on the news outlets. It’s hard right now to find a story that isn’t looking at our industry with the proverbial “glass half empty” analogy. I mean there is still a lot of 2018 left, right? We haven’t even entered the spring or summer market and half of the industry is packing it in looking for excuses as to why it was too hard to make money this year.
I think everyone in the industry needs to take a deep breath. It’s not always rainbows and butterflies. The truth (which is always much harder to deal with) is we haven’t seen our market this competitive in a long time. Our industry was very much in a rebuilding phase after 2008 as we saw rates hit their lowest levels ever… This created opportunities for individuals within our industry to build companies, create new products, develop new divisions and most important make a lot of money. Now, here we are… and as we come down from another very lucrative time in our industry, (not pre-2008 lucrative but trust me money was made) those who struck while the iron was hot and only planned at a micro level rather than seeing the bigger picture are worried about their future. Our industry will survive this pattern as it always has, and we’ll move on... however, who moves on with it is up to those who are willing to compete in a much tougher environment than before… so, what are you gonna do?
Talk to you soon!
Photo by Jason Rosewell on Unsplash
The opinions expressed in this post are the sole view of the writer and do not reflect the opinion of Princeton Mortgage Corporation.