Lenders aren’t taking the refinance boom for granted.
Fannie Mae’s second quarter Mortgage Lender Sentiment Survey found most
respondents do not expect business, and therefore profits, to remain at current
levels. Sixty-nine percent said profit margins would decline over the upcoming
three months, 19 percent expect they will remain the same, and 11 percent
believe they will increase. It was the third quarter in which pessimism
predominated, but only 52 percent of respondents to the first quarter survey
expected a decline. Lenders reported they had seen increased demand for
purchase mortgages over the prior three months as demand for refinancing wound down.
The net share of lenders who reported that demand had grown turned negative for
the first time since the first quarter of 2019 and was the lowest since the
fourth quarter of 2018 for GSE-eligible and government loans.