Mortgage Industry Trends 2022 – Impact on Lenders

As the world settles into a new, pandemic-induced normal, the global economy is slowly regaining momentum. Mortgage industry projections predict gradual and steady growth contingent on favorable responses from homebuyers, low interest/rental rates and listing prices. However, pre-pandemic strategies will have to be re-evaluated and revamped to adapt to evolving market dynamics.

So, what does this mean for the mortgage sector? To understand this in some detail, here a list of mortgage industry trends 2022. Read about trends that are intended to benefit c-suite mortgage professionals.

Mortgage Industry Trends 2022

Increased Intensity of Foreclosures

Among the more prominent mortgage trends 2022, there’s likely to be an increase in emergence of foreclosures. This is a direct result of lifted pandemic restrictions and mortgage bailouts nearing closure. Lenders will have to work towards digitally-enabled foreclosure processes for increased efficiency.

Change in Post-pandemic Consumer Behavior

According to Deloitte Insights, Covid-19 has brought about a paradigm shift in consumer behaviour that’s helping the sector bounce back. For instance, the pandemic has made people value safety and security, leading to an increase in demand for housing. Similarly, homebuyers now prefer projects that focus on sustainable construction for a better living experience.

Surge in Real Estate Demand

The pandemic and associated global lockdowns have completely changed the USA real estate market, resulting in home-buying sprees as the decade-long housing shortage coincides with all-time low mortgage rates. This paradigm shift provides a viable option for first time young home buyers who are on the lookout for more flexible options to suit their needs for a sustainable lifestyle. As pandemic-related restrictions, regulatory changes and government initiatives ease, home sales are further expected to rise by 6.6% and home prices by 2.9% in 2022, as compared to 2021. According to PWC’s Emerging Trends Survey results, the top-rated real estate markets belong to the emerging southern and western regions in USA with Nashville and Raleigh/Durham featuring as the two top-rated metros.

Similarly, the retail office space is recovering as COVID-19 cases reduce, employees go back into offices and vaccination drives increase. Based on CBRE’s Spring 2022 Occupier Sentiment Survey covering 185 offices across the USA, it’s expected that over 90% will either expand or include contract features such as hybrid-based work models for their workforce.

Increased Regulatory Due-Diligence

Government and regulatory bodies have also initiated measures to strengthen the mortgage sector. For instance, CFPB is expected to undertake a ‘watchdog’ stand with its new enforcement rules, leading to additional scrutiny for lenders who are now expected to maintain a strategic focus on work functions to comply with relevant policies and regulations—including foreclosure regulations and management of customer data. To curb malpractices and fraud, the sector will now be subject to greater scrutiny.

Quality and Digital Processes to influence Lender Profitability

Increasing competition and changing business demands have led to a critical focus on quality mortgage processes. For example, mortgage industry projections indicate that digitization and advanced technology are expected to disrupt outcomes across functionalities. Lenders need to strengthen their processes to prevent complacency and adopt resilient process automation mechanisms to increase profitability.

As a result of evolving consumer behavior, a rise in demand for real estate, increased regulatory and quality policies, and potential revival of the global economy, mortgage industry projections look favorable. Lenders can potentially look forward to a fruitful 2022. If you’re interested in future-proofing and realigning your business to meet evolving market demands, our in-house experts at HelioNext are here to help with a suite of integrated services and digital solutions.