Ed­i­tor’s Desk

National Mortgage News - - Contents -

It’s rough go­ing for mort­gage lenders these days, and it doesn’t look like it’s go­ing to get any eas­ier any­time soon. At the Mort­gage Bankers As­so­ci­a­tion’s re­cent An­nual Con­ven­tion in Wash­ing­ton, D.C., economists pro­jected a 4% yearover-year in­crease in pur­chase mort­gage orig­i­na­tion dol­lar vol­ume for 2019. But the in­crease will come en­tirely from ris­ing home prices, not an uptick in loan count.

What’s more, the MBA es­ti­mates hous­ing starts will in­crease by 2.5% from 2018 to 2019, less than half the 5.3% an­nual growth from 2017 to 2018. Ac­cord­ing to MBA Chief Econ­o­mist Michael Fratan­toni, la­bor short­ages and land de­vel­op­ment costs are hin­der­ing fur­ther growth in tra­di­tional site-built hous­ing, along with tar­iff hikes that have prompted lum­ber and steel prices to soar. But re­lief for lenders is start­ing to emerge from an un­con­ven­tional source.

As this month’s cover story ex­plains, the con­ver­gence of new fi­nanc­ing, bet­ter in­ven­tory and evolv­ing bor­rower de­mands has given new rise to mort­gage op­por­tu­ni­ties in man­u­fac­tured hous­ing. Driven in part by new pro­grams from the govern­ment-spon­sored en­ter­prises, as well as qual­ity im­prove­ments in both the ma­te­ri­als and con­struc­tion of these homes, man­u­fac­tured hous­ing ad­vo­cates are ea­ger to shed the stig­mas long as­so­ci­ated with mo­bile homes.

To be sure, these ef­forts are in their in­fancy and head­winds abound. For starters, much of the man­u­fac­tured hous­ing in­ven­tory cur­rently on the mar­ket doesn’t meet the qual­ity spec­i­fi­ca­tions pre­scribed by these loan pro­grams. It will take time for even high-end man­u­fac­tured hous­ing builders to ad­just their op­er­a­tions to meet the new re­quire­ments.

But if the GSEs and the in­dus­try at large are suc­cess­ful in this en­deavor, the end re­sult will be higher-qual­ity homes, the cost of which will be largely off­set by more af­ford­able loans for con­sumers. Savvy lenders should be­gin strate­giz­ing now on how to cap­i­tal­ize on this op­por­tu­nity.

This is our last print is­sue of the year. But as al­ways, the Na­tional Mort­gage News web­site is your des­ti­na­tion for the most up-to-date news, anal­y­sis and opin­ion from across the en­tire in­dus­try. Make sure to check out our end-of-year cov­er­age in De­cem­ber, in­clud­ing our 2018 re­view and 2019 out­look. And af­ter the new year, the in­au­gu­ral Best Mort­gage Com­pa­nies to Work For rank­ings will be re­vealed on­line and in the next print edi­tion of the mag­a­zine. Send your com­ments, ques­tions and story ideas to Ed­i­tor in Chief Austin Kil­gore: austin.kil­[email protected]­me­dia.com

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