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