The Mortgage Bankers Association’s (MBA) annual conference is the biggest conference in the mortgage industry, bringing together thousands of innovators, experts, and professionals from the world of real estate finance. They come to network, learn, and even have fun! The conference is also a fantastic opportunity to share what we’re most passionate about—creating a financial system that can work for everyone.
During the conference we enjoyed many engaging discussions, educational sessions, and exciting after hour events. At the same time, many important topics came up along the way.
During a market outlook session at the MBA conference, Mike Fratantoni, MBA’s chief economist and senior vice president, forecasted a recession for next year. He also believes the Fed’s inflation target won’t be met until 2024. (Source: Fox News, “Inflation to remain high through 2024, recession on its way: MBA forecast”)
Fratantoni said, “Next year will be particularly challenging for the U.S. and global economies. The sharp increase in interest rates this year—a consequence of the Federal Reserve’s efforts to slow inflation, will lead to an equally sharp slowdown in the economy, matching the downturn that is happening right now in the housing market.”
Curious as to how economists forecast recessions? Read the White House blog, “How Do Economists Determine Whether the Economy Is in a Recession?”
While today we’re seeing mortgage rates hitting 7% and higher, Fratantoni expects rates to be closer to 5.4%. He suggested that current rates are a reflection of a spike that is influenced by a “financial dislocation” and a “heightened level of volatility in the market.” He feels that the likely looming U.S. recession will pull mortgage rates down.
During the conference, MBA also released its latest economic and mortgage market forecast. According to the report, the total mortgage origination volume is expected to decline to $2.05 trillion in 2023, compared to an estimated $2.26 trillion in 2022. Purchase originations are expected to decline 3 percent to $1.53 trillion in 2023. On the flip side, refinance volume is forecasted to decrease by 24 percent, hitting $513 billion.
With a recession on the horizon, inflation, higher mortgage rates, and a lack of affordable housing, it’s never been more important to take stock into protecting and investing in the borrower experience. Borrower retention will be crucial over the next few years.
When it comes to protecting and investing in the borrower experience, there are a few things you want to do:
While the world may feel post-apocalyptic at times, the next two years will be incredibly important to your business. Today’s borrowers will remember their experience with your business. Will it be a good experience or a bad one?
We want to know what you think!
Curious to learn about the technology we’re so passionate about?
What better way to stay relevant than to create a customer-centric environment? Don’t miss mortgage industry personality Rob Chrisman’s latest podcast, “No Borrower Left Behind: Surviving and Thriving in a Down Market.”
To listen to his podcast, visit his website today!