Read next: America’s five-star retail lenders revealed
Palim noted that lenders’ expectations for purchase and refinance demand were mixed during the period.
“In the third quarter, more lenders than not reported expectations that purchase mortgage demand will continue to grow, though the total share expecting such growth fell substantially compared to the previous quarter,” he said. “Meanwhile, a plurality of mortgage lenders expects refinance activity to continue to wane from the highs of the past year and a half – even so, their outlook on likely refi volumes was improved compared to the prior quarter.”
The lenders who expect purchase demand to dwindle in the coming months cited high home prices and limited supply as the primary reasons for their bearish sentiment.
“Lenders continue to overwhelmingly cite increased competition as their primary concern regarding future profitability, the share citing personnel costs for their diminished profit margin outlook increased significantly, suggesting that mortgage lenders’ ability to efficiently manage their workforces will be critical to their bottom lines as competitive pressures remain intense,” Palim said.