Mortgage Origination Changes 2021-23

With residential mortgage rates again topping 7% this week, we thought it would be interesting to look at some key industry timeseries metrics, and those of a few originators to see how they are faring in this challenging lending environment.?In this article we will look at production sold into Freddie and Fannie securitizations.?Next week we will review some corresponding Ginnie Mae - related metrics

Since January 2021, the US has witnessed a rapid change in mortgage market metrics. 2021 saw the tail end of a powerful refinancing wave driven by historically low interest rates and strong housing values. The rapid succession of Fed rate increases beginning in the early months of 2022 forced the industry into an environment with very different characteristics – increased lending rates, larger loan balances and flat or decreasing housing values. In the following charts and paragraphs we will visually review the changes in some of the key loan features and changes in originations in different regions by the largest mortgage lenders throughout?the January 2021 through April 2023 timeframe (“study period.”)

Origination Metrics Reviewed

With material rapid increases in loan rates, the aggregate monthly volume of new mortgages going into the Uniform Mortgage Backed Securities (UMBS) decreased by roughly 80% during the study period.

While all lenders suffered significant origination volume reductions, some fared better than others.?For instance, as shown in the next chart, UMBS-related volume of each United Wholesale Mortgage and Penny Mac dropped by about 40%, while that of others dropped by up to about 90%, or more.?

Please see the charts and full article at:

In the study we review the underlying factors that explain the changes in originations over the last two years by geography, lenders and key loan characteristics. We focus on just a few entities and geographies in the article. Please let us know if you would like to see information about other lenders, specific geographies or loan features.