Tom Lamalfa: 1Q22 Industry Update

(Tom Lamalfa is a 44-year veteran of mortgage market research, whose focus in recent years has been on federal housing policy. He is president of TSL Consulting, Cleveland Heights, Ohio. His semi-annual reports on the housing and mortgage finance industries appear regularly in MBA NewsLink. He can be reached at tom.lamalfa@gmail.com.)

The steep run-up in interest rates, especially mortgage rates, since the start of the year prompted the mini survey I conducted in early March.  It consisted of 10 questions that were put to 17 senior mortgage banking experts.  The 17 are part of a larger group of senior executives, who twice annually provide feedback for two larger surveys I’ve conducted and MBA has published since 2008.

As stated, those surveyed are senior executives at 17 different firms.  Included in the survey group are 9 IMBs and 8 banks, evenly divided between small, medium and large firms of both types.

The survey was designed to offer MBA’s members some solid benchmarks with which to compare their firms’ 1Q22 data, results, expectations and opinions.  Topics surveyed included:  office return rates, production volumes, margins, revenues, expenses, employee retention, house prices and “buy to let” investors.

1Q22 Industry Update Scorecard

1) What percentage of your 1Q20 work force is back in the office in 1Q22?    Mean 25% / Median 10%

2) Is your firm’s 1Q22 refi volume off more than 33% from 1Q21?     Y-14 / N – 2

3) Is your firm’s 1Q22 purchase volume off more than 15% from 1Q21?    Y – 3 / N – 14

4) Are GOS margins off more than 25% in 1Q22 vs the same time last year?    Y – 13 / N – 4

5) Will 1Q22 revenue be down 25% or more compared to 1Q21?    Y – 15 / N -2

6) Are expenses in 1Q22 up more than 10% from 1Q21?    Y – 5 / N – 12

7) Is employee retention more challenging today than usual?   Y – 8 / N – 9

8) Year over year, in Dec ’22, how much will house prices have risen this year? Mean 11% / Median 10%

9)  Do you expect aggregate loan production to drop 33% or more in ’22?    Y – 12 / N – 5

10) Are investor purchases of houses becoming a problem for home buyers?   Y – 12 / N – 5

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)