U.S. Residential Mortgage Market Update
Industry metrics and analysis
This update is a quarterly compendium of housing and mortgage market indicators in the U.S., designed to help keep a pulse on the market.
Strong buyer demand amidst a limited supply of homes for sale resulted in properties selling faster and at the highest prices since 2009. These market conditions, including low interest rates, have driven growth in housing starts and demand for prime mortgages.
Despite general improvement in market conditions, we note some important developments for lenders and investors. Originations are expected to decline into 2014, as an increase in purchase loans is not expected to be enough to offset a steep decline in refinancings. Asset quality has improved, but delinquencies remain well above the historic norm.
While non-agency residential mortgage-backed securities (RMBS) are showing signs of new life in 2013, the government-sponsored enterprises (GSEs) continue to dominate the securitization market.
Looking ahead, lenders will likely continue to strive for operational efficiency and cost reduction in a challenging origination market while working to be compliant with the many regulatory changes, including the ability-to-repay rule and new servicing standards. The expected release of the Qualified Residential Mortgage rule, which will govern securitizations and risk retention, will be another important development for the market.