How to become a giant killer in the mortgage industry
“This is a little bit of the cat chasing its tail in that you had such a supply- demand imbalance for the last couple of years. The builders really ramped up their building and now, just at the time when they’re getting ready to have those homes hit the market, the demand has cooled,” Loomie said.
There’s been a more positive side to cooling demand, however – at least for buyers. “The bidding wars have gone down. We saw 30 and 40 offers on homes as recently as late last year, but now you’re down to two or three. In a lot of places, homes are going for asking price or even a little bit below asking price, whereas they were 10%-20% over ask last year,” he added.
Loomie’s advice to stay in the game is simply to embrace product diversification and to build realtor relationships (“the biggest thing for us is really keeping the realtors in the loop every step of the way from a communication perspective”).
Once an originator accepts this, it may not be plain sailing, but the cards are no longer stacked against them – and there may even be some encouraging news on the horizon.
“I think you’ll see rates level off and potentially come down later this year going into next year, especially as inflation drops. At that time, you want to be ready to jump into action. So manage those expenses really closely, but not too deeply and then not have the ability to spring back into action when the markets are ready.”
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