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Estimated reading time: 2 minutes, 43 seconds
The net profit margin outlook for mortgage lenders, while still negative, improved significantly in the first three months of 2019, due to stronger demand expectations for purchase and refinance mortgages, according to Fannie Mae's first quarter 2019 Mortgage Lender Sentiment Survey.
[caption id="attachment_9271" align="alignleft" width="352"] Doug Duncan[/caption]
"Lenders appear less pessimistic regarding mortgage demand expectations; thus their profit margin outlook over the next three months is also slightly improved," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "While the results seem to portray the gloomiest picture of purchase mortgage demand during the prior three months in the survey's five-year history, the net share of lenders expecting rising demand over the next three months exceeded the level recorded in the same quarter last year. Lenders' view of the refinance market was somewhat rosier, as both recent and expected demand improved to the best showing in two years, helping to support lenders' improved profit margin outlook."
Additional highlights from the survey are as follows:
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"While more lenders anticipate declining rather than rising profit margins, continuing the trend that started in the fourth quarter of 2016, the net share expecting falling profit margins decreased from a survey high in the prior quarter to the lowest share in nearly two years," said Duncan. "Lenders' improved demand outlook going into the spring selling season bodes well for our forecast of relatively flat mortgage volume this year following the double-digit drop in 2018."
The Mortgage Lender Sentiment Survey by Fannie Mae polls senior executives of its lending institution customers on a quarterly basis to assess their views and outlook across varied dimensions of the mortgage market. The Fannie Mae first quarter 2019 Mortgage Lender Sentiment Survey was conducted between Feb. 6, 2019 and Feb. 17, 2019 by PSB in coordination with Fannie Mae.
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