Some mortgage companies plan to increase their headcount next year despite significant macroeconomic headwinds, according to research from Arizent.
About 47% of respondents say their employers are gearing up to hire staff over the next 12 months, a promising insight from over 100 industry professionals surveyed by Arizent, the parent of National Mortgage News. The openings would come after massive waves of layoffs in late 2022 and early 2023 and amid high (but largely declining) interest rates that an overwhelming majority of respondents say will continue to affect their balance sheets.
The survey, which covered lenders’ strategies in the year ahead, found that stakeholders anticipate a harsh winter, and 93% of experts told National Mortgage News they believe a recession will arrive in 2024. Facing that economic landscape, 35% of companies represented in Arizent’s forecast suggest they’ll keep their payrolls unchanged. Only 18% of those surveyed, from c-suite executives to lower-level staff, expect more layoffs, and just 11% of nonbank lenders and servicers project job cuts.
Many current employees are wondering how artificial intelligence will impact their companies’ hiring prospects. For the second consecutive year, the majority of firms are pledging increased investment in technology, with 60% claiming they’ll have AI tools in place this year. Watching those strategies, 32% of respondents told National Mortgage News they’re worried those tech solutions will replace them.
Industry executives have offered mixed messages regarding an AI mortgage takeover, and such fears persist among nonbank lender and servicer staff, 45% of whom expressed some level of concern to Arizent. Bank and credit union workers, meanwhile, and self-sufficient mortgage brokers are far less worried about an overstepping AI.
Within the mortgage ecosystem, loan buybacks remain the biggest headache for originators heading into 2024. While repurchases top industry concerns, upper management is especially wary of changes to corporate financing availability. C-suite leaders meanwhile remain vigilant about looming regulatory restrictions.
Aside from strained homebuying power, the slight majority of home lending veterans expect fires, floods and hurricanes to also disturb the nation’s housing market. Whether by literal destruction or through soaring homeowners insurance premiums, around 41% of professionals, particularly mortgage brokers, expect at least some disruption to origination activity. Only 11% of respondents insist the calamites won’t harm their business.
Concerning affordability, lenders are weighing numerous options to attract prospective borrowers. The most popular solution will be raising loan-to-value ratios and lowering down payments; 30% of respondents said they’ll pursue such strategies. Over a quarter of lenders said they’ll count more nontraditional incomes in financial profiles, following the lead of government-sponsored enterprise efforts.
Competitors however remain split on the paramount question of absorbing more costs at the expense of profit margins. The number of respondents who said they’ll offer terms compatible with their firms’ long-term health versus those who will vie for market share in matching competitive offers was nearly equal, at 34% to 32%, respectively. Another 15% of companies said they’ll maintain healthy margins at the cost of market share.
To dive deeper into mortgage professionals’ thoughts around AI, hiring, economic challenges and competitive strategies, read Arizent’s 2024 Mortgage Predictions report out Jan. 4.
