Market Trends of USA Home Loan Industry
Growth in Nonbank Lenders is Expected to Drive the Market
Nonbank mortgage lenders offer similar services to those of traditional institutions but with lower down payments and fewer financial criteria. Because nonbanks operate without full banking licenses, they don't have to adhere to as many regulations as legacy banks, resulting in faster loan approvals and more flexible rates. Most nonbank mortgage lenders offer consumers two major services: home loans and loan refinancing. Home loans can include fixed loans, Federal Housing Administration loans, United States Department of Agriculture loans, jumbo loans, and reverse mortgage loans. Refinancing options offered by nonbank institutions often include lowering monthly mortgage payments and consolidating debt.
Nonbank lenders have gained a large footprint in the syndicated loan market, and their participation is now comparable with that of banks along important dimensions. The share of all loan facilities with nonbank involvement exceeds one-third. Around two-fifths of all nonbank lenders active in the syndicated loan market act as lead arrangers, a share similar to that of banks. Likewise, individual members of both types contribute comparable shares to the total syndicated amount on average and extend loans for similar purposes (e.g., working capital, debt repayment, or capital expenditure). That said, credit lines are more common among banks at origination, and term loans are more common among nonbanks.
Increased Online Mortgage Lending
The mortgage industry has been adopting technology to streamline the process of getting a mortgage to make the consumer experience smoother and faster. The rise of digital technology ushered in a new era for the mortgage application process as borrowers took advantage of historically low rates and lenders embraced digital mortgages more than ever before. The market size of the Online Mortgage Brokers industry in the United States grew by 12.8% per year on average between 2017 and 2022.
A new survey on borrowing and lending by ICE Mortgage Technology finds that the pandemic has permanently changed the way consumers utilize technology, and those looking to buy or refinance a home are seeking lenders who offer online tools to complete their mortgage loans from home. The overwhelming majority (99%) of lenders believe that technology can help improve the mortgage application process, citing benefits that include simplifying the entire process (74%), reducing time to close (70%), and minimizing data entry (67%). The market size of the Online Mortgage Brokers industry in the US has grown 12.8% per year on average between 2017 and 2022.
