Mortgage lenders are about to get smoked.

 Title says it all. Just looking at the current market and where rates are going is a recipe for disaster.

• Last few years they had between 2-3X regular refinance volume. Leaving a large pool of borrowers who will not need to refinance for at least 3-5 years.
• Mortgage rates have risen almost a full 1% in just the last 2 months, will likely raise another 1% by EOY. This will further slow demand. 
• Housing market starting to show signs of cooling. Worst case scenarios is housing values drop even more which will cause cash out refinances to dry up as well.
• Lenders are starting to lay people off. I have heard some shops are reporting declines anywhere from 25%-45% last month and into February.
• Sales teams have gotten soft and forgotten how to sell. They had layups all through the COVID so their skills aren’t honed for the harder sells this market will bring.

This industry is overdue for pain. It’s had a ton of growth the last 4 years (especially during COVID) and now many lenders will find they cannot operate in this environment

Bumpy road ahead. Fix those rates and if you have an open variabile HELOC with a balance consider rolling a good portion to a fix rate or better, pay it off.

The FED sets short term rates NOT long term rates..keep that in mind.