Originations

However, the pace of growth at the six active underwriters should moderate over the next two years, Keefe, Bruyette & Woods said.

Refinancing, high home prices, the concentration of pandemic-related hardships in the FHA market, and the lingering impact of last year’s market disruption all likely played a role in the intensified discrepancy.

Meanwhile, investors await word from the central bank regarding monetary policy, as limited housing supply continues to drive prices upward.

Lower rates and higher home prices will boost dollar volume although few home sales will cut into purchase volume growth.

But average loan sizes remain near record highs, with summer purchases of new constructions continuing to drive up prices.

The wholesale lender has a cost structure aimed at beating the competition in a rising rate environment, Chairman and CEO Mat Ishbia said on the second quarter earnings call.

The share of home sales that were competitive remained above year-ago levels in July, but only by a few percentage points.

Depressed margins and a $219 million hit to its servicing rights fair value translated to a lower bottom line at the wholesaler.

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Originations of loans to the self-employed and other outside-the-box borrowers had better margins than mainstream mortgages in the second quarter, but rebuilding after the niche market’s temporary disruption last year generated significant expenses.