3 Big Takeaways from Maxwell’s Q1 2024 Mortgage Lending Report

Maxwell’s Q1 Mortgage Lending Report, which leverages data from Maxwell Business Intelligence, uncovered interesting new market trends. While interest rates didn’t fall enough to usher in a dramatic boost in loan volume, conditions began to improve, pointing to a gradual recovery. Meanwhile, certain loan types gained market share, and specific borrower demographics showed unexpected resilience.

Here’s what Maxwell’s Q1 Mortgage Lending Report uncovered.

1. The market is no longer in free fall—but recovery may not be linear.

For lenders and home buyers alike, it may not feel like the market has turned a corner. Rates haven’t fallen dramatically, and elevated home prices and inventory issues continue to stifle loan volume. As a result, Q1 data doesn’t show the strong year-over-year growth the industry would’ve hoped for going into the new year.

Still, there are subtle signs of a market rebound and indicators that point towards stronger recovery as the year progresses. Average interest rates, for instance, hit a low not seen since Q2 of last year. January brought a sub-7% rate for the first time in six months. And Q1 brought a strong, seasonable jump from Q4 (+23%) similar to last year—but notably not seen in Q1 2022 during the depths of the downcycle. 

2. Unconventional offerings, including HELOCs, VA loans, and FHA loans, continue to outperform.

In today’s low-volume environment, many lenders have been exploring alternative loan options to recoup losses and drive new revenue streams. Maxwell’s Q1 2024 data shows that many of these options—such as HELOCs, VA loans, and FHA loans—continue to drive business in the current market. HELOCs and FHA loans, for instance, remain at all-time high levels seen in Maxwell data, reflecting borrowers’ interest in outside-the-box offerings that make financial sense as rates remain elevated.

“As the market begins to reset, it’s important for lenders to remain nimble and gear their product lineup towards evolving borrower demands,” says Alan Parris, VP/Managing Director of Maxwell Private Label Origination. “Maxwell’s Q1 data shows that American consumers continue to flock towards lower down payment options, along with ways to leverage home equity. Lenders would be wise to adjust their offerings accordingly.”

3. First-time home buyers show unexpected resilience.

It’s no surprise that first-time home buyers have recently struggled to find footing in a pricey market with limited affordable options. Despite these challenges, our data shows that this segment has found ways to achieve homeownership, leveraging smaller monthly incomes and lower credit scores to purchase in more cost-effective locales. 

The reason for this rise? With non-first time home buyers largely holding sub-3% loans, their decline in share in comparison to new buyers isn’t shocking. At the same time, first-time buyers may simply have adjusted to 7% rates as a new normal. After all, there’s no guarantee that rates will fall precipitously any time soon, and many millennials and Gen Zs are tired of holding off on a home purchase.

“The current market has challenged first-time buyers to become creative in their property selection, locale of choice, and how they actually acquire a mortgage,” says Amy Jo Plummer, Maxwell VP of Customer Experience. “Now is the time for lenders to step up to educate these buyers, connect them with viable loan options, and support them on their journey to homeownership.”

Learn more in Maxwell’s Q1 2024 Mortgage Lending Report

Download your free copy Maxwell’s Q1 2024 Mortgage Lending Report to learn:

  • The market’s continued path to recovery, including signs that the current downcycle is reaching its end
  • The current interest rate, loan volume, and loan amount trajectories
  • How HELOCs, VA loans, and FHA loans trended in Q1—and why lenders should continue to rely on these products to recoup lost volume
  • The reasons first-time home buyers are surprisingly scrappy in today’s market—and how lenders can cater to this demographic
  • Actionable ways to drive business despite market challenges

Get your free copy of Maxwell’s Q1 2024 Mortgage Lending Report

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