© 2018 Fannie Mae. Trademarks of Fannie Mae. 1
Mortgage Lender Sentiment Survey®
Providing Insights Into Current Lending Activities and Market Expectations
Q1 2018 Full Report – published March 15, 2018
© 2018 Fannie Mae. Trademarks of Fannie Mae. 2
Table of Contents
Summary of Key Findings………………………………………………………………………………………….……..………………………………………….. 4Research Objectives…………………………………………………………………………………………………………………………………………………… 5Q1 2018 Respondent Sample and Groups…..………………………………………………………………......................................................................... 6Key Findings
Consumer Demand (Purchase and Refinance Mortgages)…......................................................................................................................................................... 8Credit Standards……………..………………………………………………………………………………………………………............................................................ 11Profit Margin Outlook………………………………………………………………………………………………………………….......................................................... 13
Appendix………………………………………………………………………………………………………………………………………………………………… 16Survey Methodology Details…………………………………………………………………………………………………………………………………………………… 17Economic and Housing Sentiment……………………………………………………………………………………………................................................................... 25Consumer Demand (Purchase Mortgages)………………………………………………………………………………………………………………………………….. 29Consumer Demand (Refinance Mortgages)…………………………………………………………………………………………………………………………………. 41Credit Standards………………......................................................................................................................................................................................................... 48Profit Margin Outlook…………………………………………………………………………………………………………………………………………………………… 56Survey Question Text…………………………………………………………………………………………………………………………………………………………... 61
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 3
DisclaimerOpinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) group or survey respondents included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. Howthis information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR group represent the views of that group or survey respondents as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 4
• Lenders’ net profit margin outlook has stayed negative for six consecutive quarters. This quarter, it equals the survey low reached in Q4 2016. “Competition from other lenders” set a new survey high for the fifth consecutive quarter, cited as the key reason for lenders’ decreased profit margin outlook.
• The net share of lenders reporting demand growth over the prior three months turns negative for the first time since Q1 2014 and reached the lowest reading since Q1 2014. For the next three months, the net share of lenders expecting increased demand was the lowest for any first quarter in the survey’s history.
• After rising for four consecutive quarters to reach a survey high in the prior quarter, the net share of lenders reporting easing of credit standards over the prior three months falls across all loan types, approaching the levels recorded a year ago (Q1 2017).
Purchase Mortgage Demand
Q1 2018 Mortgage Lender Sentiment Survey®
Profit Margin Outlook
Credit Standards
Key Findings – Q1 2018: Lenders are slowing down the easing of underwriting standards, despite their survey-low outlook for profit margin and consumer demand.
© 2018 Fannie Mae. Trademarks of Fannie Mae. 5
Research Objectives
Tracks insights and provides benchmarks into current and future mortgage lending activities and practices.
Quarterly Regular Questions– Consumer Mortgage Demand
– Credit Standards
– Profit Margin Outlook
• The Mortgage Lender Sentiment Survey®, which debuted in March 2014, is a quarterly online survey among senior executives in the mortgage industry.
• The survey is unique because it is used not only to track lenders’ current impressions of the mortgage industry, but also their insights into the future.
• It is a quarterly 10-15 minute online survey of senior executives, such as CEOs and CFOs, of Fannie Mae’s lending institution customers.• The results are reported at the lending institution parent-company level. If more than one individual from the same institution completes the
survey, their responses are averaged to represent their parent company.
Featured Specific Topic Analyses– Mortgage Data Initiatives
– Lenders’ Customer Service Channel Strategies
– Lenders’ Experiences with APIs and Chatbots
– Next-Gen Technology Service Providers (TSPs)
– Mortgage Technology Innovation
– Lenders’ Experiences with TRID
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 6
Q1 2018 Respondent Sample and GroupsFor Q1 2018, a total of 214 senior executives completed the survey during February 7-19, representing 196 lending institutions.*
Smaller Institutions Bottom 65%
Larger Institutions Top 15%
Mid-sized Institutions
Top 16% - 35%
100%
85%
65%
Loan Origination Volume Groups**
LOWER loan origination volume
HIGHER loan origination volume
Sample Q1 2018 Sample Size
Total Lending InstitutionsThe “Total” data throughout this report is an average of the means of the three loan origination volume groups listed below.
196
Loan Origination
Volume Groups
Larger InstitutionsFannie Mae’s customers whose 2016 total industry loan origination volume was in the top 15% (above $1.01 billion)
64
Mid-sized Institutions Fannie Mae’s customers whose 2016 total industry loan origination volume was in the next 20% (16%-35%) (between $248.3 million to $1.01 billion)
51
Smaller Institutions Fannie Mae’s customers whose 2016 total industry loan origination volume was in the bottom 65% (less than $248.3 million)
81
Institution Type***
Mortgage Banks (non-depository) 69
Depository Institutions 63
Credit Unions 56
* The results of the Mortgage Lender Sentiment Survey are reported at the lending institutional parent-company level. If more than one individual from the same institution completes the survey, their responses are averaged to represent their parent institution. ** The 2016 total loan volume per lender used here includes the best available annual origination information from Fannie Mae, Freddie Mac, and Marketrac.*** Lenders that are not classified into mortgage banks or depository institutions or credit unions are mostly housing finance agencies.
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 7
Loan Type DefinitionQuestions about consumer mortgage demand and credit standards are asked across three loan types: GSE Eligible, Non-GSE Eligible, and Government loans.
Loan Type Definition Used in the Survey
Loan Type Definition
GSE Eligible LoansGSE Eligible Mortgages are defined as mortgages meeting the underwriting guidelines, including loan limit amounts, of the Government-Sponsored Enterprises (GSEs) (Fannie Mae and Freddie Mac). Government loans are excluded from this category.
Non-GSE Eligible Loans
Non-GSE Eligible Mortgages are defined as mortgages that do not meet the GSE guidelines for purchase. These loans typically require larger down payments and typically carry higher interest rates than GSE loans. Government loans are excluded from this category.
Government Loans Government Mortgages primarily include Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) insured loans but also includes other programs such as Rural Housing Guaranteed and Direct loans.
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 8
Consumer Demand(Purchase and Refinance Mortgages)• For purchase mortgages, the net share of lenders reporting demand growth over the prior three months
turned negative for the first time since Q1 2014 and reached the lowest reading since Q1 2014. The net share of lenders expecting increased demand over the next three months was the lowest for any first quarter in the survey’s history.
• For refinance mortgages, on net, more lenders reported declining demand over the prior three months, continuing the trend that started in Q1 2017. For the next three months, the net share of lenders expecting demand growth continued to drop, showing the worst outlook since Q4 2016.
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 9
Purchase Mortgage DemandThe net share of lenders reporting demand growth over the prior three months turned negative for the first time since Q1 2014 and reached the lowest reading since Q1 2014. The net share of lenders expecting increased demand over the next three months was the lowest for any first quarter in the survey’s history.
Q1 2018 Mortgage Lender Sentiment Survey®
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family purchase mortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Non-GSE EligibleGSE Eligible Government
Up
Net Up +Down
Past 3 Months
Next 3 Months
52% 43%40%
26%*^41%
20% 10%-9%^11%
23%
30%35%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
52%36% 37% 31%
42%18% 15%
0%*10% 18%
22%31%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
45% 32%
30%
21%*32%
6% 1%-14%*
13%
26%
29%
35%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
71% 71%60% 49%*^
68%66%
50%
38%*
3% 5% 10% 11%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
63% 57% 51% 44%*61%
52%43%
35%*
2% 5% 8% 9%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
65% 62% 55% 41%*^62%
55% 47%
31%*
3% 7% 8% 10%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
© 2018 Fannie Mae. Trademarks of Fannie Mae. 10
Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Non-GSE Eligible Government
Up
Net Up +Down
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family refinance mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family refinance mortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
Refinance Mortgage DemandOn net, more lenders reported declining demand over the prior three months, continuing the trend that started in Q1 2017. For the next three months, the net share of lenders expecting demand growth continued to drop, showing the worst outlook since Q4 2016.
Q1 2018 Mortgage Lender Sentiment Survey®
GSE Eligible
47%
23%11% 11%
34%
-9%
-52% -48%
13%
32%63% 59%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
65%
26%14% 8%
51%
-13%
-52% -54%
14%
39%66% 62%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
59%
18%11% 6%
44%
-21%-53% -54%
15%
39%64% 60%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
40% 36%
14% 6%^
26% 24%
-33% -51%^
14% 12%
47% 57%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
54% 50%
14% 6%^38%
39%
-40% -54%16%
11%
54% 60%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
52% 40%
15% 2%^
37% 29%
-34%-59%^
15% 11%
49% 61%^
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
Past 3 Months
Next 3 Months
© 2018 Fannie Mae. Trademarks of Fannie Mae. 11
Credit Standards• After rising for four consecutive quarters to reach a survey high in the prior quarter, the net share of lenders
reporting easing of credit standards over the prior three months fell across all loan types, approaching the levels recorded a year ago (Q1 2017).
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 12
Net Ease + = % of lenders saying ease minus % of lenders saying tightenThe % saying “remain unchanged” is not shown
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Non-GSE EligibleGSE Eligible Government
Q: Over the past three months, how did your firm’s credit standards for approving consumer applications for mortgage loans change (across both purchase mortgages and refinance mortgages)? “Ease” = Eased considerably + Eased somewhat, “Tighten” = Tightened somewhat + Tightened considerablyQ: Over the next three months, how do you expect your firm’s credit standards for approving applications from individuals for mortgage loans to change (across purchase mortgages and refinance mortgages)? “Ease” = Ease considerably + Ease somewhat, “Tighten” = Tighten somewhat + Tighten considerably
Ease
Net Ease +Tighten
Past 3 Months
Next 3 Months
Q1 2018 Mortgage Lender Sentiment Survey®
16% 13% 13% 15%*
9% 8%11% 12%*
7%5%
2% 3%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
15% 13% 8%
15%
8% 6%4%
10%*
7%7%
4%5%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
14%8%
11%12%
6%-1% 9%
9%
8%
9%
2%3%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
12% 8% 10% 11%
7% 6%9%
6%5% 2% 1% 5%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
10% 11% 12% 14%
7% 6% 9% 9%3% 5% 3% 5%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
10% 8% 5% 9%
6%3%
4% 6%4%
5%1% 3%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
Credit StandardsAfter rising for four consecutive quarters to reach a survey high in the prior quarter, the net share of lenders reporting easing of credit standards over the prior three months fell across all loan types, approaching the levels recorded a year ago (Q1 2017).
© 2018 Fannie Mae. Trademarks of Fannie Mae. 13
Profit Margin Outlook • Lenders’ net profit margin outlook has stayed negative for six consecutive quarters. This quarter, it
equals the survey low reached in Q4 2016. Those expecting a lower profit margin outlook continued to point to “competition from other lenders” as the primary reason.
• “Competition from other lenders” set a new survey high for the fifth consecutive quarter across all profit margin drivers as the key reason cited for lenders’ lower profit margin outlook. In addition, the share of lenders citing “market trend changes (e.g., shift from refinance to purchase)” as a key reason for lower profit margin outlook jumped from last quarter to come in second for the first time in three quarters.
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 14
Increase
About the same
Decrease
Q: Over the next three months, how much do you expect your firm's profit margin to change for its single-family mortgage production? [Showing: (Substantially Increase (25+ basis points) + Moderately Increase (5 - 25 basis points)), About the same (0 - 5 basis points), (Moderately Decrease (5 - 25 basis points) + Substantially Decrease (25+ basis points)]Q: What do you think will drive the increase (decrease) in your firm’s profit margin over the next three months? Please select up to two of the most important reasons.
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Key Reasons for Expected Decrease – Q1 2018Competition from other lenders 78%
Market trend changes (i.e. shift from refinance to purchase) 35%
Consumer demand 22%
Staffing (personnel costs) 12%
Government monetary or fiscal policy 12%
Key Reasons for Expected Increase – Q1 2018Operational efficiency (i.e. technology) 43%
Market trend changes (i.e. shift from refinance to purchase) 41%
Consumer demand 34%
GSE pricing and policies 29%
Staffing (personnel costs) reduction 15%
Net increase %(% of lenders saying increase minus % of lenders saying decrease)
Showing data for selected answer choices only. n=85
Showing data for selected answer choices only. n=34
31%
1%
-25% -29%
14% 12% 11%
-31% -22%-6% -12%
-22% -31%
Q1 2018 Mortgage Lender Sentiment Survey®
50% 48% 49% 46% 49% 53% 55%39% 46% 48% 54% 46% 35%*^
41%26% 13% 13%
33% 30% 28%
15%16% 23% 17%
16%17%
10%25%
38% 42%19% 18% 17%
46% 38% 29% 29% 38% 48%
Profit Margin OutlookQ1 ‘15
Q2 ‘15
Q3 ‘15
Q4 ‘15
Q1 ‘16
Q2 ‘16
Q3 ‘16
Q4 ‘16
Q1 ‘17
Q2 ‘17
Q3‘17
Q4'17
Q1'18
n=180 n=222 n=200 n=186 n=194 n=164 n=190 n=134 n=166 n=176 n=174 n=190 n=184
Lenders’ Profit Margin Outlook – Next 3 MonthsLenders’ net profit margin outlook has stayed negative for six consecutive quarters. This quarter, it equals the survey low reached in Q4 2016. Those expecting a lower profit margin outlook continued to point to “competition from other lenders” as the primary reason.
© 2018 Fannie Mae. Trademarks of Fannie Mae. 15
cc
StaffingConsumer DemandCompetition from Other Lenders
Decreased Profit Margin Outlook – Top Drivers“Competition from other lenders” set a new survey high for the fifth consecutive quarter across all profit margin drivers as the key reason cited for lenders’ lower profit margin outlook. In addition, the share of lenders citing “market trend changes(e.g., shift from refinance to purchase)” as a key reason for lower profit margin outlook jumped from last quarter to come in second for the first time in three quarters.
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q: What do you think will drive the decrease in your firm’s profit margin over the next three months? Please select the two most important reasons and rank them in order of importance. (Showing % rank 1 + 2)Total: Q1 2016: N=35; Q2 2016: N=29; Q3 2016: N=33; Q4 2016: N=64; Q1 2017: N=63 ; Q2 2017: N=49 ; Q3 2017: N=49 ; Q4 2017: N=75 ; Q1 2018: N=85
Q1 2018 Mortgage Lender Sentiment Survey®
Market Trend Changes
33%44% 46% 39%
66% 71% 74% 75%
78%^
11% 8%23%
43% 51%
26%15% 19%
35%*
25%6%
21% 26%10% 18%
35% 30%
22%
26%12%
31%19%
7%21% 17%
29% 12%*
Q12016
. . . Q12017
. . . Q12018
Q12016
. . . Q12017
. . . Q12018
Q12016
. . . Q12017
. . . Q12018
Q12016
. . . Q12017
. . . Q12018
© 2018 Fannie Mae. Trademarks of Fannie Mae. 16
Appendix
Survey Methodology Details………………………………………………………………………… 17Economic and Housing Sentiment…………………………………………………………………. 25Consumer Demand (Purchase Mortgages)……………………………………………………….. 29Consumer Demand (Refinance Mortgages)………………………………………………………. 41Credit Standards………………………………………………………………………………………. 48Profit Margin Outlook…………………………………………………………………………………. 56Survey Question Text…………………………………………………………………………………. 61
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 17
Survey Methodology DetailsAppendix
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 18
Mortgage Lender Sentiment Survey®
Background• The Fannie Mae Mortgage Lender Sentiment Survey is a quarterly online survey of senior executives of Fannie Mae’s lending institution
partners to provide insights and benchmarks that help mortgage industry professionals understand industry and market trends and assess their own business practices.
Survey Methodology• A quarterly, 10-15 minute online survey among senior executives, such as CEOs and CFOs, of Fannie Mae’s lending institution partners.• To ensure that the survey results represent the behavior and output of organizations rather than individuals, the Fannie Mae Mortgage
Lender Sentiment Survey is structured and conducted as an establishment survey.• Each respondent is asked 40-75 questions.
Sample Design• Each quarter, a random selection of approximately 3,000 senior executives among Fannie Mae’s approved lenders are invited to participate
in the study.
Data Weighting• The results of the Mortgage Lender Sentiment Survey are reported at the institutional parent-company level. If more than one individual from
the same parent institution completes the survey, their responses are averaged to represent their parent institution.
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 19
Lending Institution CharacteristicsFannie Mae’s customers invited to participate in the Mortgage Lender Sentiment Survey represent a broad base of different lending institutions that conducted business with Fannie Mae in 2016. Institutions were divided into three groups based on their 2016 total industry loan volume – Larger (top 15%), Mid-sized (top 16%-35%), and Smaller (bottom 65%). The data below further describe the compositions and loan characteristics of the three groups of institutions.
35% 41%55%
6%19%
36%54%38%
7%6% 1% 2%
Larger Mid-sized Smaller
Other
Mortgage Banks
Credit Union
Depository Institution
Institution Type
59% 67%81%
13%11%
11%27% 21%7%
Larger Mid-sized Smaller
Government
Jumbo
Conforming
Loan Types
54% 46% 55%
45% 53% 45%
Larger Mid-sized Smaller
Purchase
REFI
Loan Purposes
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 20
Sample Sizes
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018Sample
SizeMargin of
ErrorSample
SizeMargin of
ErrorSample
SizeMargin of
ErrorSample
SizeMargin of
ErrorSample
SizeMargin of
ErrorSample
SizeMargin of
ErrorSample
SizeMargin of
ErrorSample
SizeMargin of
ErrorSample
SizeMargin of
Error
Total Lending Institutions 205 ±6.72% 169 ± 7.12% 200 ± 6.47% 139 ±7.93% 177 ±7.18% 184 ±7.22% 190 ±6.64% 196 ±6.42% 196 ±6.43%
Loan Origination Volume Groups
Larger Institutions 57 ±12.64% 57 ±11.28% 70 ±9.82% 50 ±12.30% 58 ±12.76% 54 ±13.34% 58 ±11.16% 72 ±9.47% 64 ±10.32%
Mid-sized Institutions 68 ±11.53% 54 ±12.13% 59 ±11.50% 45 ±13.53% 47 ±14.20% 58 ±12.87% 66 ±10.69% 55 ±11.78% 51 ±12.36%
Smaller Institutions 80 ±10.82% 58 ±12.50% 71 ±11.22% 44 ±14.46% 72 ±11.43% 72 ±11.55% 66 ±11.65% 69 ±11.25% 81 ±10.30%
Institution Type
Mortgage Banks 63 ±11.96% 65 ±10.78% 65 ±10.79% 52 ±12.40% 53 ±13.36% 58 ±12.87% 73 ±10.12% 74 ±9.88% 69 ±10.36%
Depository Institutions 88 ±10.29% 63 ±11.84% 79 ±10.46% 54 ±12.87% 72 ±11.43% 82 ±10.82% 75 ±10.71% 77 ±10.37% 63 ±11.63%
Credit Unions 47 ±14.07% 34 ±16.16% 49 ±13.21% 29 ±17.60% 44 ±14.68% 36 ±16.33% 38 ±15.18% 37 ±15.27% 56 ±12.04%
2016Q1 was fielded between February 3, 2016 and February 16, 2016Q2 was fielded between May 4, 2016 and May 16, 2016Q3 was fielded between August 3, 2016 and August 15, 2016Q4 was fielded between November 10, 2016 and November 20, 2016
2017Q1 was fielded between February 1, 2017 and February 13, 2017Q2 was fielded between May 3, 2017 and May 14, 2017Q3 was fielded between August 2, 2017 and August 13, 2017Q4 was fielded between November 1, 2017 and November 14, 2017
Q1 2018 Mortgage Lender Sentiment Survey®
2018Q1 was fielded between February 7, 2018 and February 19, 2018
© 2018 Fannie Mae. Trademarks of Fannie Mae. 21
2018 Q1 Cross-Subgroup Sample Sizes
Total Larger Lenders
Mid-Sized Lenders
Smaller Lenders
Total 196 64 51 81
Mortgage Banks(non-depository)
69 43 20 6
Depository Institutions 63 15 14 34
Credit Unions 56 2 16 38
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 22
2018 Q1 Sample Sizes: Consumer Demand
Past 3 Months Next 3 MonthsGSE
EligibleNon-GSE Eligible Government GSE
EligibleNon-GSE Eligible Government
Total Lending Institutions 194 173 164 195 174 161
Larger Institutions 62 59 61 63 59 62
Mid-sized Institutions 51 44 44 51 45 43
Smaller Institutions 81 70 59 81 70 56
Past 3 Months Next 3 MonthsGSE
EligibleNon-GSE Eligible Government GSE
EligibleNon-GSE Eligible Government
Total Lending Institutions 190 164 145 190 167 150
Larger Institutions 61 56 59 61 57 59
Mid-sized Institutions 49 42 40 49 42 42
Smaller Institutions 80 66 46 80 68 49
Q1 2018 Mortgage Lender Sentiment Survey®
Purchase Mortgages:
Refinance Mortgages:
© 2018 Fannie Mae. Trademarks of Fannie Mae. 23
2018 Q1 Sample Sizes: Credit Standards
Past 3 Months Next 3 MonthsGSE
EligibleNon-GSE Eligible Government GSE
EligibleNon-GSE Eligible Government
Total Lending Institutions 195 172 158 195 173 158
Larger Institutions 63 59 62 63 59 62
Mid-sized Institutions 51 45 44 51 46 44
Smaller Institutions 81 68 53 81 68 53
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 24
Calculation of the “Total”
The “Total” data presented in this report is an average of the means of the three loan origination volume groups (see an illustrated example below). Please note that percentages are based on the number of financial institutions that gave responses other than “Not Applicable.” Percentages may add to under or over 100% due to rounding.
Example:
Q1 2018 Mortgage Lender Sentiment Survey®
Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? GSE Eligible (Q1 2018)
Larger Institutions
Mid-sized Institutions
Smaller Institutions Q1 “Total”
Go up 28% 26% 26% 27% [(28% + 26% + 26%)/3]
Stayed the same 32% 35% 46% 38%
Go down 39% 39% 28% 35%
43% 40% 37%
26%*^
33% 31%37%
38%
23%30% 26%
35%
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
GSE Eligible
© 2018 Fannie Mae. Trademarks of Fannie Mae. 25
Economic and Housing SentimentAppendix
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 26
U.S. Economy Overall
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year) National Housing Survey: http://www.fanniemae.com/portal/research-and-analysis/housing-survey.html
Q1 2018 Mortgage Lender Sentiment Survey®
In general, do you, as a senior mortgage executive, think the U.S.
economy overall is on the right track or the wrong track?
Total
Larger Institutions Mid-sized Institutions Smaller Institutions
National Housing Survey ®
Among the General Population (consumers)
Right TrackDon’t knowWrong Track
69%57%
77% 85%^
9% 10% 12%
5%^
21%33%
11%10%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
47%37%
48% 53%^
8% 8%17%
12%^
45%
56%
35%35%
Feb2015
. . . Feb2016
. . . Feb2017
. . . Feb2018
72%63%
76% 86%
9% 4%11% 6%
20%32%
13% 7%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
70%51%
81%90%
8% 12% 12%0%^
22%37%
7%
10%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
67%58%
76% 78%
12%14% 13%
9%
21%29%
11%
14%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
© 2018 Fannie Mae. Trademarks of Fannie Mae. 27
National Housing Survey: http://www.fanniemae.com/portal/research-and-analysis/housing-survey.html
Q1 2018 Mortgage Lender Sentiment Survey®
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Home Prices – Next 12 Months
Total National Housing Survey ®
Among the General Population (consumers)
Go UpStay the SameGo Down
Nationally, during the next 12 months, do you, as a senior mortgage executive, think home prices in general will go up,
go down, or stay the same as where they are now?
By about what percent do you, as a senior mortgage executive, think home prices
nationally will go up/down on average over the next 12 months?
62% 59%76% 69%
33% 37%
18% 22%
3% 4% 6% 7%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
46% 44%53% 52%
41% 40%32% 35%
6% 11% 8% 7%
Feb2015
. . . Feb2016
. . . Feb2017
. . . Feb2018
62% 64%75%
67%
36% 31%16%
26%
0% 4%7%
5%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
66% 64% 85%71%
30% 35%
10% 18%4% 1%
5% 12%Q1
2015. . . Q1
2016. . . Q1
2017. . . Q1
2018
59%49%
67% 70%
33%45% 28% 23%
5% 6% 5% 5%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
2.4% 2.0% 2.8% 2.9% 2.5% 1.7% 3.2% 3.3%
2.5% 2.1% 2.6% 2.9% 2.3% 2.3% 3.4% 3.0% 2.6% 1.8% 2.4% 3.0%
Larger Institutions Mid-sized Institutions Smaller Institutions
© 2018 Fannie Mae. Trademarks of Fannie Mae. 28
Difficulty of Getting a Mortgage
National Housing Survey: http://www.fanniemae.com/portal/research-and-analysis/housing-survey.html
Q1 2018 Mortgage Lender Sentiment Survey®
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
c
Total National Housing Survey ®
Among the General Population (consumers)Do you think it is very difficult,
somewhat difficult, somewhat easy, or very easy for consumers to get a home
mortgage today?
Easy (Very easy + Somewhat easy)
Difficult(Very difficult + Somewhat difficult)
Larger Institutions Mid-sized Institutions Smaller Institutions
27% 30% 27% 48%^
73% 69% 73%
50%^
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
28% 31% 35%52%^
71% 68% 65%
46%^
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
54% 54% 56% 57%
43% 43% 40% 41%
Feb2015
. . . Feb2016
. . . Feb2017
. . . Feb2018
30% 30% 36%
58%^70% 70%
63%
41%^
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
28%35% 40%
51%
72% 66% 59%
49%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
© 2018 Fannie Mae. Trademarks of Fannie Mae. 29
Consumer Demand(Purchase Mortgages)
Appendix
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 30
Purchase Mortgage Demand: GSE Eligible (by institution size)
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family purchasemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Mid-sized InstitutionsLarger Institutions Smaller Institutions
Past 3 Months
Next 3 Months
51% 41%31%
28%*34%
16%-1% -11%*
17%
25%
32%39%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
62%
43% 42%
26%
55%
17% 13%
-13%
7%26% 29%
39%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
44% 45% 47%
26%^32%
24%
20%-2%
12% 21%
27%28%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
73% 79% 66%52%*73% 75%
52%44%*
0% 4%14% 8%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
69% 72%63%
46%*64% 69%58%
38%*
5%
3% 5% 8%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
72%62%
50% 47%*69%
53%38% 31%*
3%9%
12% 16%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
L/M/S - Denote a % is significantly higher than the annual loan origination volume group that the letter represents at the 95% confidence level Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Up
Net Up +Down
© 2018 Fannie Mae. Trademarks of Fannie Mae. 31
Purchase Mortgage Demand: GSE Eligible (by institution type)
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family purchasemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Depository InstitutionsMortgage Banks Credit Unions
Past 3 Months
Next 3 Months
49%38%
31%34%D
35%
11%-5% 2%D
14%
27% 36%32%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
48%43% 44%
11%*^35%19% 13%
-28%^13%
24% 31%39%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
56%50%
45% 34%D
46%
33%
20%1%*
10%17%
25%33%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
72% 71% 69%
47%*^68% 65% 58%
36%*
4%6%
11%11%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
76% 66%46% 49%*
74% 58%33% 38%*
2% 8%13%
11%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
68% 73% 66%49%*
65% 71% 59%36%
3% 2% 7%13%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
M/D/C - Denote a % is significantly higher than the institution type group that the letter represents at the 95% confidence level Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Up
Net Up +Down
© 2018 Fannie Mae. Trademarks of Fannie Mae. 32
Purchase Mortgage Demand: Non-GSE Eligible (by institution size)
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family purchasemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Mid-sized InstitutionsLarger Institutions Smaller Institutions
Past 3 Months
Next 3 Months
53%35% 31%
28%39%
13% 10%-6%*
14%
22% 21%34%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
53%35% 40%
28%
51%
15% 14%
-10%
2%
20% 26% 38%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
49% 37% 39% 37%36% 24% 21%
14%13%
13% 18%
23%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
69% 71%59%
43%*67% 66%
51%36%*
2% 5%8% 7%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
58% 54% 53%43%*58% 51% 44%37%*
0% 3% 9% 6%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
62%42% 41% 45%*59%32% 35% 31%*
3% 10% 6%14%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
L/M/S - Denote a % is significantly higher than the annual loan origination volume group that the letter represents at the 95% confidence level Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Up
Net Up +Down
© 2018 Fannie Mae. Trademarks of Fannie Mae. 33
Purchase Mortgage Demand: Non-GSE Eligible (by institution type)
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family purchasemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Depository InstitutionsMortgage Banks Credit Unions
Past 3 Months
Next 3 Months
49%
23%23% 29%
40%
0% -3% -1%
9%23%
26% 30%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
51%34% 36%
28%39%
15% 11%
-8%
12%
19% 25% 36%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
56% 52% 46%37%44% 41% 31%
13%12% 11% 15%
24%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
61% 55% 50%40%*
59% 47% 43%28%*
2%8% 7%
12%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
65%50% 42% 42%*
63%42% 30% 33%*
2%8%
12%9%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
64% 65% 60%48%63% 63% 58%38%
1% 2% 2% 10%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
M/D/C - Denote a % is significantly higher than the institution type group that the letter represents at the 95% confidence level Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Up
Net Up +Down
© 2018 Fannie Mae. Trademarks of Fannie Mae. 34
Purchase Mortgage Demand: Government (by institution size)
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family purchasemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Mid-sized InstitutionsLarger Institutions Smaller Institutions
Past 3 Months
Next 3 Months
58%32%
24%
20%*
44%
7% -10%-24%*
14%
25% 34% 44%S
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
43%31% 39%
18%^30%
5% 13%-16%
13%
26% 26%34%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
31% 36%26%
24%17%
11% 4% -1%14%
25%22% 25%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
72%59% 59%
50%*70%53% 45%
43%*
2%6% 14% 7%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
65% 71%56%
36%61% 68%
55%
27%^
4% 3% 1%9%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
57% 57% 48%35%*
54% 42% 40%21%*
3%15% 8%
14%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
L/M/S - Denote a % is significantly higher than the annual loan origination volume group that the letter represents at the 95% confidence level Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Up
Net Up +Down
© 2018 Fannie Mae. Trademarks of Fannie Mae. 35
Purchase Mortgage Demand: Government (by institution type)
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family purchasemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Depository InstitutionsMortgage Banks Credit Unions
Past 3 Months
Next 3 Months
50%37% 33%
29%D
30%
2% 5% -6%
20%
35% 28%35%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
39% 29%25%
10%*^
26%
8% -5%-29%
13%
21%30%
39%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
36%37% 31%
21%36% 20%
5% -3%
0% 17%
26% 24%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
71% 63% 64%
44%*^69% 57% 53%
32%*
2%6% 11%
12%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
66% 65%
42% 47%*64% 56%32% 38%*
2%9%
10% 9%*
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
44%59% 65%
27%^36%53% 65%
20%^8% 6% 0%
7%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
M/D/C - Denote a % is significantly higher than the institution type group that the letter represents at the 95% confidence level Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Up
Net Up +Down
© 2018 Fannie Mae. Trademarks of Fannie Mae. 36
Purchase Mortgage Demand: Drivers of Change (selected verbatim)
Q: What do you think drove the change in your firm’s consumer demand for single-family purchase mortgages over the past three months? Please be as specific as possible. (Optional)
“Better overall economy and increase in rates (dropped demand for refi).” – Mid-sized Institution
Past 3 MonthsN=120
• Rising interest rates• Lack of Inventory• Seasonality• Consumer confidence
“Lack of inventory. Homeowners are nervous to list their homes because they can't find a new one before theirs is sold, especially in the mid-range price ranges.” – Mid-sized Institution
“Lack of inventory, slight increase in rates, and inclement weather.” – Larger Institution
“We typically experience a decline in purchase mortgages during mid-winter months.” – Smaller Institution
“Company emphasized purchase business and we noticed a rush to obtain lower rates before the end of the year.” – Larger Institution
“I believe consumer confidence is motivating potential buyers to look at purchasing. They do not fit the "box" of underwriting used in the past with FHA and with the GSE's.” – Smaller Institution
Drivers of Demand Up
Drivers of Demand Down
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 37
*Q: Please tell me the primary reason why you think this is a good time to buy a house.**Q: Please tell me the primary reason why you think this is a bad time to buy a house.
Purchase Mortgage Demand: Drivers of Change (GSE Eligible)You mentioned that you expect your firm’s consumer demand for GSE eligible loans will go up over the next three months. Which of the following housing marketplace factors do you think will drive the demand to go up? Please select up to two of the most important reasons and rank them in order of importance. (Showing % rank 1)
Total LargerInstitutions (L)
Mid-sizedInstitutions (M)
Smaller Institutions (S)
National Housing SurveyAmong the General Population
(consumers)*N= 96 33 24 38
Economic conditions (e.g., employment) overall are favorable 71% 75% 81% 56% 22%
Mortgage rates are favorable 10% 6% 6% 18% 36%
There are many homes available on the market 5% 3% 4% 8% 18%
Home prices are low 3% 0% 4% 5% 11%
It is easy to qualify for a mortgage 2% 3% 0% 3% 3%
You mentioned that you expect your firm’s consumer demand for GSE eligible loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance. (Showing % rank 1)
Total LargerInstitutions (L)
Mid-sizedInstitutions (M)
Smaller Institutions (S)
National Housing SurveyAmong the General Population
(consumers)**N= 22 5 4 13
There are not many homes available on the market 48% 20% 62% 54% 4%
Mortgage rates are not favorable 40% 60% 38% 31% 5%
Home prices are high 9% 20% 0% 8% 45%
It is difficult to qualify for a mortgage 4% 0% 0% 8% 9%
Economic conditions (e.g., employment) overall are not favorable 0% 0% 0% 0% 29%
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 38
*Q: Please tell me the primary reason why you think this is a good time to buy a house.**Q: Please tell me the primary reason why you think this is a bad time to buy a house.
Purchase Mortgage Demand: Drivers of Change (Non-GSE Eligible)You mentioned that you expect your firm’s consumer demand for Non-GSE eligible loans will go up over the next three months. Which of the following housing marketplace factors do you think will drive the demand to go up? Please select up to two of the most important reasons and rank them in order of importance. (Showing % rank 1)
Total LargerInstitutions (L)
Mid-sizedInstitutions (M)
Smaller Institutions (S)
National Housing SurveyAmong the General Population
(consumers)*N= 77 25 20 32
Economic conditions (e.g., employment) overall are favorable 63% 68% 74% 47% 22%
Mortgage rates are favorable 17% 12% 15% 25% 36%
It is easy to qualify for a mortgage 5% 4% 5% 6% 3%
There are many homes available on the market 2% 4% 0% 3% 18%
Home prices are low 2% 0% 0% 6% 11%
You mentioned that you expect your firm’s consumer demand for Non-GSE eligible loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance. (Showing % rank 1)
Total LargerInstitutions (L)
Mid-sizedInstitutions (M)
Smaller Institutions (S)
National Housing SurveyAmong the General Population
(consumers)**N= 17 4 3 10
There are not many homes available on the market 57% 25% 83% 60% 4%
Mortgage rates are not favorable 34% 75% 0% 30% 5%
Home prices are high 4% 0% 17% 0% 45%
It is difficult to qualify for a mortgage 0% 0% 0% 0% 9%
Economic conditions (e.g., employment) overall are not favorable 0% 0% 0% 0% 29%
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 39
*Q: Please tell me the primary reason why you think this is a good time to buy a house.**Q: Please tell me the primary reason why you think this is a bad time to buy a house.
Purchase Mortgage Demand: Drivers of Change (Government)You mentioned that you expect your firm’s consumer demand for government loans will go up over the next three months. Which of the following housing marketplace factors do you think will drive the demand to go up? Please select up to two of the most important reasons and rank them in order of importance. (Showing % rank 1)
Total LargerInstitutions (L)
Mid-sizedInstitutions (M)
Smaller Institutions (S)
National Housing SurveyAmong the General Population
(consumers)*N= 67 31 16 20
Economic conditions (e.g., employment) overall are favorable 54% 60% 55% 40% 22%
Mortgage rates are favorable 14% 10% 16% 20% 36%
It is easy to qualify for a mortgage 9% 10% 13% 5% 3%
There are many homes available on the market 8% 6% 13% 5% 18%
Home prices are low 1% 0% 0% 5% 11%
You mentioned that you expect your firm’s consumer demand for government loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance. (Showing % rank 1)
Total LargerInstitutions (L)
Mid-sizedInstitutions (M)
Smaller Institutions (S)
National Housing SurveyAmong the General Population
(consumers)**N= 16 4 4 8
There are not many homes available on the market 50% 22% 75% 50% 4%
Mortgage rates are not favorable 32% 44% 12% 37% 5%
Home prices are high 13% 33% 12% 0% 45%
Economic conditions (e.g., employment) overall are not favorable 5% 0% 0% 13% 29%
It is difficult to qualify for a mortgage 0% 0% 0% 0% 9%
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 40
Government Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
N= 13 4 23 42 12 8 25 38 16
There are not many homes available on the market 44% 0% 37% 35% 37% 65% 81% 72% 66%
Mortgage rates are not favorable 0% 22% 16% 56% 75% 22% 18% 22% 56%*
Home prices are high 46% 0% 33% 29% 24% 53% 47% 40% 36%
Economic conditions (e.g., employment) overall are not favorable 40% 0% 54% 40% 22% 12% 27% 15% 19%
It is difficult to qualify for a mortgage 55% 67% 25% 20% 33% 37% 13% 8% 13%
Non-GSE Eligible Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018N= 11 6 24 38 13 11 25 32 17
Mortgage rates are not favorable 16% 32% 21% 66% 77% 43% 19% 21% 64%*
There are not many homes available on the market 47% 0% 37% 30% 18% 41% 84% 65% 61%^
Home prices are high 41% 0% 19% 35% 38% 44% 53% 37% 27%
Economic conditions (e.g., employment) overall are not favorable 47% 49% 59% 30% 10% 26% 15% 11% 18%
It is difficult to qualify for a mortgage 38% 100% 39% 17% 52% 28% 12% 23% 16%^
Downward Purchase Demand Outlook DriversThe share of lenders citing “there are not many homes available on the market” as one of the two most important reasons in driving purchase demand down over the next three months has fallen from the survey highs last quarter, but is still most important.
Q1 2018 Mortgage Lender Sentiment Survey®
*Q: You mentioned that you expect your firm’s consumer demand for GSE Eligible/Non-GSE Eligible/government loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance. (Showing Total, % rank 1+2)
GSE Eligible Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018N= 11 1 26 48 19 12 31 48 22
Mortgage rates are not favorable 0% 0% 19% 67% 74% 25% 20% 23% 67%*
There are not many homes available on the market 53% 0% 55% 37% 34% 73% 82% 74% 64%
Home prices are high 40% 0% 33% 33% 39% 48% 47% 41% 47%
Economic conditions (e.g., employment) overall are not favorable 57% 100% 41% 26% 12% 7% 12% 15% 13%
It is difficult to qualify for a mortgage 38% 100% 28% 19% 24% 30% 16% 12% 4%
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
© 2018 Fannie Mae. Trademarks of Fannie Mae. 41
Consumer Demand(Refinance Mortgages)
Appendix
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 42
Refinance Mortgage Demand: GSE Eligible (by institution size)
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family refinance mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family refinancemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Mid-sized InstitutionsLarger Institutions Smaller Institutions
Past 3 Months
Next 3 Months
80%
28%15%
8%
77%
-16%
-59% -62%
3%
44%74% 70%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
66%
27%
11% 6%
53%
-12%
-61% -59%
13%
39%72% 65%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
47%
21%17%
9%22%
-15%-36% -45%
25%36%
53% 54%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
66% 58%
12% 6%
52% 52%
-48%-62%
14% 6%
60% 68%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
49% 54%
17%0%^
33% 43%
-33% -60%^
16% 11%
50% 60%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
48%36%
14% 12%M
32%
20%
-39% -41%
16%
16%
53% 53%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
L/M/S - Denote a % is significantly higher than the annual loan origination volume group that the letter represents at the 95% confidence level Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Up
Net Up +Down
© 2018 Fannie Mae. Trademarks of Fannie Mae. 43
Refinance Mortgage Demand: GSE Eligible (by institution type)
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family refinance mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family refinancemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Depository InstitutionsMortgage Banks Credit Unions
Past 3 Months
Next 3 Months
79%
25%12%
7%
77%
-17%
-60% -54%
2%
42% 72% 61%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
53%24%
12% 8%30%
-18%
-58% -58%
23%
42%70% 66%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
57%29%
19%9%
34%
-3%
-35% -49%
23%
32%54% 58%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
66% 59%
20%4%^
56% 57%
-23%
-59%^10% 2%
43% 63%^
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
44% 49%
10% 7%
25% 37%
-54%-54%
19% 12%
64% 61%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
53%33%
12% 10%
36%
9%-44% -44%
17%
24%56% 54%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
M/D/C - Denote a % is significantly higher than the institution type group that the letter represents at the 95% confidence level Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Up
Net Up +Down
© 2018 Fannie Mae. Trademarks of Fannie Mae. 44
Refinance Mortgage Demand: Non-GSE Eligible (by institution size)
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family refinance mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family refinancemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Mid-sized InstitutionsLarger Institutions Smaller Institutions
Past 3 Months
Next 3 Months
63%25%
9% 10%61%
-13%
-63%-53%
2%
38%72% 63%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
46%
23% 12% 10%
33%
-6%
-48% -55%
13%
29%60% 65%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
33%19%
11% 12%
8%-9%
-46%-36%
25%28% 57% 48%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
47% 46%
3% 8%
34% 39%
-54% -55%13% 7%
57% 63%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
34% 40%
22% 2%^
20% 31%
-18%-59%*^
14% 9%
40%61%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
36%21% 16% 9%
21%
-1%-29% -40%
15%
22% 45% 49%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
L/M/S - Denote a % is significantly higher than the annual loan origination volume group that the letter represents at the 95% confidence level Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Up
Net Up +Down
© 2018 Fannie Mae. Trademarks of Fannie Mae. 45
Refinance Mortgage Demand: Non-GSE Eligible (by institution type)
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family refinance mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family refinancemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Depository InstitutionsMortgage Banks Credit Unions
Past 3 Months
Next 3 Months
51%
18%5% 8%
49%
-13%
-62%-46%
2%
31%67%
54%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
43%19%
8% 12%24%
-17%
-57% -53%
19%
36% 65% 65%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
43% 32%
20% 13%17%
6%
-35% -41%
26% 26%55% 54%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
37% 43%
12% 7%26% 41%
-27%
-51%
11% 2%
39% 58%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
35% 36%
9% 5%18% 21%
-48% -54%17% 15%
57% 59%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
46%24%
24% 10%
30%
1%-21% -41%
16%
23%45% 51%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
M/D/C - Denote a % is significantly higher than the institution type group that the letter represents at the 95% confidence level Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Up
Net Up +Down
© 2018 Fannie Mae. Trademarks of Fannie Mae. 46
Refinance Mortgage Demand: Government (by institution size)
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family refinance mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family refinancemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Mid-sized InstitutionsLarger Institutions Smaller Institutions
Past 3 Months
Next 3 Months
83%
21%10%
7%
79%
-24%
-68% -65%
4%
45%78% 72%S
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
54%
18%10% 3%
36%
-19%
-51% -56%
18%
37% 61% 59%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
30%
12% 16% 11%2%
-24% -30% -30%L
28% 36% 46% 41%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
67%49%
11% 3%
52%42%
-46%-63%
15% 7%
57% 66%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
46% 46%
20% 0%^
30% 37%
-18%-62%^
16% 9%
38% 62%^
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
35%22%
13% 4%
21%
4% -37% -46%14%
18%50% 50%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
L/M/S - Denote a % is significantly higher than the annual loan origination volume group that the letter represents at the 95% confidence level Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Up
Net Up +Down
© 2018 Fannie Mae. Trademarks of Fannie Mae. 47
Refinance Mortgage Demand: Government (by institution type)
Q: Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family refinance mortgages go up, go down, or stay the same? “Up” = Went up significantly + Went up somewhat, “Down” = Went down significantly + Went down somewhatQ: Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family refinancemortgages to go up, go down, or stay the same? “Up” = Go up significantly + Go up somewhat, “Down” = Go down significantly + Go down somewhat
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Depository InstitutionsMortgage Banks Credit Unions
Past 3 Months
Next 3 Months
77%
17% 12%5%
71%
-27%
-57% -57%
6%
44%
69% 62%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
46% 20%9% 6%25%
-18%
-61% -52%
21%
38% 70% 58%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
28%10%
19%14%
0%
-20%-15% -35%
28%30% 34% 49%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
71% 55%
19%0%^
61%51%
-24%
-64%^
10%
4%
43% 64%^
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
39% 34%
9% 3%
22% 22%
-53% -55%
17% 12%
62% 58%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
32%18%
16% 7%
12%-7%
-26%-50%
20%25% 42%
57%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
M/D/C - Denote a % is significantly higher than the institution type group that the letter represents at the 95% confidence level Net Up + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Up
Net Up +Down
© 2018 Fannie Mae. Trademarks of Fannie Mae. 48
Credit StandardsAppendix
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 49
Credit Standards: GSE Eligible (by institution size)
Q: Over the past three months, how did your firm’s credit standards for approving consumer applications for mortgage loans change (across both purchase mortgages and refinance mortgages)? “Ease” = Eased considerably + Eased somewhat, “Tighten” = Tightened somewhat + Tightened considerablyQ: Over the next three months, how do you expect your firm’s credit standards for approving applications from individuals for mortgage loans to change (across purchase mortgages and refinance mortgages)? “Ease” = Ease considerably + Ease somewhat, “Tighten” = Tighten somewhat + Tighten considerably
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Mid-sized InstitutionsLarger Institutions Smaller Institutions
Past 3 Months
Next 3 Months
21% 20% 14% 20%
16% 18% 12%
18%
5% 2% 2%2%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
17%8%
19% 11%*
11%3%
18% 7%*6%
5%1% 4%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
11% 9% 4% 12%
1% 1% 1%10%10% 8% 3%2%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
12% 14% 19% 19%S
7% 14% 18% 14%5% 0% 1% 5%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
13% 6% 6% 9%
6%3% 6% 5%7%3% 0% 4%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
11% 5% 6% 5%
7%1%
3%0%4%
4% 3%5%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
L/M/S - Denote a % is significantly higher than the annual loan origination volume group that the letter represents at the 95% confidence level Net Ease + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Ease
Net Ease +Tighten
© 2018 Fannie Mae. Trademarks of Fannie Mae. 50
Credit Standards: GSE Eligible (by institution type)
Q: Over the past three months, how did your firm’s credit standards for approving consumer applications for mortgage loans change (across both purchase mortgages and refinance mortgages)? “Ease” = Eased considerably + Eased somewhat, “Tighten” = Tightened somewhat + Tightened considerablyQ: Over the next three months, how do you expect your firm’s credit standards for approving applications from individuals for mortgage loans to change (across purchase mortgages and refinance mortgages)? “Ease” = Ease considerably + Ease somewhat, “Tighten” = Tighten somewhat + Tighten considerably
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Depository InstitutionsMortgage Banks Credit Unions
Past 3 Months
Next 3 Months
23%12% 20%
21%D
15%
5%18% 18%D8% 7%
2% 3%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
9%
13% 6% 5%*
-1%12% 3%
0%*
10%
1% 3%5%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
18%
9%
7%17%
14%-2%
7% 17%D4%
11%
0% 0%Q1
2015. . . Q1
2016. . . Q1
2017. . . Q1
2018
17% 10% 18% 18%D
6%10% 16% 14%D11%0% 2% 4%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
8% 6% 6% 5%
3%6% 4%
0%5%
0% 2%5%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
12%
7%
7% 8%
12%-4%
7% 4%0%
11%
0% 4%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
M/D/C - Denote a % is significantly higher than the institution type group that the letter represents at the 95% confidence level Net Ease + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Ease
Net Ease +Tighten
© 2018 Fannie Mae. Trademarks of Fannie Mae. 51
Credit Standards: Non-GSE Eligible (by institution size)
Q: Over the past three months, how did your firm’s credit standards for approving consumer applications for mortgage loans change (across both purchase mortgages and refinance mortgages)? “Ease” = Eased considerably + Eased somewhat, “Tighten” = Tightened somewhat + Tightened considerablyQ: Over the next three months, how do you expect your firm’s credit standards for approving applications from individuals for mortgage loans to change (across purchase mortgages and refinance mortgages)? “Ease” = Ease considerably + Ease somewhat, “Tighten” = Tighten somewhat + Tighten considerably
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Mid-sized InstitutionsLarger Institutions Smaller Institutions
Past 3 Months
Next 3 Months
21% 19%8%
16%*
14% 17% 5% 14%*7% 2% 3% 2%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
13% 14% 12% 15%
8% 10% 9%6%5% 4% 3%9%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
14%
4%
6% 13%
4% -10% 0%10%10%
14%
6%3%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
14% 21% 16% 19%
10% 15% 15% 16%4% 6% 1% 3%Q1
2015. . . Q1
2016. . . Q1
2017. . . Q1
2018
6% 6% 14% 13%
3%0%
12%4%3%
6%2%
9%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
10% 7%
5%
9%
8%2% -1%
6%2%
5%
6%
3%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
L/M/S - Denote a % is significantly higher than the annual loan origination volume group that the letter represents at the 95% confidence level Net Ease + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Ease
Net Ease +Tighten
© 2018 Fannie Mae. Trademarks of Fannie Mae. 52
Credit Standards: Non-GSE Eligible (by institution type)
Q: Over the past three months, how did your firm’s credit standards for approving consumer applications for mortgage loans change (across both purchase mortgages and refinance mortgages)? “Ease” = Eased considerably + Eased somewhat, “Tighten” = Tightened somewhat + Tightened considerablyQ: Over the next three months, how do you expect your firm’s credit standards for approving applications from individuals for mortgage loans to change (across purchase mortgages and refinance mortgages)? “Ease” = Ease considerably + Ease somewhat, “Tighten” = Tighten somewhat + Tighten considerably
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Depository InstitutionsMortgage Banks Credit Unions
Past 3 Months
Next 3 Months
15% 14% 11% 16%
8% 9% 9% 13%7% 5% 2% 3%Q1
2015. . . Q1
2016. . . Q1
2017. . . Q1
2018
13% 10%
3%
7%
4% 4% -3% 1%9% 6%
6%
6%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
21% 14% 12%21%
11%1%
7% 17%10%
13%5% 4%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
11% 10% 17% 19%
7% 8% 15% 12%4% 2% 2% 7%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
7% 11% 6% 6%
3% 4% 1% 2%4% 7% 5% 4%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
18% 11% 12% 14%
18%2%
10% 10%0%
9%2% 4%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
M/D/C - Denote a % is significantly higher than the institution type group that the letter represents at the 95% confidence level Net Ease + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Ease
Net Ease +Tighten
© 2018 Fannie Mae. Trademarks of Fannie Mae. 53
Credit Standards: Government (by institution size)
Q: Over the past three months, how did your firm’s credit standards for approving consumer applications for mortgage loans change (across both purchase mortgages and refinance mortgages)? “Ease” = Eased considerably + Eased somewhat, “Tighten” = Tightened somewhat + Tightened considerablyQ: Over the next three months, how do you expect your firm’s credit standards for approving applications from individuals for mortgage loans to change (across purchase mortgages and refinance mortgages)? “Ease” = Ease considerably + Ease somewhat, “Tighten” = Tighten somewhat + Tighten considerably
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Mid-sized InstitutionsLarger Institutions Smaller Institutions
Past 3 Months
Next 3 Months
22%12% 16% 15%
17%3%
14% 13%5%
9%2% 2%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
13%
4%
11% 11%
4% -4%10% 6%9%
8%
1% 5%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
5% 8% 1%
6%
-7% -4% -1% 2%
12% 12%2%
4%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
12% 12% 7% 12%
8%3%
6% 9%4%
9%1% 3%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
13%3% 3% 9%
8% 2% 3%4%5% 1% 0%5%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
3%
8% 7% 2%
-2%4% 5%
0%
5%
4% 2%2%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
L/M/S - Denote a % is significantly higher than the annual loan origination volume group that the letter represents at the 95% confidence level Net Ease + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Ease
Net Ease +Tighten
© 2018 Fannie Mae. Trademarks of Fannie Mae. 54
Credit Standards: Government (by institution type)
Q: Over the past three months, how did your firm’s credit standards for approving consumer applications for mortgage loans change (across both purchase mortgages and refinance mortgages)? “Ease” = Eased considerably + Eased somewhat, “Tighten” = Tightened somewhat + Tightened considerablyQ: Over the next three months, how do you expect your firm’s credit standards for approving applications from individuals for mortgage loans to change (across purchase mortgages and refinance mortgages)? “Ease” = Ease considerably + Ease somewhat, “Tighten” = Tighten somewhat + Tighten considerably
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Q1 2018 Mortgage Lender Sentiment Survey®
Depository InstitutionsMortgage Banks Credit Unions
Past 3 Months
Next 3 Months
20%
11%
19% 19%D
6% -1%17% 16%D14%
12%
2% 3%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
10% 7% 4%
1%*1% 0% 1% -5%*9% 7% 3%
6%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
4%
0%
8% 8%
4%-11%
8% 8%D0%
11%
0% 0%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
13% 10% 8% 12%
5%7% 6% 9%8%3% 2% 3%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
6%
4%
3%
5%2% -1%
2%-1%
4%
5%
1%
6%
Q12015
. . . Q12016
. . . Q12017
. . . Q12018
8%
3%
8% 5%
8%-3%
8% 5%0%
6%
0% 0%Q1
2015. . . Q1
2016. . . Q1
2017. . . Q1
2018
M/D/C - Denote a % is significantly higher than the institution type group that the letter represents at the 95% confidence level Net Ease + = % of lenders saying up minus % of lenders saying downThe % saying “stay the same” is not shown
Ease
Net Ease +Tighten
© 2018 Fannie Mae. Trademarks of Fannie Mae. 55
Credit Standards: Drivers of Change (selected verbatim)
Q: What do you think drove the change in your firm’s credit standards for approving consumer applications for purchase mortgage loans over the last three months? Please be as specific as possible. (Optional)
“Automated underwriting relaxed standards & other GSE relaxed standards.” – Smaller Institution
Past 3 MonthsN=38
• Changes to guidelines• Competitive changes/pressure• Reduction of overlays
Q: What do you think will drive the change in your firm’s credit standards for approving consumer applications for purchase mortgage loans over the next three months? Please be as specific as possible. (Optional)
“Removing internal overlays.” – Larger Institution
Next 3 MonthsN=29
• Changes to guidelines• Market conditions• Portfolio/Strategic changes
“Competition seems to be relaxing standards. We relaxed as well, in response to competition. We will continue to follow the market as long as guidelines remain rational.”
– Mid-sized Institution
“The market has been strong for 8+ years and won't last forever. Strengthening the credit box right now is the right move. Not major changes but this is not the time for chasing
marginal borrowers or credit.” – Larger Institution
Drivers of Loosening Change
Drivers of Tightening Change
Q1 2018 Mortgage Lender Sentiment Survey®
“Market conditions, competitive environment and regulatory relief.” – Larger Institution
“DTI change from 45 to 50%, MI restrictions on Credits cores and DTI's.” – Mid-sized Institution
“With more secondary lenders entering the market it opens up niche programs and services that have not been available in the past. Especially in manufactured housing.”
– Smaller Institution
“Reduction in compliance concerns as well as more need for product in a homogeneous lending environment.” – Mid-sized Institution
“The tightening that MI companies recently announced on loans with a DTI > 45% and FICO score below 700.” – Larger Institution
“We will have to be more conservative with the concern over a market adjustment.” –Smaller Institution
“The performance of loans in the lower FICO tiers worsened, causing us to slightly tighten lending standards.” – Mid-sized Institution
“Current auditors and compliance exams making officers more aware.” – Smaller Institution
© 2018 Fannie Mae. Trademarks of Fannie Mae. 56
Profit Margin OutlookAppendix
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 57
Profit Margin Outlook – Next 3 Months (by institution size)
Q: Over the next three months, how much do you expect your firm's profit margin to change for its single-family mortgage production? [Showing: (Substantially Increase (25+ basis points) + Moderately Increase (5 - 25 basis points)), About the same (0 - 5 basis points), (Moderately Decrease (5 - 25 basis points) + Substantially Decrease (25+ basis points)]
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Larger Institutions
Increase
About the same
Decrease
Mid-sized Institutions Smaller Institutions
Net increase %(% of lenders saying increase minus % of lenders saying decrease)
Q1 2018 Mortgage Lender Sentiment Survey®
L/M/S - Denote a % is significantly higher than the annual loan origination volume group that the letter represents at the 95% confidence level
n=56 n=51 n=54 n=57 n=56 n=52 n=68 n=50 n=53 n=49 n=53 n=72 n=58
Q1 ‘15
Q2‘15
Q3‘15
Q4‘15
Q1‘16
Q2‘16
Q3‘16
Q4‘16
Q1 ‘17
Q2 ‘17
Q3‘17
Q4'17
Q1'18
36% 38% 43% 34%48% 51% 43%
31% 28% 36% 42%27% 25%
51% 50% 51% 48% 53% 50% 59%42% 52% 41% 48% 53%
37%66% 57% 54% 55% 47% 57% 62%
40%56% 66% 72%
58% 42%L
51%27% 13%
11%
31% 35%29%
11% 16%
36% 14%
12% 9%
41%26% 16% 12%
35% 33% 26%
9%13%
18%25% 19%
14%
28%26%
10% 16% 30%22%
28%
24%18%
17% 12%17% 29%
L
13%36% 43%
56%
20% 14%28%
58% 57%29%
45%60% 66%
S
8%25% 32% 40%
12% 18% 14%
49%34% 41%
26% 28% 49%*S
6% 17%37% 29% 22% 21% 10%
36% 25% 17% 16% 26% 29%
n=47 n=66 n=77 n=59 n=66 n=54 n=58 n=42 n=46 n=57 n=60 n=54 n=48
Q1 ‘15
Q2‘15
Q3‘15
Q4‘15
Q1‘16
Q2‘16
Q3‘16
Q4‘16
Q1 ‘17
Q2 ‘17
Q3‘17
Q4'17
Q1'18
n=77 n=105 n=68 n=70 n=72 n=58 n=65 n=42 n=68 n=70 n=61 n=65 n=78
Q1 ‘15
Q2‘15
Q3‘15
Q4‘15
Q1‘16
Q2‘16
Q3‘16
Q4‘16
Q1 ‘17
Q2 ‘17
Q3‘17
Q4'17
Q1'18
38%
-9%
-30%-45%
11%21%
1%
-47% -41%
7%
-31%
-48%-57%
33%
1%
-16%-28%
23% 15% 12%
-40%
-21% -23%
-1%-9%
-35%*
22%9%
-27%-13%
8%1%
18%
-12% -7%0%
-4% -9%
0%L/M
© 2018 Fannie Mae. Trademarks of Fannie Mae. 58
Profit Margin Outlook – Next 3 Months (by institution size)
Q: Over the next three months, how much do you expect your firm's profit margin to change for its single-family mortgage production? [Showing: (Substantially Increase (25+ basis points) + Moderately Increase (5 - 25 basis points)), About the same (0 - 5 basis points), (Moderately Decrease (5 - 25 basis points) + Substantially Decrease (25+ basis points)]
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
Mortgage Banks
Increase
About the same
Decrease
Depository Institutions Credit Unions
Net increase %(% of lenders saying increase minus % of lenders saying decrease)
Q1 2018 Mortgage Lender Sentiment Survey®
M/D/C - Denote a % is significantly higher than the annual loan origination volume group that the letter represents at the 95% confidence level
n=48 n=66 n=74 n=68 n=61 n=62 n=61 n=49 n=48 n=54 n=66 n=74 n=64
Q1 ‘15
Q2‘15
Q3‘15
Q4‘15
Q1‘16
Q2‘16
Q3‘16
Q4‘16
Q1 ‘17
Q2 ‘17
Q3‘17
Q4'17
Q1'18
n=84 n=98 n=78 n=71 n=80 n=61 n=76 n=50 n=68 n=78 n=68 n=74 n=59
Q1 ‘15
Q2‘15
Q3‘15
Q4‘15
Q1‘16
Q2‘16
Q3‘16
Q4‘16
Q1 ‘17
Q2 ‘17
Q3‘17
Q4'17
Q1'18
n=39 n=48 n=40 n=38 n=46 n=34 n=48 n=29 n=42 n=36 n=36 n=35 n=53
Q1 ‘15
Q2‘15
Q3‘15
Q4‘15
Q1‘16
Q2‘16
Q3‘16
Q4‘16
Q1 ‘17
Q2 ‘17
Q3‘17
Q4'17
Q1'18
42% 44% 49% 41%55% 55% 46% 35% 38% 32%
49%36% 26%
55% 50% 47% 44% 52% 43%59%
34% 42%57% 55% 53% 43%
M59% 61% 57% 62%
45%65% 59%
38%62% 61% 61% 51%
37%^
50%27% 12% 6%
31% 35%29%
12% 14% 29%20%
13%16%
33%26%
16% 21%28%
32%24%
19%19%
24%16% 13%
17%
36% 25%10% 8% 41%
18% 36%
14%
14% 11% 16%20%
25%
8%29% 39%
53%
14% 10%24%
52% 48% 39% 31%51% 59%
D/C
12%24%
38% 34%19% 25% 16%
48% 39%19% 28% 33% 40%
6% 14%33% 30%
14% 18% 5%48%
24% 28% 23% 29% 39%
42%
-2%
-27%
-47%
17%25%
5%
-40%-34%
-10% -11%
-38% -43%
21%
2%
-22%-13%
9% 7% 8%
-29%-20%
5%
-12%-20% -23%
30%
11%
-23% -22%
27%
0%
31%
-34%
-10%-17%
-7% -9% -14%
© 2018 Fannie Mae. Trademarks of Fannie Mae. 59
Increased Profit Margin – DriversWhat do you think will drive the increase in your firm’s profit margin over the next three months? Please select the two most important reasons and rank them in order of importance. (Showing % rank 1 + 2)
Total2016 2017 2018
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
N= 63 49 54 20 26 40 30 29 34
Operational efficiency (i.e., technology) 52% 42% 54% 42% 55% 59% 51% 62% 43%
Market trend changes (i.e. shift from refinance to purchase) 30% 33% 27% 40% 33% 33% 28% 34% 41%
Consumer demand 52% 69% 49% 18% 44% 40% 42% 22% 34%
GSE pricing and policies 17% 10% 17% 20% 19% 13% 11% 36% 29%
Staffing (personnel costs) reduction 9% 12% 14% 33% 9% 8% 17% 16% 15%
Non-GSE (other investors) pricing and policies 13% 2% 4% 11% 7% 3% 17% 13% 8%
Government monetary or fiscal policy 5% 5% 5% 6% 7% 6% 9% 3% 6%
Government regulatory compliance 3% 2% 2% 6% 0% 2% 7% 0% 6%
Servicing cost reduction 1% 4% 4% 0% 0% 12% 4% 3% 4%
Marketing expense reduction 3% 4% 11% 11% 5% 3% 3% 2% 4%
Less competition from other lenders 7% 11% 10% 11% 9% 10% 6% 2% 2%
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
For detailed data by lender size and lender type, please check out the excel file posted on the Mortgage Lender Sentiment Survey web page, together with the report.
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 60
Decreased Profit Margin – DriversWhat do you think will drive the decrease in your firm’s profit margin over the next three months? Please select the two most important reasons and rank them in order of importance. (Showing % rank 1 + 2)
Total2016 2017 2018
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
N= 35 29 33 64 63 49 49 75 85
Competition from other lenders 33% 44% 46% 39% 66% 71% 74% 75% 78%
Market trend changes (i.e. shift from refinance to purchase) 11% 8% 23% 43% 51% 26% 15% 19% 35%*
Consumer demand 25% 6% 21% 26% 10% 18% 35% 30% 22%
Staffing (personnel costs) 26% 12% 31% 19% 7% 21% 17% 29% 12%*
Government monetary or fiscal policy 4% 16% 5% 16% 10% 9% 7% 7% 12%
GSE pricing and policies 13% 22% 6% 20% 13% 9% 7% 5% 10%
Non-GSE (other investors) pricing and policies 2% 10% 4% 7% 8% 10% 0% 3% 8%
Operational efficiency (i.e. technology) 13% 10% 9% 6% 7% 10% 13% 8% 7%
Government regulatory compliance 65% 67% 39% 18% 21% 20% 19% 13% 6%^
Marketing expenses 2% 3% 6% 0% 4% 4% 4% 2% 4%
Servicing costs 2% 0% 9% 2% 2% 0% 2% 4% 3%
* Denotes a statistically significant change compared with Q4 2017 (previous quarter)^ Denotes a statistically significant change compared with Q1 2017 (same quarter of last year)
For detailed data by lender size and lender type, please check out the excel file posted on the Mortgage Lender Sentiment Survey web page, together with the report.
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 61
Survey Question TextAppendix
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 62
Question TextEconomic and Housing Sentimentq1. In general, do you, as a senior mortgage executive, think the U.S. economy overall is on the right track or the wrong track?
q1a. Do you think it is very difficult, somewhat difficult, somewhat easy, or very easy for consumers to get a home mortgage today?
q2. Nationally, during the next 12 months, do you, as a senior mortgage executive, think home prices in general will go up, go down, or stay the same as where they are now?
q4a. By about what percent do you, as a senior mortgage executive, think home prices nationally will go up on average over the next 12 months?
q5a. By about what percent do you, as a senior mortgage executive, think home prices nationally will go down on average over the next 12 months?
Consumer Demandq6. Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family purchase mortgages go up, go down, or stay the same? Please answer for GSE eligible
mortgages, non-GSE eligible mortgages, and Government mortgages.
q7. What do you think drove the change in your firm’s consumer demand for single family purchase mortgages over the past three months? Please be as specific as possible. (Optional)
q14. Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family purchase mortgages to go up, go down, or stay the same? Please answer for GSE eligible mortgages, non-GSE eligible mortgages, and Government mortgages.
q46. You mentioned that you expect your firm’s consumer demand for GSE eligible loans will go up over the next three months. Which of the following housing marketplace factors do you think will drive the demand to go up? Please select up to two of the most important reasons and rank them in order of importance.
q47. You mentioned that you expect your firm’s consumer demand for GSE eligible loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance.
q49. You mentioned that you expect your firm’s consumer demand for Non-GSE eligible loans will go up over the next three months. Which of the following housing marketplace factors do you think will drive the demand to go up? Please select up to two of the most important reasons and rank them in order of importance.
q50. You mentioned that you expect your firm’s consumer demand for Non-GSE eligible loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance.
q51. You mentioned that you expect your firm’s consumer demand for government loans will go up over the next three months. Which of the following housing marketplace factors do you think will drive the demand to go up? Please select up to two of the most important reasons and rank them in order of importance.
q52. You mentioned that you expect your firm’s consumer demand for government loans will go down over the next three months. Which of the following housing marketplace factors do you think will drive the demand down? Please select up to two of the most important reasons and rank them in order of importance.
Q1 2018 Mortgage Lender Sentiment Survey®
© 2018 Fannie Mae. Trademarks of Fannie Mae. 63
Question Text Continuedq10. Over the past three months, apart from normal seasonal variation, did your firm’s consumer demand for single-family refinance mortgages go up, go down, or stay the same? Please answer for GSE eligible
mortgages, non-GSE eligible mortgages, and Government mortgages.
q18. Over the next three months, apart from normal seasonal variation, do you expect your firm’s consumer demand for single-family refinance mortgages to go up, go down, or stay the same? Please answer for GSE eligible mortgages, non-GSE eligible mortgages, and Government mortgages.
q20. You indicated that you expect your firm’s demand to go down for the following types of mortgages. By about what percent do you expect your firm’s consumer demand for single-family refinance mortgages to go down over the next three months?
q21. You said that you expect your firm’s demand to go up for the following types of mortgages. By about what percent do you expect your firm’s consumer demand for single-family refinance mortgages to go up over the next three months?
Profit Margin Outlookq22. Over the next three months, how much do you expect your firm's profit margin to change for its single-family mortgage production?
q23. What primary strategies, if any, is your firm planning to use to address your decreased profit margin? Please select the two most important strategies and rank them in order of importance.
q24. What do you think will drive the decrease in your firm’s profit margin over the next three months? Please select the two most important reasons and rank them in order of importance.
q25. What primary strategies, if any, is your firm planning to use to achieve your increased profit margin? Please select the two most important strategies and rank them in order of importance.
q26. What do you think will drive the increase in your firm’s profit margin over the next three months? Please select the two most important reasons and rank them in order of importance.
Credit Standardsq27. Over the past three months, how did your firm’s credit standards for approving consumer applications for mortgage loans change (across both purchase mortgages and refinance mortgages)? Please answer for
GSE eligible mortgages, non-GSE eligible mortgages, and Government mortgages.
q28. What do you think drove the change in your firm’s credit standards for approving consumer applications for purchase and refinance mortgage loans over the last three months? Please be as specific as possible. (Optional)
q31. Over the next three months, how do you expect your firm’s credit standards for approving applications from individuals for mortgage loans to change (across purchase mortgages and refinance mortgages)? Please answer for GSE eligible mortgages, non-GSE eligible mortgages, and government mortgages.
q32. What do you think will drive the change in your firm’s credit standards for approving consumer applications for purchase and refinance mortgage loans over the next three months? Please be as specific as possible. (Optional)
Q1 2018 Mortgage Lender Sentiment Survey®