Mortgage market survey: October 2021

Mortgage market conditions October 2021 Tom LaMalfa
In early October 2021, I conducted my 26th survey of the mortgage banking industry experts' thinking, responses and expectations regarding current market conditions. It's the latest in a survey series dating back to May 2008, one I've conducted every 6 months since.

This survey polled 34 senior executives from 34 separate mortgage companies. The executives answered 67 questions on a broad array of issues and topics both germane and consequential to lenders and the industry. Those surveyed represented 17 financial intermediaries and 17 IMBs of widely varying sizes. Individual firms’ production volumes ranged from $165 million to over $200 billion last year. The group mean was $38.4 billion of production and the group median was $15 billion. Among the firms surveyed were 21 of the 75 largest originators of agency loans. In total, the survey group accounted for $1.4 billion of 2020’s $4.1 billion of originations, or 34%.

In this post, I focus on what stood out for me as the most important takeaways from the research.

Finding I: Re-opening of lenders’ offices and new staffing arrangements are becoming much clearer

Although decisions on staffing and office operations, both in-house and remote, remain subject to the whims of the pandemic, executives’ responses to several questions suggest 2022’s organization chart is foreshadowed. The questions looked at office opening postponements, the percent of employees in the office full-time today, whether employee churn would accelerate if management took too hard a line against work from home (WFH), and what percent of the company’s employees will be back to their office desks in January 2022.

Here’s what I learned in response to these questions:

  • Has COVID-19's resurgence postponed your firm’s reopening to employees? Y-27/N-7
  • What percent of your firm’s employees are currently in the office full-time? Mean-21.9%/Median-10%
  • Will a tough stance against employees working remotely accelerate churn? Y-30/N-4
  • What percent of your employees do you expect to be back at their office desks in January 2022? Mean-36.5%/Median-30%

It appears that COVID-19's resurgence has postponed office re-openings for most employees, that only 10-20% of employees are in the office full-time today, that inflexibility on the part of management will accelerate employee churn, and that about one-third of mortgage company employees will likely be back to the office in 2022.

Other questions asked: What percent of the companies’ workforce was WFH, did lenders think that percentage would change much next year, what percent of senior management currently works from home 2 or more days per week, how challenged are managements in getting employees back to the office, whether management was getting pushback from employees about returning, and whether the return resistance was broad-based or coming from the youngest, newest employees?

  • Permanent WFH accounts for what percent of your firm’s workforce? Mean-42.6%/Median-40%
  • Do you expect this percentage to change much in the next year? Y-7/N-27
  • What percent of senior management currently works from home 2 or more days per week? Mean-59.7%/Median-80%
  • How challenging will it be to get employees back to the office? (Scale of 1-10) Mean-6.8/Median-7
  • Is management getting pushback from employees about returning? Y-23/N-11
  • Is the pushback coming from your firm’s youngest, newest employees? Y-5/N-29 

The overwhelming number of executives reported that the (permanent) WFH force was not expected to change much in 2022. If so, today’s 40% average will likely stand in the months ahead. As for rounding up the troops and directing them back to the office, the challenge has been significant because the pushback is broad-based.

Two other related questions were asked:

  • Is remote work adversely affecting customer service? Y-5/N-29
  • Does reduced commuting time account for the bulk of productivity gains? Y-27/N-7

According to the lion’s share of executives, customer service isn’t being adversely affected by WFH, a major positive. And yes, the bulk of the productivity gains are reportedly due to reduced drive times.

However, according to those surveyed, there are risks (costs) resulting from WFH. 

  • Are corporate culture, cohesion & collegiality at risk from WFH? Y-31/N-3 

The 34 executives, in a landslide response, agreed that WFH risks damaging corporate culture, corporate cohesion and the collegiality that comes from close physical association among employees at work and outside the office.

The questions with the least direct answers involved lenders’ employee vaccination policies:

  • Will your firm require employees to be vaccinated in order to return to work? Y-7/N-21 
  • Is testing an option for the unvaccinated at your firm? Y-11/N-13

Barring a federal mandate, most mortgage company employees will not require a COVID-19 vaccine to return to the office. Testing appears to be an option for the unvaccinated to return to the office. However, most lenders aren’t requiring vaccinations or regular testing before returning to work, if only for the time being.

Finding II: Executive expectations and outlook on several factors affecting mortgage lending

The executives were asked: What’s the outlook for the residential market next year? Will margins be squeezed further; will inflation hit 5% in 2022? How about home prices, further double-digit increases going forward? And what about supply: Will listings of existing homes for sale start to climb with house prices now at record levels? 

  • Scale of 1-10, how bullish are you on the outlook for the residential market in 2022? Mean-6.1/Median-6.5
  • Do you expect margin pressure to worsen next year? Y-33/N-1
  • Are you expecting a significant increase in inflation next year, to over 5%? Y-12/N-22
  • Will HPA continue at a double-digit pace in 2022? Y-5/N-29  
  • Expect the number of homes for sale to increase substantially next year? Y-12/N-22

The responses show the executives are positive on the market outlook for next year. Meanwhile, it looks like a more average year ahead (similar to 2018?) with weaker profits due to thinner margins.  As for inflation, home price appreciation (HPA) and inventories, the consensus among those surveyed was for moderately higher inflation, a reduction in the upward trajectory of HPA, and no big jump in the inventory of existing homes for sale. 


2021 was the second straight near-record year for production – $3.85 trillion – and revenue, and a diminished but still good one for margins, especially in the retail channel. Lenders appear clear-eyed about the prospects for next year. MBA forecasts a 3.9% advance in GDP led by strong consumption and business fixed investment. Refinance activity is expected to drop dramatically, to about one-third of this year’s volume. Mortgage rates, at an 8-month high today, are expected to gradually creep up to 4% by year-end 2022. Hiring continues to be the norm across the industry as it is nationwide. Lenders’ answers to survey questions suggest that they agree with the MBA’s predictions for next year. Plans are ready for the year ahead, and it certainly appears that lenders are comfortable with hybrid staffing, a hybrid workforce and a physically reduced workplace. Existing organizational arrangements are now largely in place and reflect the documented success of WFH since early 2020. Today, going with the flow means flexibility is a must.

The opinions and insights expressed in this blog are solely those of its author, Tom LaMalfa, and do not necessarily represent the views of either Mortgage Guaranty Insurance Corporation or any of its parent, affiliates, or subsidiaries (collectively, “MGIC”). Neither MGIC nor any of its officers, directors, employees or agents makes any representations or warranties of any kind regarding the soundness, reliability, accuracy or completeness of any opinion, insight, recommendation, data, or other information contained in this blog, or its suitability for any intended purpose.

Tom LaMalfa

Tom LaMalfa, President, TSL Consulting

Tom LaMalfa is a 40-plus-year veteran mortgage-market analyst and researcher. He has done pioneering work in the areas of secondary markets, wholesale mortgage banking, mortgage brokerages, financial benchmarking and GSE reform. He may be reached by e-mail at


Ric Spiehs

Thank you Tom. This is very informative. We appreciate your efforts.

Tom OConnor

Always helpful to get a consolidated yet broad view of the market from the participants who are assembled for the survey.

Gary Clark

Another great survey by Tom and some key information about remote workforce and the overall market heading into 2022.

Joe Lindau

Always insightful Tom and I look forward to reading the opinions of those on the front lines.

Deb Jones

Thank you Tom, for your continued insights into lender sentiments on the market!

Eric Stoddard

Great insights into our industry trends and issues. Thank you Tom.


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