The mortgage industry is set to experience a modest growth in 2021, according to a recent report from EY. The report forecasts that mortgage lending will increase by 0.4% in 2021, with the majority of the growth coming from refinancing activity. This is a welcome sign for the mortgage industry, which has been struggling in recent years due to the economic downturn.
The EY report suggests that the increase in mortgage lending will be driven by a number of factors. First, the low interest rate environment has made it easier for borrowers to refinance their mortgages. This has led to an increase in refinancing activity, which is expected to continue throughout 2021. Additionally, the report suggests that the housing market is stabilizing, which could lead to an increase in new home purchases.
The EY report also notes that the government’s recent stimulus package could have a positive effect on the mortgage industry. The package includes an extension of the mortgage forbearance program, which allows borrowers to temporarily pause their mortgage payments. This could help to reduce delinquencies and defaults, which would be beneficial for the industry.
Despite the modest growth forecasted by EY, there are still some risks that could affect the mortgage industry in 2021. For example, the pandemic could continue to impact the economy, which could lead to a decrease in demand for mortgages. Additionally, rising unemployment could lead to an increase in delinquencies and defaults.
Overall, the EY report suggests that the mortgage industry is on track for modest growth in 2021. The low interest rate environment and government stimulus package should help to support the industry, while rising unemployment and the pandemic remain potential risks. As such, it is important for lenders to remain vigilant and prepared for any potential changes in the market.