Mortgage Lending Market Expected to Reach $27,509.24 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Mortgage Lending Market," The mortgage lending market was valued at $11,487.23 billion in 2021, and is estimated to reach $27,509.24 billion by 2031, growing at a CAGR of 9.5% from 2022 to 2031.

The shift to digital platform of mortgage lenders is driving the growth of mortgage lending market globally. Moreover, increasing implementation of technologies such as automation of underwriting processes, artificial intelligence (AI) and machine learning (ML) is propelling the mortgage lending market growth. However, risk of losing collateral and asset depreciation is restraining the growth of mortgage lending market. On the contrary, initiatives of banks and government authorities in the mortgage lending market is expected to create lucrative opportunities for the mortgage banking to grow in upcoming years.

For instance, in India, higher disbursals of mortgage loans have been made possible by government initiatives like extending emergency credit line guarantee scheme (ECLGS) support of about $4 million, regulatory reforms like loan restructuring, and the quick implementation of these initiatives by the lenders using data analytics. These initiatives have strengthened MSMEs in the region which has benefited the mortgage lending industry.

By provider, the primary mortgage lender segment acquired a major share. Originators and mortgage bankers are not banks in and of themselves; rather, they assist in the transaction and submit the mortgage request to a bank for loan closing. Since they direct clients to primary lenders, the brokers are paid for their services. The borrowers, on the other hand, stand to benefit by having the broker look around for the best offer based on the borrower's credit and the requested parameters. Therefore, these are the major trends for primary mortgage lender.

Region wise, North America dominated the mortgage lending market size in 2021. This was attributed to the fact that the federal government created several programs, or government sponsored entities, to foster mortgage lending, construction and encourage home ownership. These programs include the Government National Mortgage Association (known as Ginnie Mae), the Federal National Mortgage Association (known as Fannie Mae) and the Federal Home Loan Mortgage Corporation (known as Freddie Mac). Hence, the region has largest mortgage lenders globally. Thus, these increasing initiative by the government is fueling the growth of the market in the region.

Mortgage rates decreased significantly as a result of the Federal Reserve's initiatives to make it simpler for people to borrow money during the pandemic, however they have recently started to rise again. On the other hand, a lot of people have struggled to keep up with their mortgage payments as a result of job loss brought on by COVID-19. As part of the CARES Act, Congress gave COVID-19-affected Americans the ability to request mortgage forbearance for up to a year in increments of six months if they had a government-backed loan.     

KEY FINDINGS OF THE STUDY

• On the basis of mortgage loan term, the 30-year mortgage segment accounted for the highest mortgage lending market share, in terms of revenue in 2021.
• On the basis of interest rate, the adjustable-rate mortgage loan segment is expected to exhibit the fastest growth rate in the mortgage lending market trends.
• On the basis of region, North America generated the highest revenue in 2021.  

The key players operating in the mortgage lending market analysis include Ally Financial Inc., Bank of America Corporation, BNP Paribas Fortis, Citigroup, Inc., Fannie Mae, JPMorgan Chase & Co, Mr. Cooper Group Inc., PT Bank Central Asia Tbk, QNB, Royal Bank of Canada, Rocket Mortgage, LLC, Social Finance, Inc., Standard Chartered, Truist, Wells Fargo, ClearCapital.com, Inc. and Roostify, Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry