What Will Mortgage Industry Look Like in 2025?

As we head on into 2025, it’s high time brokers gave themselves a well-deserved pat on the back. The housing market over the past 12 months has been nothing if not unpredictable – as it ultimately is in any election year. Affordability issues, a lack of housing crisis and rising rates have left both brokers and their clients scratching their heads.

But what, exactly, does the future hold for the US mortgage mart? Will it be a first-time buyer’s dream, an investor’s paradise, or a nightmare for both?

The National Association of Realtors forecasts a 7% to 12% increase in home sales for 2025, with the median home price expected to rise by 2% to $410,700. Stabilizing mortgage rates around 6% are anticipated to attract more buyers, according to Barrons. And, despite current challenges like high costs and mortgage rates, homebuilders are optimistic about improved market conditions in the coming months, with expectations for regulatory relief.

In the face of such uncertainty, a group of mortgage agents explain what homeowners, buyers, sellers, investors and advisors can expect over the next 12 months.

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A significant issue is the nuisance of trigger leads. This practice is disruptive and can erode trust between borrowers and their loan originators. Oftentimes, companies that purchase these trigger leads contact borrowers almost immediately after credit pull, and may even misrepresent themselves, pretending to be associated with the loan officer the borrower originally chose to work with. This not only confuses borrowers but also undermines the professional relationship they’ve established.

I’m really hoping that legislation to ban trigger leads will pass, as it would protect consumers’ privacy and reduce unwanted solicitation. Eliminating this practice would be a win-win for both consumers and professionals in the industry. Borrowers obviously have every right to shop around for the best mortgage rates and services, but they shouldn’t be subjected to unsolicited contact from unscrupulous companies trying to poach business under false pretenses.

One notable trend I anticipate in 2025 is the ongoing emphasis on, and attention to, technological advancements. This includes things that streamline loan processing and improve automation, helping to make the mortgage application process faster and more accessible for borrowers.

In Alaska, housing demand in smaller communities like Wasilla may grow as remote work trends continue to drive people toward suburban and rural areas. VA loans, in particular, are poised to remain a strong option for Alaska’s large veteran community, offering competitive benefits even amid shifting market conditions.

A significant challenge will likely continue to be navigating fluctuating interest rates. The Federal Reserve’s policies and broader economic conditions could create variability, requiring adaptability from brokers and careful financial planning for clients.

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At Bennett Capital Partners Mortgage, we anticipate 2025 to be a year of growth for innovative loan programs, technological advancements, and increased demand for flexible real estate financing options.

• Growth in non-QM mortgages – demand for programs like DSCR loans, bank statement loans, and 1-year tax return mortgages – will rise as self-employed and non-traditional borrowers seek flexible options.
• Tech-driven mortgage solutions – AI-powered underwriting and digital tools will streamline approvals, but balancing technology with personal service remains crucial.
• Investment property financing – The demand for bridge loans, DSCR loans, and private lending will grow, particularly in competitive markets like Miami.
• Florida real estate growth – Luxury condos, branded residences, and single-family homes remain in high demand, driven by buyers relocating for tax benefits and lifestyle.
• Interest rate volatility – While rates may stabilize by mid-2025, market fluctuations will create opportunities for rate locks and refinancing.

I definitely see some continuations from 2024 [such as] continued growth in digital tools, AI underwriting, and e-closing adoption to improve efficiency, increased focus on creative financing for first-time buyers, and affordable housing initiatives. I [also predict] more demand for non-QM products to help safely structure clients’ needs.

With the new administration coming in January, I see a possible overhaul of compliance rules that may be pushed down to state levels, thus pulling the fangs from the CFPM and DOJ. Rates are the $1 million question – I don’t see them getting back into the low 4s. However, I see homeowners, and I’m [actually] witnessing this now, settling in on the current rate environment and how they can afford their new or existing home.

This article was originally published in www.mpamag.com