DataDigest: The winners of the acquisition market

For all of the confusion and volatility that the pandemic precipitated the mortgage business, it was clear that the near-zero rates of interest have been all the time going to be short-term. After many warnings, The Fed lastly made its transfer in March 2022. Its aggressive inflation-crushing coverage extinguished the best refi market in historical past – as of late, practically 90% of residential mortgage originations are buy loans.

In April 2022, HousingWire printed a characteristic about which lenders have been properly positioned to capitalize on the transition to buy, and which corporations would wrestle. On this week’s version of DataDigest, I’m going to look at which lenders have carried out the most effective in buy for the reason that first quarter of 2022. 

For this train, I’ll be counting on Inside Mortgage Finance knowledge and taking a look at origination quantity, buy market share share and the lender’s general combine.

In line with IMF’s knowledge, United Wholesale Mortgage was the highest buy lender within the first three months of 2022. UWM originated $19.1 billion in buy mortgages, good for five.4% of the acquisition market. The wholesaler’s combine was 49% buy, 51% refis, about common. 

Subsequent up? Pennymac, which originated $17.3 billion in buy mortgages within the first quarter of 2022. The lender commanded 4.8% of the acquisition market, and purchases represented 52.2% of its combine. 

And right here’s the remainder of the highest 25 in Q1 2022 and Q1 2023:

The information reveals {that a} clear winner is UWM, which has pulled out all of the tips of the commerce to juice its buy enterprise during the last 12 months. UWM ended the primary quarter of 2023 with a 7.7% share of the acquisition market and practically similar origination quantity at $19.2 billion. Whereas Pennymac topped UWM in each market share share (8.2%) and buy quantity ($20.6 billion), nearly all of its buy enterprise is shopping for loans by way of the correspondent channel. It’s a low-margin enterprise and fairly a unique animal than retail and wholesale, although Pennymac needs to be given kudos for snagging market share from huge banks. 

And what would a mortgage rating be with out Rocket Mortgage

Within the first quarter of 2022, Rocket Mortgage originated $12.5 billion in buy mortgages and captured 3.5% of the acquisition market. Solely 23% of its origination quantity was buy, according to servicer/refi specialists Freedom Mortgage and Mr. Cooper. Within the first quarter of 2023, Rocket originated $9.4 billion in buy mortgages and its share of the acquisition market elevated to three.8%. About 56% of the lender’s origination quantity was buy; solely Mr. Cooper’s share at 52% was decrease. So whereas Rocket did enhance each its share of the acquisition market and its combine, it was outpaced by arch-rival UWM and continues to be extra reliant on refi enterprise than its rivals. 

Let’s break the chart down additional. In April 2022, we wrote that lenders with name center-heavy enterprise fashions would probably wrestle to adapt to the altering buy market, which is closely reliant on actual property agent referrals. Against this, lenders with distributed retail and broker-reliant fashions would carry out properly. 

That has largely been true, however not totally. I’d have anticipated Assured Price, Fairway Unbiased Mortgage, Guild Mortgage, CrossCountry Mortgage and Motion Mortgage to extend their buy market share percentages within the 12 months for the reason that price hikes went into impact. As a substitute, Assured Price slipped from 3.1% buy market share in Q1 2022 to 2.6% in Q1 2023. Fairway dropped from 2.4% to 2.2.%; Guild 1.1% to 1.0%; and CrossCountry 1.7% to 1.6%. Motion elevated its buy market share to 1.6% in Q1 2023 from 1.4% a 12 months prior. 

Different notable modifications: 

  • Homepoint generated $5.6 billion in purchases within the first quarter of 2022, however was all however defunct by spring of 2023. A lot of the wholesaler’s enterprise went to UWM. Can UWM preserve that enterprise going ahead? 
  • Wells Fargo and JPMorgan Chase, which respectively had 4.7% and three.5% of the acquisition market in Q1 2022, each pulled again closely on residential mortgages. They every ended the primary quarter of 2023 with a 2.2% share of the acquisition market. JPMorgan will probably climb the rankings within the coming quarters after having absorbed First Republic, which ended the primary quarter of 2023 because the twenty third largest buy lender in America. 
  • NewRez/Caliber commanded 4.0% of the acquisition market after the primary quarter in 2022, however a 12 months later it declined to 2.3%. The agency has leaned into its strong servicing enterprise, which has insulated it from the origination market’s chill. Its mum or dad firm Rithm Capital has additionally been vastly diversifying its enterprise and is contemplating spinning off its mortgage enterprise.
  • The homebuilder lending corporations took full benefit of the frozen present residence gross sales market. DHI Mortgage, the lending arm of D.R. Horton, originated $4.5 billion in buy mortgages within the first quarter of 2022, good for 1.2% market share. A 12 months later, DHI Mortgage originated $5 billion in buy mortgages in Q1 2023 and owned 2.0% market share. Lennar Mortgage had the same story – its market share elevated to 1.3% from 0.8% a 12 months prior. 
  • Different huge buy market winners embody Planet House Lending, which has grown to develop into a prime authorities correspondent lender. Planet ranked because the eighth-largest buy lender in America within the first quarter of 2023 with $5.7 billion in buy origination quantity, capturing 2.3% of the market. It wasn’t even within the prime 20 a 12 months prior. The corporate picked up Homepoint’s correspondent enterprise and has been additionally trying to purchase MSRs; in June it picked up a $10 billion portfolio of Ginnie loans.
  • LoanDepot fell from the Tenth-largest buy lender in America within the first quarter of 2022 with 2.2% market share to the seventeenth largest a 12 months later with simply 1.4% market share. Nonetheless, it has repositioned its enterprise for the acquisition market – 72% of its origination quantity in Q1 2023 was buy, up from 37% a 12 months prior. After a number of quarters of economic losses, there are indicators pointing to enhancements on the California lender.

In our weekly DataDigest publication, HW Media Managing Editor James Kleimann breaks down the largest tales in housing by way of an information lens. Enroll here! Have a topic in thoughts? E-mail him at [email protected].