Data across Curinos’ retail consortium reveal that independent mortgage banks outperformed depository institutions amid a broader contracting market in the latest quarter.
Average mortgage volume across the market in Q4 2023 was down 25% from their levels in the third quarter. IMBs were down 23%, while banks and credit unions saw a 28% drop Q/Q (see chart). This five percentage point gap was largely a result of stronger appetite for loans held for sale following a decline in rates from their October highs – this decline stimulated conforming and government offerings and constrained non-agency demand.
Balance sheet lending continued to be less of the total mortgage volume. This decline may be a response to proposed changes to capital requirements that disproportionately impact the competitive advantage held by banks and credit unions.