How Long Will The Mortgage Boom Last? – February 19th, 2020

Issue 11: On Making the Most of Sunny Days, How long with the mortgage boom last? 

Even in the depths of winter (at least, for those of us in the northeast, Midwest and Northwest!), it seems the sun is shining on the mortgage and real estate industry. The positive headlines are everywhere: refinancing remains improbably strong; the purchase market is only getting better; housing starts are up; Fed rates are infinitesimal and the recession some have long been calling for has yet to arrive. It may never arrive, in fact.

The housing and real estate industry, we’re being told, is actually one of the engines driving this period of prosperity. That’s a welcome change from the years of bashing we endured after 2008.

Of course, we have a vested interest in the technological perspective too here at LodeStar. Those headlines are equally positive. The industry is finally grasping the importance of the use of tech and automation to streamline our antiquated processes, and not just the point-of-sale stuff. MReport recently ran a great article pointing out that fintech lending alone will hit a $312.6 billion transaction value this year…growing 17% annually! We’ve also heard dozens of anecdotes from our partners and clients that January, 2020 was unusually profitable, in spite of the traditional beginning of what we politely call “seasonality.”

While we applaud the hard work being done by the industry and are thrilled to see how well things are going, we briefly interrupt the celebration to provide a humble reminder to make hay while the sun shines. We all know that this is a cyclical industry. We also know that the past decade has seen great and unusual changes to those traditional cycles. So much is changing that perhaps we haven’t figured out the “new” cycles just yet. And while this is most certainly not an effort to bring the party screeching to a halt, it is a humble reminder that now is the time to shore up your operations, make the investments you’ve been promising to make and, above all, to not let up on your continuous improvement initiatives. These are the days when such exercises can be most fruitful. You’re probably staffed up and you probably have the working capital to get it done. So, if not now, when?

We believe that great things are coming for our industry. With a new emphasis on embracing change and improving process, we’re finally leaving behind the decades-old mantra of “if it ain’t broke, don’t fix it.” If that latter statement were really true, we’d all still be riding horses and waiting for telegrams. Let’s embrace the positive change and ask how we can apply it to our own programs, if not even improving upon it!

Until Next Week,

Jim

P.S. Want to be featured in an upcoming Deeper Thoughts? Please email me at jpaolino@lssoftwaresolutions.com

 

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