Recent data from Inside Mortgage Finance shows a significant leap in broker market share, jumping to 24.3% in Q4 2023, the highest number we’ve seen since 2009. This is a true testament to the care, commitment and passion brokers across the country have for their borrowers.
The big question is, what caused this increase?
First and foremost, there has been a noticeable shift in consumer behavior. Market volatility and rising rates have made borrowers more sensitive to the ever changing market, resulting in them becoming more informed on their options when choosing a lender and the benefits of working with an independent mortgage broker. They see first-hand the immense value in having access to multiple lenders and product options, local expertise and personalized services catered to their individual and financial needs. The significant cost savings of working with an independent mortgage broker has also become more widely known. Government data from HMDA shows borrowers are saving, on average, over $9,400 over the life of a loan. The increased awareness around these benefits have positioned brokers to be the obvious choice when it comes to consumer mortgage needs, keeping them competitive with large banks and retail lenders.
Second, nearly 20,000 loan officers moved into the wholesale channel in 2023. Similar to consumer awareness, retail LO’s are learning the benefits of being independent. They are realizing the captive nature of retail has limited their ability to provide options to their borrowers. This coupled with the eye-opening reality that the technology, efficiency and service available with wholesale lenders is superior to what many have access to in retail has made the broker model more attractive to both new and seasoned loan officers.
So, what exactly does this mean for the industry?
The value of options, access and personalized service has never been stronger. The local expertise, product and price options paired with unmatched speed and customer service have become non-negotiable for borrowers. This exceptional service is what keeps brokers memorable and top of mind for referral and repeat business down the road. Mortgage brokers, previously seen as the underdogs, are now significant players. The broker model is not just surviving but thriving and will continue to gain market share in the lending landscape.
There’s no denying the broker channel has the momentum it needs to keep growing. With a continued focus on delivering options and exceptional service to borrowers across the nation, we are confident the broker channel will continue to grow.
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