In many ways, today's shifting housing market resembles the real estate climate of the 1980's, according to Freddie Mac. The company's November Insight & Outlook report examines the changes in mortgage servicing, discusses some of the factors that produced them since the housing crisis, and looks at the highly influential role the 55+ age cohort plays in today's housing market.
"Prior to the housing crisis and Great Recession, mortgage servicing had followed a decades-long trend of consolidation,” says Sean Becketti, Chief Economist, Freddie Mac. “In 2001, the top five servicers handled 37 percent of all servicing. By 2009, the market share of the top five had grown to 59 percent. But during the recession, this trend reversed, and by the second quarter of 2015 the share of the top five servicers shrank to 40 percent. In many ways, today's market resembles the 1980's where smaller servicers and nonbank servicers held a higher share before the industry started to consolidate. Housing finance is still evolving, and mortgage servicing is likely to continue to change along with it. It's too soon to say if recent trends will persist or be reversed."