Mortgage & Nonmortgage Loan Brokers NAICS 522310

May 2, 2025 - Bond Yields Still Too High

• Bond yields have increased significantly around the world due to the whipsaw back and forth of the Trump administration’s tariff policies, and are threatening to drive up mortgage rates since the two metrics typically mirror each other. The yield on a 10-year Treasury bond, or the amount paid to a bondholder annually, was about 4.3% in early May 2025, a slight dip from record highs in April when Trump tariff threats and a 0.3% contraction of US GDP sent Treasury bonds into sell-off mode. According to Freddie Mac, rates for a 30-year fixed mortgage now sit at about 6.76% in mid-2025, where it has hovered consistently since late Q3 of 2024. The overall jump is likely not enough for the Federal Reserve to lower interest rates in the coming months.
• Mortgage and nonmortgage loan broker industry employment stayed relatively flat throughout 2024 and finished the year down 2.5% in December, according to the US Bureau of Labor Statistics. It is projected to stay at around 1% over the next decade largely due to natural attrition, but increased use of AI and other technology to reduce time with loan processing and other more mundane work is also a contributor. The upshot for those who remain in the industry is that their pay has increased significantly - up 12.8% in December to $38.98 per hour for nonsupervisory workers - as loan brokers are freed up to handle more complex and specialized deals. Today’s loans are also far more complex, requiring brokers to have deep financial and government regulation knowledge, leading to better compensation.

• Consumers who choose mortgage brokers over nonbank retail lenders can save an average of $10,662 over the life of their loan, according to a study conducted by Polygon Research and backed by Willow Canyon Advisors and United Wholesale Mortgage. The study also found that borrowers in the wholesale channel paid less upfront in 2023, a year marked by notably high interest rates. Specifically, those in the wholesale channel paid an average of 115 basis points to secure a 6.58% interest rate, compared to 148 basis points for a 6.60% rate through nonbank retail lenders.
• Smaller nonbank mortgage lenders are exiting the market due to a challenging environment of low origination volume and pressured gain-on-sale margins, according to Fitch Ratings. Employment in the non-bank mortgage industry has decreased 35% compared to peak levels in 2021, according to the Bureau of Labor Statistics. Scaled lenders, equipped with strong franchises and cost-saving initiatives, have weathered the storm more effectively, according to Fitch. "Continued consolidation will further benefit the largest originators, which have strengthened their franchises and will be able to take advantage of their competitive positions once origination volumes resume," the rating agency's researchers said.