Homelight: Lenders Optimistic About 2026 Originations Growth

The 2025 U.S. housing market has been marked by high mortgage rates, elevated home prices and economic uncertainty, but a new HomeLight survey of loan officers at 80 top lending companies found that despite the negatives, most lenders are optimistic about their near-term prospects.

More than 85% of survey respondents expect mortgage originations to rise next year, with 44% predicting gains of more than 10%. About three-quarters cited lower or stabilized mortgage rates as the main driver of increased applications.

“We are heading into a shift,” said Shannon Herrmann, a Montana-based LO. “We’ve hit our bottom for housing stagnation and will see a steady increase in home sales and a decrease in mortgage rates by the third quarter of 2026.”

Move-up buyers are expected to benefit most, with 39% of lenders surveyed predicting that this group will have the strongest outcomes in the coming year. First-time buyers are expected to continue sitting on the sidelines, especially as high prices and difficulty saving for down payments continue to be hurdles.

Rising personal debt is prompting some prospective buyers to test out co-buying or nontraditional arrangements. “Friends, family members, or investors are teaming up to purchase a home together,” Herrmann said.

Non-occupying co-borrowers and gifts from relatives are also becoming more common. But as homeownership becomes increasingly out of reach, HomeLight’s survey found that some buyers are turning to online lenders or unlicensed sales agents, often resulting in poor financial decisions.

Despite these challenges, reduced rates may entice hesitant buyers. “Lower rates [will] motivate buyers who were on the fence to purchase their first home,” said Dennis Bergstrom, a loan officer with more than 20 years of experience.

Home equity will continue to be used for debt consolidation, while AI tools are expected to streamline the mortgage application process. Half of lenders surveyed believe AI will improve efficiency for borrowers and loan officers alike.

Buy-before-you-sell programs are also expected to rise in popularity as 41% of LOs predict that this will be the most popular form of alternative financing next year.

“At the end of the day, it’s all about timing,” said Richie Helali, HomeLight’s enterprise sales manager. “If the average homeowner is looking to buy another property today, using a buy-before-you-sell program gives them the ability to generate a stronger offer on their current home, without the stress of wondering when they’ll make it into their next home.”

Industry experts urge prospective buyers to act sooner rather than later.

“Homebuyers who could have purchased a home in 2025 and are waiting will regret not doing so before mid-2026,” said Arizona-based loan officer Steve Farrington. For younger buyers, lenders recommend flexibility, starting small and consulting professionals to create long-term plans.