Mortgages Market | Market Research | Industry Analysis

Mortgage refers to any loan in which a property or real estate is used as collateral. The global mortgages market includes companies or trusts that service, originate, purchase or securitize residential or commercial mortgage loans. The market also includes trusts that invest in mortgage-backed securities and other mortgage-related assets.

Residential real estate dominates the global mortgages market by type. North America dominates the global mortgages market by region, driven by the growing prominence of robotics and automation in mortgage lending processes. However, factors such as the rising affordability for residences in emerging economies are expected to drive market growth in APAC during the forecast period. Additionally, trends such as growing consolidation activity in the global mortgages market are expected to characterize market growth during the forecast period.

Many factors are expected to influence growth in the global mortgages market during the forecast period. Our analysis identifies the following factors to be driving the growth of the global mortgages market:

Demand for efficiency in lending operations

Owing to the rising demand for efficiency in lending operations such as loan servicing, mortgage providers are adopting technology-based solutions to improve their operational efficiency and reduce costs. Mortgage organizations also outsource their loan servicing needs to third-party organizations or agencies. The use of technology enables mortgage lenders to reduce turnaround time and increase productivity without affecting processing accuracy. The high demand for efficiency in lending operations is expected to aid the growth of the global mortgage market during the forecast period.

Rising prominence of robotics in mortgage lending

While several mortgage lenders are emphasizing on achieving cost-cutting objectives through business process outsourcing and improved technology platforms, the adoption of robotics and automation offers a significant opportunity to improve efficiency in the global mortgage market. The adoption of robotic process automation enables mortgage lenders to improve process efficiency, reduce operational costs, and reduce turnaround times.

High affordability for residences in emerging economies

Factors such as the rapid economic growth in emerging countries such as South Korea, India, and Indonesia, and the rising per capita income among consumers have contributed to the prominence of affordable housing in these countries. Additionally, mortgage lenders offer attractive interest rates to prospective homebuyers to bring in more buyers and boost the residential real estate sector in these countries. These factors are expected to drive the growth of the global mortgages market during the forecast period.

Meanwhile, the vendors operating in the market face numerous challenges in increasing their sales and improving profitability. Some of those challenges are:

Tight housing supply in developed countries

Countries such as the US have witnessed tight housing supply over the last few years, with increasing upward pressure on home prices. The housing market in these countries is predominantly beneficial to sellers, with factors such as rising prices impacting the affordability of residential real estate and limiting the choices of buyers. The high home prices in these markets are expected to impact the growth of the global mortgages market during the forecast period.

Compliance and regulatory challenges

Governing bodies subject financial institutions to follow certain requirements, regulations, compliances, and guidelines, with the aim to maintain the integrity of the financial system. Regulations in the finance industry are not new but have been changing drastically over the past decade. Adhering to these regulations across different regions can be a challenging task for lenders. For instance, Basel III is a standard regulation that all the banks from different regions need to follow. It is a set of international banking regulations developed by the Bank for International Settlements to promote the stability of the international financial system.

Data privacy and security issues related to the adoption of technology in mortgage lending

A majority of the financial organizations worldwide, including SMEs and large organizations, have started using cloud-based software services as they are cost-effective, scalable, and easy to use. Cloud-based solutions provide end-users with quick and inexpensive access to software programs. These solutions are scalable, which is important for early-stage organizations. However, the adoption of technology poses considerable concerns related to aspects such as data security and privacy. Cyber attackers can gain access to data storage systems as cloud-based infrastructure is based on open architecture and shared resources.

The global mortgages market can be segmented into the following:

By type

Residential real estate
Commercial real estate

By region

North America
Europe
APAC
South America
MEA

The global mortgages market is fragmented with the presence of several international and regional players. We provide a detailed analysis of around 25 vendors operating in the global mortgages market, including some of the prominent vendors such as Wells Fargo & Co., JPMorgan Chase & Co., Orix Corp., Freedom Mortgage Corp., and Gateway Mortgage Group LLC. Mergers, acquisitions, and partnerships are among the strategies adopted by vendors in the global mortgages market.

Taylor Morrison announced its plans to acquire William Lyon Homes, a US-based builder. The acquisition will combine the mortgage business divisions of both parties.
Orix Corp. announced its agreement to acquire Hunt Real Estate Capital, a commercial real estate lender based in the US.

Backed with competitive intelligence and benchmarking, our global mortgages market research report is designed to provide entry support, customer and M&A assessment, as well as go-to-market strategy support.