Blog
Reflections on 2024: Key Challenges and Opportunities in the Mortgage Industry
As 2024 comes to a close, we gathered marketing insights and surveyed key executives at Blue Sage Solutions to reflect on the year’s defining moments and their impact on the mortgage industry. This collaborative effort highlights the challenges we’ve faced, the opportunities we’ve seized, and the lessons that will shape our path forward.
Below, we’ll explore the economic pressures, regulatory shifts, and technological innovations that tested our adaptability and inspired reinvention. From navigating rising interest rates and housing constraints to leveraging cutting-edge technology that accelerates processes and improves borrower experiences, this year demonstrated the importance of resilience, collaboration, and innovation.
One of the most defining challenges of 2024 was the impact of rising interest rates and market volatility.
Homebuyers and lenders alike felt the strain as higher rates increased the cost of borrowing, cooled refinancing demand, and created uncertainty for many looking to enter the housing market. With affordability being a top concern, many buyers paused or reconsidered their plans, reshaping the flow of demand across the housing ecosystem. This reality underscored the need for Blue Sage Solutions—as well as lenders, brokers, and other industry partners— to stay connected, adopt flexible strategies, and make the most efficient use of their resources to build trust during more turbulent times while preparing for the future.
Navigating evolving regulatory requirements in 2024 added complexity to the mortgage and real estate landscape.
Key regulations included enhanced scrutiny around data privacy and cybersecurity, driven by amendments to laws like the California Consumer Privacy Act (CCPA), which increased data protection requirements for companies handling personal data. Additionally, updated guidelines from the Consumer Financial Protection Bureau (CFPB) focused on fair lending practices and greater transparency in mortgage disclosures, emphasizing consumer protection and market integrity.
Real estate professionals, lenders, and appraisers needed to stay well-informed of these changes to mitigate compliance risks and ensure adherence. We ensured that all of our solutions, including our Digital Servicing Platform for Interim Servicing, enabled our customers to avoid regulatory risk with real-time state and federal updates.
Housing market constraints, particularly low inventory, rising construction costs, increasing insurance costs, and affordability pressures remained major challenges throughout 2024.
Limited supply in key markets, compounded by the escalating costs of building materials and labor shortages, put upward pressure on home prices, creating frustration for both prospective buyers and real estate professionals trying to meet demand. And 2024 continued a troubling trend of major floods and wildfires across the country, causing significant environmental, economic, and social impacts—and driving the cost of food and hazard insurance through the roof. Some states, including California and Florida, even saw insurers halt new homeowner coverage or withdraw entirely due to escalating risks from escalating natural disasters and financial challenges.
These dynamics underscored the need for creative solutions, partnerships, and policy discussions around zoning reform, building incentives, and strategies to reduce construction expenses to make housing more accessible and affordable. We streamlined and expanded partnerships to deliver Blue Sage Solutions customers an ever-improving experience. Many of our customers have moved into new markets and focused on new revenue opportunities, like HELOCs, to diversify their portfolio and be able to offer new and in-demand services to customers. Through Blue Sage Solutions’s technology, we’ve worked with some of our customers to bring approval times down from several days—to as little as 32 minutes—with no additional resources on the lender’s team!
Amid these challenges, 2024 brought a wave of technological opportunities that will reshape our industry for the future.
While there never seems to be an ideal time to transition to new technology, we saw lenders evaluating their technology stack to look for opportunities to provide a great experience for their customers, loan officers, and operations teams alike.
Digital transformation continued to accelerate with new technology and AI-driven tools, improving the efficiency, accuracy, speed, and scalability of lending and appraisal processes. Companies—and their customers— that embraced technology found themselves able to offer better experiences for borrowers, streamline operational costs, automate more tasks, easily support new channels of business, expand into new markets, and unlock new insights from vast amounts of data.
The industry also experienced ongoing consolidation, with mergers and acquisitions significantly reshaping the competitive landscape.
And some companies, unable to keep up with rising operational costs and regulatory demands, exited the market altogether, while others formed strategic alliances to pool resources and technology in pursuit of greater efficiencies. This trend highlighted the critical need for adaptability, as well as the importance for smaller and mid-sized players to clearly define their value propositions in order to remain competitive in an evolving market.
Looking back, 2024 was a year of both recalibration and reinvention. By facing these challenges head-on and leveraging emerging opportunities, the industry demonstrated remarkable resilience and agility. As we reflect, we are reminded of the power of adaptability, collaboration, and a forward-thinking mindset that will continue to guide us in the years to come.
Dee Khullar
Blue Sage Solutions Head of Marketing