Mortgage bonanza: Major home loan trends of 2018

There had just been $262 billion in mortgage originations to purchase new homes and $153 billion spent on refinanced mortgages by the end of 2017's fourth quarter, according to Statista. 2018 has been widely predicted to follow a similar trend, particularly because of the expected decline in home prices and increase in houses for sale during the year. NerdWallet noted that this could be good motivation for first-time buyers, which would notably increase overall originations even among underbanked and unbanked purchasers.

What isn't quite as clear is whether the types of loans homebuyers choose have changed or not, as well as the outlets prospective buyers patronize when seeking such financing. Let's take a look at some of these factors and how they may come into play within the mortgage market during the year:

Summer causes spikes in activity, as expected
Historically, spring and summer have been the most robust seasons of the year in terms of home-sale volume, and 2018 is no exception thus far. According to Bankrate, this might cause a flurry of homebuying activity through the first half of July until the Federal Reserve's hikes in benchmark interest rates go through. Before the hike, there will likely be plenty of 15- and 30-year fixed-rate mortgages agreed upon based on the security this provides - both of which currently have rates below 5 percent. By contrast, after the increase, borrowers might be more willing to take a chance on an adjustable-rate home loan.

There has been no shortage of mortgages in the past year.

The most popular mortgage?Buyers leaning toward local lenders
The lenders that prospective homebuyers work with is just as important - and sometimes more so - than the specific home loan they pick out. According to another piece in NerdWallet, borrowers seem to be leaning toward local lenders with greater frequency than ever, beating out large institutions in 31 U.S. states. Credit unions have also grown in popularity for similar reasons, as well as their growing interest in alternative credit data. 

Despite the shifts caused by trends, some aspects of homebuying remain consistent. Ditech pointed out that the 30-year fixed-rate mortgage remains the most popular home loan type in America, just as it has for the past several decades, due to its familiarity and dependability. It makes it easier for homeowners to make a larger down payment - maybe even the fabled 20 percent that allows you to avoid mortgage insurance - knowing that future installments won't be as weighed down by interest as they might ordinarily be.