Last year, MBA Annual felt like an industry preparing for growth. This year, the conversations were more practical. With mortgage rates staying high and lending volume under pressure, lenders are looking more closely at the cost of originating each loan, the efficiency of their operations, and where they can improve without relying on a market rebound
Three themes stood out this year: the cost of making a loan, the industry’s readiness for UAD 3.6, and AI moving from experimentation to governance. Each points to a broader question for lenders, AMCs, and valuation teams: how do you improve efficiency and manage risk when the market isn’t giving you much room for error?
MBA’s latest outlook points to a challenging year ahead. The 30-year mortgage rate reached its highest level since 2023 at 7.49% in early October and is expected to average 7.3% in the fourth quarter of 2026 and stay above 7% through 2027. Total lending is projected to fall about 5% in 2027, from $2.1 trillion to just under $2 trillion.
Two factors are keeping the market constrained:
With lending volume unlikely to provide relief, lenders and AMCs need to make every loan count.
All macroeconomic market data and visuals referenced in this article have been extracted from the Mortgage Bankers Association’s 2026 Annual Conference presentation.
The difference comes down to more than spending less. Roughly two-thirds of the performance gap was driven by higher revenue, with the remaining third tied to lower costs. This suggests that the strongest lenders are finding ways to generate more value from each loan while managing expenses.
For valuation teams, the takeaway is to look beyond individual costs and understand how appraisal workflows affect the broader lending process. Delays, revisions, and manual touchpoints can add friction across the loan lifecycle, making workflow performance an important part of the profitability equation.
MBA’s outlook points to a housing market where price growth is slowing, but homeowners still have substantial equity to draw on. Home prices are projected to grow by just 0.8% in 2026 and 0.5% in 2027, while homeowners hold an estimated $35.8 trillion in equity. That equity is creating continued opportunities for home equity lending, with approximately 1.8 million home equity loans and lines of credit worth $229 billion originated in 2025.
What stood out is the contrast between the amount of equity homeowners hold and the uneven conditions across local markets. Prices are already declining in states such as Washington, California, Colorado, and New Mexico, while national forecasts point to only modest growth. For lenders, this makes local market conditions increasingly important, particularly when evaluating properties for home equity loans and HELOCs. The value available to a borrower depends on the property and its market, not just the broader housing outlook.
For lenders and valuation partners, the opportunity is to match the valuation approach to the loan type and property risk. As home equity lending continues, accurate property data, appropriate valuation products, and the ability to respond to local market differences will become increasingly important.
One of the clearest takeaways from the UAD 3.6 discussions was the gap between software readiness and industry readiness. Platforms may be prepared for the new format, but many lenders, AMCs, and appraisers are still working through what the transition means for their day-to-day processes.
The conversations highlighted three areas where teams are still facing challenges:
The transition is as much about people and processes as technology. The panel’s advice to test individual components, rather than relying solely on end-to-end testing, was particularly relevant. Identifying gaps early gives teams more time to address issues before they affect live orders.
For lenders and AMCs, the priority is to train appraisers and reviewers, test workflows, and make sure operational procedures are ready alongside the software.
AI came up in nearly every conversation at MBA Annual, but the focus has shifted from what the technology can do to how it should be used and governed. New GSE requirements are placing greater emphasis on documentation, accountability, and oversight of third-party vendors.
Fannie Mae’s AI framework, which took effect on August 6, 2026, requires written AI policies, a designated owner, and at least annual reviews. It also requires controls on vendors and subcontractors, and prompt disclosure of AI use when asked. Meanwhile, an MBA, AARMR, and BCG survey identified the main barriers slowing adoption:
The survey also found that governance often weakens once a tool goes live. The numbers suggest that adoption is not simply a question of access to technology. Lenders also need confidence in how tools reach their results, how information is handled, and what controls apply when vendors use AI.
At MBA, CrossCheck drew interest as part of the ValueLink platform; as appraisal data becomes more structured through UAD 3.6, documented review rules can help teams apply checks consistently and understand the logic behind them.
For lenders evaluating AI-enabled tools, a few questions deserve particular attention:
The broader message is that AI capabilities alone are not enough. They need to sit within workflows that lenders can explain, oversee, and trust.
MBA Annual 2026 reinforced a practical message: with lending growth constrained, the industry is looking for progress it can control. Three priorities stood out: improve operational efficiency to manage costs and protect margins, prepare people and processes for UAD 3.6 instead of relying on software readiness alone and establish clear AI governance as technology becomes more embedded in valuation workflows.
For lenders and AMCs, the opportunity is to turn these priorities into concrete improvements across the valuation process.
Planning for UAD 3.6? Explore our UAD 3.6 Resource Kit for guidance on preparing your workflows.
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