Growing up in a real estate family and now being an MLO (Mortgage Loan Originator) taught me how vital the relationship between the two industries must be to guarantee a successful transaction for all involved. Along with being a key component of the American economy, everyone involved wins when these two economic giants co-exist harmoniously.

The foundation of homeownership in America is built upon the relationship between two industries, mortgage and real estate.

The mortgage industry provides the financial essentials for consumers to realize their dream of owning a home. At the same time, real estate professionals guide consumers to find the right home for the right price in the borrowers’ desired location.

Countless loan products are available to consumers to meet all loan scenarios and financial diversities a potential borrower may qualify for to help get them into a home. These loan products include Fixed-Rate Mortgages, Adjustable-Rate Mortgages, Government-Backed Mortgages, and many more.

The Mortgage Industry and Government Work Hand in Hand

Mortgage and Real Estate Intertwined

How Are The Mortgage and Real Estate Industries Interconnected?

The mortgage industry and the federal government strive to make homeownership accessible to a sizable percentage of the U.S. population. This drives demand in the real estate market, contributing to community development and ensuring long-term economic growth.

The U.S. housing market can experience fluctuations due to the decisions made within these two industries. Lower interest rates incentivize potential homebuyers to enter the housing market, which increases demand for homes. This can lead to increased pricing in existing homes and stimulate homebuilders to increase their production of new homes.

Even affordable housing options can benefit. This increase in demand also creates an economic stimulus in other industries like plumbers, electricians, home improvement specialists, and many more.

As we experienced recently, the increase in interest rates can slow or deter potential homebuyers from entering the home-buying market. It may force homebuilders to slow their home-building production dramatically.

Pricing Influences The Real Estate Market

Although, we did see an increase in home value in economically strong regions of the U.S. due to a housing shortage. It made little improvements in the U.S. economy, as it priced homebuyers out of the real estate market and had a chilling effect on mortgage refinances due to homeowners unwilling to Refinance to a higher rate.

Another side-effect of this increase in Interest Rates was several U.S. regions experienced a substantial property tax increase year-over-year. This has been a devastating circumstance for American families and has impacted their wallets.

The consensual relationship between the two industries has also stimulated regulators (Government & Private Entities) to act when market stability and consumers are severely affected when poor decisions can and did create a fiscal crisis in 2008. This crisis forced the U.S. Congress to pass and enact the Dodd-Frank Wall Street Reform and Consumer Protection Act.

These reforms were designed to protect consumers from predatory lending practices and institute rigorous underwriting standards and transparency for the U.S. consumer.

Increased Regulations Have Had Consequences

The responsibilities of real estate professionals and MLOs (Mortgage Loan Originators) dramatically increased with severe consequences if the new comprehensive guidelines were not understood, followed, and adhered to by industry professionals.

This increased the responsibility of mortgage and real estate professionals to elevate their understanding of all mortgage and real estate practices to protect consumers throughout their mortgage and real estate transactions.

Technology Helps

Technological advances have brought the mortgage and real estate industries closer, along with this increase in consumer protection and financial understanding. Digital platforms have brought warp-speed-like timelines, which have enhanced the consumer experience.

This has also increased the expectations from the consumer of real estate agents and loan officers throughout the real estate and mortgage transaction.

The future of the mortgage and real estate industries are forever linked and driven by a shared commitment to promoting homeownership and economic growth.

As our global economy evolves, the impact of digital transformation, changing consumer preferences, and demographic shifts will undoubtedly shape how these two industries interact.

The harmonious relationship between the mortgage and real estate sectors will continue to be a linchpin in navigating these changes and ensuring that housing remains an accessible and essential aspect of our American society.

Final Thoughts

In conclusion, the relationship between the mortgage and real estate industries is interdependence and collaboration. Their shared economic interest shapes the landscape of homeownership, drives economic trends, fuels innovation, and informs policy decisions.

The aspiration of owning a home is realized through the cooperation of real estate professionals assisting individuals in finding their dream homes and the mortgage industry providing the financial means to make those dreams a reality.

Dustin Dumestre


About the author: Dustin Dumestre is an experienced Multi-State licensed Loan Originator with NEXA Mortgage on the Gustan Cho Associates team, versed in all residential mortgage loan products available to the public, including… FHA/Conventional/VA/USDA – Purchase, Refinance, 2nd Mortgage, DSCR (Investor) & many more.