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With average 30-year mortgage rates reaching 7.79 percent in October – the highest level since 2000 – lenders were forced to get creative financing homes, leading to high customer satisfaction in 2023.

According to a J.D. Power mortgage origination survey, overall satisfaction with mortgage lenders climbed to 730 this year from 716 last year despite the astronomic rise in interest rates.

Customers looked beyond interest rates as more than two-thirds of the customers said they preferred their lenders’ personalized service and ability to help navigate the loan market. In contrast, one-third selected the lenders with the lowest interest rate offers.

But the survey revealed that the improved service could be hard to maintain for most lenders as they look to have more cost-cutting measures and market conditions are unlikely to improve in the foreseeable future.

“Two years ago, the mortgage market was an ultra-low-rate goldmine in which lenders were making big profits and the primary challenge was keeping up with demand,” Craig Martin, executive managing director and global head of wealth and lending intelligence at J.D. Power, said in a statement. “It’s the opposite today with high rates and a lack of affordable homes leading to a limited number of eligible borrowers. To effectively compete in the future, lenders need to set themselves apart by focusing on addressing customers’ unique challenges and meeting their needs rather than selling a product.”

Many lenders found that engaging with mortgage borrowers earlier in their shopping journey leads to retaining the customers throughout the process, as 38 percent of mortgage customers said they started working with a lender when they first thought about buying a home.

Service is valued more in a high-interest rate environment as the borrowers wanting for their loan officers to be more involved also increased to 40 percent from just 29 percent a year ago.

Despite high satisfaction numbers, the J.D. Power said it is coming more from repeat customers, and that first-time homebuyers are struggling with the current mortgage loan market. Overall satisfaction among first-time homebuyers was down due to the complex lending environment and considerable challenges customers are facing.

“The value equation for mortgage originators has shifted from instant approvals and lightning-fast processing to helpful advice and creative problem solving,” Bruce Gehrke, senior director of wealth and lending intelligence at J.D. Power, said in a statement. “Lenders that manage this transition will have a great opportunity to build customer goodwill and limit defection by showing customers they understand their unique needs and the challenges of the current market.”

Fairway Independent Mortgage Corp. ranked highest in mortgage origination satisfaction, with a score of 776, while Rocket Mortgage ranks second with a score of 759 and Citibank ranked third at 756.

JD Power’s U.S. Mortgage Origination Satisfaction Study – done from November 2022 to August 2023 – surveyed 9,191 customers who originated a new mortgage or refinanced within the past 12 months.