Biggest Impediment to Mortgage Growth? Shortage of New Homes.

WASHINGTON — It is well established that mortgage lenders will need to pivot to new areas of growth as rising rates put an end to the refinancing boom. But the interest rate environment may not be their biggest hurdle.

Lenders have so far been able to navigate around the persistent scarcity in the U.S. housing supply due partly to rock-bottom rates. Yet many worry the low inventory could soon put a strain on the industry and force financial institutions to compete even more intensely for new mortgage business.