The Zacks Mortgage & Related Services industry is facing significant challenges due to persistent volatility in mortgage rates. With the Federal Reserve maintaining steady rates in 2026 and signaling potential hikes amid rising inflation, the 30-year fixed mortgage rates have climbed to nearly 6.5%, down from the low-6% range at the year’s start. This environment is expected to suppress home purchase applications and refinancing activity, leading to decreased top-line growth for industry players such as Federal Agricultural Mortgage (AGM), LendingTree (TREE), and Finance of America (FOA).
The industry’s outlook remains bleak, as evidenced by a Zacks Industry Rank of #169, placing it in the bottom 31% of over 245 industries. Analysts have revised earnings estimates for this sector downwards by 20.2% for 2026 over the past year. Despite these challenges, the servicing segment may offer resilience, with significant growth projections for U.S. single-family mortgage debt expected to reach $15.2 trillion by 2026, allowing companies to leverage investments in mortgage service rights for profitability.
In the past year, the Zacks Mortgage & Related Services industry has underperformed compared to the broader Finance sector, declining 16.9% against an 11% growth in Finance and a 21.9% increase in the S&P 500. Currently, the industry trades at a price-to-book ratio of 1.9X, significantly lower than the S&P 500’s 7.93X.
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