The mortgage industry saw a steady rise in profitability during the first quarter of 2023. Despite the glimmer of hope, the overall picture of the industry remained bleak. Only 32% of companies across both the production and servicing business lines, enjoyed a positive net profit in the first quarter, as opposed to 25% during the fourth quarter of 2022.

The increase in profitability was mainly driven by mortgage rates, which continued to sink to historic lows throughout the quarter. As a result, demand for mortgages rose considerably and many production companies saw a sharp increase in origination volume and total revenue. Additionally, the improved performance of the housing market led to a decline in delinquencies and defaults, which improved margins for servicing companies.

Main Elements of Text:
• Q1 2023 profitability: 32%, up from 25% in Q4 2022
• Mortgage rates continued to sink: Driven demand/ higher origination volume for production companies
• Improved performance of housing market: Reduced delinquencies/ defaults, improved margins for servicing companies

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