Zacks Industry Outlook Highlights Federal Agricultural Mortgage, Lending Tree And Finance Of America
For Immediate Release
Chicago, IL – July 1, 2026 – Today, Zacks Equity Research discusses Federal Agricultural Mortgage AGM, Lending Tree, Inc. TREE and Finance of America Companies FOA.
Industry: Mortgage Services
The Zacks Mortgage & Related Services industry continues to face headwinds due to persistent volatility in mortgage rates. With the Federal Reserve pausing rate cuts and signaling a potential rate hike amid rising inflation, mortgage rates are expected to remain elevated in the near term. This is likely to weigh on home purchase applications while refinancing activity remains muted, hurting industry players' top-line growth.
Amid the ongoing concerns, diversified business operations and encouraging scenarios for the servicing segment will help industry players like Federal Agricultural Mortgage, Lending Tree, Inc. and Finance of America Companies.
Industry Description
The Zacks Mortgage & Related Services industry comprises providers of mortgage-related loans, refinancing and other loan-servicing facilities. Numerous banks have been retreating from the mortgage business due to higher compliance and capital requirements. This allowed non-banks to increase their capacity to gain market share in the mortgage loans business, which accounts for the largest class of U.S. consumer debt.
Players in the industry are dependent on the interest rates determined by the Federal Reserve, as prevailing rates influence customers' decisions to apply for mortgages. The companies also generate investment income from several financial assets, such as residential or commercial mortgage-backed securities and asset-backed securities. The firms make equity investments in mortgage-related entities, among others.
3 Mortgage & Related Services Industry Trends to Watch
Relatively High Mortgage Rates Keep Homebuyers on the Sidelines: After lowering interest rates by 175 basis points since 2024, the Federal Reserve has ket interest rates steady so far in 2026 and adopted a more hawkish stance given high inflation, exacerbated by the recent oil price shock stemming from geopolitical tensions in the Middle East. As such, in recent weeks, the 30-year fixed mortgage rates have risen to nearly 6.5% from the low-6% range seen at the start of the year.
Given higher interest rates, loan demand is expected to be subdued. This, coupled with affordability constraints and economic uncertainty, have pushed potential homebuyers to the sidelines.
Hence, mortgage origination and refinancing activity are not witnessing significant growth. This will lead to increases in operational and financial challenges for Mortgage & Related Services industry players and decrease the gain on sale margin and investment activity. Thus, this is expected to hurt industry players' top-line growth.
Competition Picks Up: Per an MBA forecast, U.S. single-family mortgage debt outstanding is expected to see an increasing trend in the upcoming years. This is anticipated to be primarily driven by house price appreciation. While this typically results in growth of the single-family mortgage portfolio for industry players, the competitive landscape of the mortgage services industry is likely to be a deterrent.
Numerous companies have hinted at significant declines in gain-on-sale margins across the space. With tighter margins, many originators may struggle to remain profitable in the upcoming period.
Servicing Segment to Offer Support: With significant declines in gain-on-sale margins and subdued loan origination volume, industry players are likely to increase their reliance on the service segment for profitability. In a relatively high-rate environment, the servicing segment offers a natural operational hedge to the origination business. Slow prepayment speed is expected to create tailwinds related to mortgage service rights (MSR).
Hence, MSR investments are poised to deliver significant value appreciation and offer attractive unleveraged yields. With U.S. single-family mortgage debt outstanding projected to reach $15.2 trillion by 2026-end, there are massive growth opportunities for the industry players in the servicing portfolios.
Zacks Industry Rank Reflects Bleak Prospects
The Zacks Mortgage & Related Services industry, housed within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #169, which places it in the bottom 31% of more than 245 Zacks industries.
The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates drab near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Looking at the aggregate earnings estimate revisions, it appears that analysts are losing confidence in this group's earnings growth potential. The industry's earnings estimates for 2026 have been revised 20.2% lower over the past year.
Before we present a couple of stocks you may want to consider for your portfolio, let us look at the industry's recent stock-market performance and valuation picture.
Industry Underperforms Sector & S&P 500
The Zacks Mortgage & Related Services industry has underperformed the broader Zacks Finance sector and the S&P 500 composite in the past year.
The industry has declined 16.9% in this period against the broader sector's growth of 11% and the S&P 500 composite's appreciation of 21.9%.
Industry's Current Valuation
On the basis of the price-to-book ratio (P/B), which is commonly used for valuing mortgage and related services companies, the industry currently trades at 1.9X compared with the S&P 500's 7.93X. Over the last five years, the industry has traded as high as 7.18X, as low as 1.70X and at the median of 3.93X.
As finance stocks typically have a lower P/B ratio, comparing mortgage and related services companies with the S&P 500 may not make sense to many investors. However, comparing the group's P/B ratio with that of its broader sector ensures that the group is trading at a premium. The Zacks Finance sector's trailing 12-month P/B of 4.54X for the same period is below the Zacks Mortgage & Related Services industry's ratio.
3 Mortgage & Related Services Stocks to Watch -- AGM, TREE & FOA
Federal Agricultural Mortgage, also known as Farmer Mac, is a federally chartered corporation that combines private capital and public sponsorship to create a secondary market for various loans made to rural borrowers.
The company's strategic diversification across Farm & Ranch, Corporate AgFinance and Infrastructure Finance, including key growth areas like renewable energy and broadband, positions it to navigate market volatility while capturing long-term opportunities in rural America. This multi-segment approach balances risks and growth potential.
Coupled with a disciplined fund transfer pricing framework that aligns interest expenses with funding and hedging strategies, AGM is well-equipped to optimize financial performance and maintain stability through economic cycles.
In the first quarter of 2026, the company delivered double-digit year-over-year growth in business volume, revenues and core earnings, as we approached $35 billion in total outstanding business volume.
Sustained customer demand, while maintaining disciplined underwriting and risk management, will keep supporting AGM's financials.
The Zacks Consensus Estimate for Federal Agricultural Mortgage's 2026 earnings has been unchanged over the past week. This Zacks Rank #3 (Hold) company's earnings for 2026 are expected to rise 18.6% year over year.
It has a market capitalization of $2.11 billion.
LendingTree, which is the parent company of LendingTree, LLC, is headquartered in Charlotte, NC, and has been operating solely in the United States since July 1998.
LendingTree is focusing on improving purchase conversion rates while assisting in meeting its customers' demands for home equity loans.
The company's market-leading position and flexible business model provide further diversified solutions for a wider array of lenders, enabling it to navigate through volatile macroeconomic situations.
TREE is committed to boosting revenues by diversifying its non-mortgage product offerings, particularly in the Consumer segment. Over the past years, the company has increased its services, such as credit cards and widened loan offerings to personal, auto, small business and student loans.
Management's 2026 outlook assumes continued strength in Insurance with ongoing carrier competition and improving marketing efficiency as key drivers through the year.
The Zacks Consensus Estimate for TREE's 2026 earnings has been unchanged over the past week. This Zacks Rank #2 (Buy) company's earnings for 2026 are expected to surge 71% year over year.
It has a market capitalization of $567.6 million.
Finance of America: It is a diversified, vertically integrated consumer lending platform. FOA's product offerings include mortgages, reverse mortgages and loans to residential real estate investors distributed across retail, third-party network and digital channels.
Finance of America's growth is being supported by a combination of market leadership, product innovation, demographic tailwinds and improving execution.
The company is the leading reverse mortgage platform with roughly 30% market share, giving it a strong competitive advantage in a market that remains underpenetrated.
The company is also well positioned to benefit from the $14.6 trillion senior home equity opportunity, supported by aging demographics, rising senior home equity and the need among retirees to access liquidity without selling their homes.
Operationally, FOA is showing signs of an inflection, with the first-quarter 2026 submission volume increasing 20% year over year to $918 million, helped by better funnel conversion, increased throughput and strong retail channel momentum.
The Zacks Consensus Estimate for Finance of America's 2026 earnings has been unchanged over the past week. This Zacks Rank #2 company's earnings for 2026 are expected to surge 56.3% year over year. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It has a market capitalization of $215.3 million.
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