If you watch professional cycling, you know that teams build their rosters around one of two objectives: winning a grand classification or accumulating stage wins.

In both scenarios—but especially the latter—teams contract "specialists"—riders who excel on specific courses: sprinters for flat finishes, rouleurs for breakaways, and climbers for those grueling mountain stages.

Personally, I can't help but cheer for the breakaway specialists. Their success rate is less than 1%, which means the few times a year they finish first, the emotions are next-level. Breakaway wins are some of the best storylines in sports—the hardscrabble result of pushing the pace when everyone else sits back.

And more often than not, that happens on what cyclists call a "false flat."

2025: A False Flat?

Over the past year, more lenders than not seemed to embrace a strategy of "wait and see"—assuming that, by 2025, some of their more distressed competitors would exit the market, economic data lines would deteriorate (positioning rates to fall), and that a new administration would swoop in with policies designed to either stimulate demand or roll back regulations.

But 2025 is here, and while the loan officer population is expected to shrink another 22% year-over-year, volume projections have also been revised downward from $2.3T to just $1.9T—an 18% reduction since the MBA's initial forecast in October.

Furthermore, inflation (while still above Fed targets) has effectively plateaued, and while Trump 2.0 is making waves, its universal tariff proposals could increase the average cost of U.S. homes and slow down new construction starts.

In other words, 2025 is shaping up to be a false flat. While there will be some reprieve from the grueling terrain lenders navigated last year, the road ahead is anything but flat—let alone downhill.

Which means the lenders who gain market share over the next 12 months will be the ones who embrace the mindset of the world's best breakaway specialists: push the pace while the competition sits back.

Not Flat, but Tailwinds Possible

While the terrain may still not be favorable, some possible tailwinds seem to be stirring. When they'll arrive, how long they'll last, and just how strong they'll be? Impossible to tell. But for those who get ahead of the pack and put themselves in open air, there could be some significant currents to take advantage of.

That said, here are the ten most likely tailwinds I see for lenders in 2025, from least impactful to most impactful.

No. 10: Permanent Extension of TCJA Tax Provisions

Second perhaps only to the border, cementing the Tax Cuts & Jobs Act (TCJA) is one of the highest priorities for Trump 2.0. And with the provisions set to expire on December 31 of this year, tax policy is likely Congress's first focus after confirming Trump's cabinet appointments.

If Republicans in Congress are simply looking to extend the TCJA as is, its passage is unlikely to drive any additional supply or demand.

If, however, Trump and his allies in Congress are open to a modified version of the legislation, there are some big potential wins for the industry.

No. 9: Reinstated or Expanded Housing-Related Tax Credits

While the Trump administration is likely not looking to amend its 2017 tax policy but rather to enshrine it into law permanently, two possible changes in particular have been floated: reinstating the first-time homebuyer tax credit and expanding the low-income housing tax credit (LIHTC).

Given the Trump campaign's lack of response to Harris's proposal to not only reinstate but expand the first-time homebuyer tax credit (which expired in 2010), it's doubtful a tax credit benefiting first-time buyers will find its way into the bill(s) put forward to cement the TCJA.

That said, interest in expanding the LIHTC, which could have a near-immediate impact on driving new housing developments, might find more fertile ground in a Trump 2.0 tax proposal—as could some alterations to the mortgage interest deduction (MID) and SALT deduction caps that have limited tax benefits for homeowners in highly taxed states.

It's worth noting that in 2024, the Tax Relief for American Families and Workers Act (TRAFWA)—which passed the House but stalled in the Senate—proposed increasing the amount of LIHTC grants available to states by 12.5% and lowering the minimum PAB-financed threshold to qualify for an LIHTC credit from 50% to 30%.

If Trump 2.0 and congressional Republicans are serious about addressing housing costs—especially on the supply side—revisiting TRAFWA or incorporating some of its provisions (specifically those related to LIHTC) could provide a major windfall for housing in 2025 and beyond.

No. 8: Reduced Capital Reserve Requirements for the GSEs

With Scott Bessent at the helm of Treasury and Bill Pulte heading up FHA, Trump 2.0 looks even more committed than Trump 1.0 to exiting the GSEs from conservatorship. While the likelihood of that goal taking precedence over extending the TCJA is minuscule, steps to lay the groundwork—like reducing the FHFA's 2020 capital rule—aren't out of the realm of possibility for 2025.

Doing so could allow the GSEs to offer more competitive pricing, granting Pulte and the team at FHFA more flexibility to streamline LLPAs and G-fees, potentially saving borrowers real money this year.

No. 7: FHFA Streamlining LLPAs and G-Fees

While any reduction in G-fees would be a welcome reprieve in today's low-volume, low-margin environment, a reduction in LLPAs could play an especially important role in helping lenders serve borrowers with limited capital and moderate credit scores.

And that's especially true if we see an expansion of the credit box, possibly through accelerated adoption of trended data—which could qualify as many as 4.9 million more borrowers, according to Rikard Bandebo at VantageScore.

No. 6: Housing Grants Tied to Local Zoning and Permit Deregulation

As a builder himself (albeit commercial, not residential), Trump has repeatedly lamented slow and expensive permitting processes that hinder development.

While much of that red tape will need to be reformed at the state and local level, federal grants could be conditioned upon:

• Streamlining permitting processes
• Rolling back regulations
• Loosening zoning restrictions to allow for high-density building

While the effects of conditioned grants would lag behind more immediate measures—like streamlining fees through FHFA—the benefits are tangible and could help address the housing shortage that has contributed to pushing the median home-buying age to 38 years old.

No. 5: Title Insurance Reforms (Expanded AOLs, Hybrid Offerings, Portability, etc.)

At 50-100 basis points, streamlining the cost of title insurance could significantly impact the average cost to close.

While the U.S.'s fragmented property records infrastructure makes sweeping cost reductions difficult, Trump 2.0 could take a few steps to offer greater choice and immediate savings for borrowers:

• Require lenders to offer Attorney Opinion Letters (AOLs) in addition to traditional title insurance
• Update FHA, VA, and USDA loan programs to accept AOLs
• Allow homeowners to refinance within a set period without a new title search
• Permit hybrid models combining AOLs with limited insurance policies

While some advocate for a federal clearinghouse to reduce the cost of title searches or for capping title insurance premiums as a percentage of the loan amount, changes of that magnitude are unlikely to gain traction in the near future.

No. 4: Reduced MIP Burdens for FHA Borrowers

2024 marked the ninth consecutive year that FHA's Mutual Mortgage Insurance (MMI) Fund exceeded its statutory requirement. With a 0.9% year-over-year increase, the fund now sits at more than five times its 2% statutory requirement.

There's a strong case to be made—and according to Bob Broeksmit, the MBA is making it—to HUD Secretary Scott Turner for reducing MIP fees or making them cancellable at 80% LTV.

As Broeksmit put it at the MBA's IMB Conference:

"The President doesn't control the price of eggs... but with the stroke of a pen, he can help reduce the cost of homeownership."

Since the President can direct HUD to adjust MIP rates and cancellation policies without congressional involvement, streamlining the cost of FHA loans under Trump 2.0 is one of the most likely tailwinds for lenders this year.

No. 3: Expanded Borrower Access via Trended Credit Data

One of the defining dynamics of 2025's "false flat" environment has been the increase in credit reporting costs.

Following FICO's announcement that it would raise its wholesale royalty fee for mortgage-related credit scores from $3.50 to $4.95—a 41% increase—lenders are forecasting a 20% rise in overall credit reporting costs this year.

That increase is compounded by the government’s tri-merge requirements, which MBA President Bob Broeksmit addressed candidly at the IMB Conference, stating:

“The credit scoring entities at the credit bureaus are taking advantage of the market position the government bestowed on them by requiring a tri-merge credit report.”

So, where’s the tailwind?

Given Trump 2.0’s focus on privatization, it’s possible the new FHFA Director (likely Bill Pulte) accelerates the adoption of trended credit data models, which could expand the credit box for potential borrowers.

According to Rikard Bandebo, Chief Strategy Officer at VantageScore, as many as 4.9 million more borrowers could qualify for a mortgage under the new model.

If true, injecting millions of potential homebuyers into the market would be a huge win for lenders—especially given 2025’s downward-trending volume projections.

No. 2: Fatigued Buyers Deciding Waiting Isn’t Worth It

Much like lenders, consumers relied on a "wait-and-see" strategy in 2024.

Which begs the question: with another year ticked by, how many buyers at critical life stages will finally get fed up with waiting and take action?

That could mean:

• Downsizing to prepare for retirement
• Choosing to buy vs. rent
• Dropping listing prices to attract buyers and finally make a long-planned move

While propensity models are improving, they rely on siloed datasets, making it difficult to quantify consumer sentiment toward buying and selling.

The year began with higher-than-expected activity, but only time will tell whether Americans are ready to move forward—potentially injecting more velocity and volume into the market than projected.

No. 1: Faster-Than-Expected Rate Cuts

It goes without saying that the most impactful (but least likely) tailwind in 2025 would be faster-than-expected Fed rate cuts.

At the IMB Conference, MBA Chief Economist Mike Fratantoni forecasted just one rate cut—presumably mid-year—but even he seemed ambivalent about whether it would actually happen.

As we saw in Q3 of last year, the market has become increasingly efficient at pricing in cuts ahead of Fed actions—muting, if not eliminating, the perceivable impact of any reductions.

That said, historically, when rates drop, consumer activity increases.

Even if lower rates simply generate more applications without improving DTI or LTV issues, more applications ultimately mean more loans—which, second to thicker margins, is among the industry's most pressing needs in 2025.

Waiting on rate cuts proved disastrous in 2024.

Despite the Fed’s three cuts spanning September to December (a 100 bps total reduction), the average 30-year fixed-rate mortgage climbed from 6.09% in September to 7.04% in January—the highest level since May 2024.

Lenders cannot afford to build 2025 strategies around Fed actions.

Instead, they should focus on purchase loans and debt-restructure refinances, while staying ready to capitalize on small refi boomlets throughout the year.

What Didn’t Make the List

Some might feel there are glaring omissions from this list—first among them likely being the absence of AI innovations or more widespread adoption of AI-powered tools.

To be clear, AI is already having—and will continue to have—a major impact on the industry.

But for now, that impact seems largely confined to the few players with the capital and data to build proprietary solutions.

While more lenders are likely to deploy voice AI agents in 2025, the impact feels marginal given low consumer activity.

As conditions improve and borrower engagement increases, AI-driven tools—voice agents, AI chatbots, and AI-generated content—will play a larger role in converting more borrowers and driving higher volume.

I'm bullish on emergent tech, but I don’t see 2025 as the year AI revolutionizes mortgage.

Instead, deregulation, cost savings, increased competition, and lower rates remain the biggest potential tailwinds for the U.S. housing market in 2025.