I started in mortgages in 2007 for a brokerage office in Salem, Oregon. Within my first year and a half, I was one of the top-producing loan officers in the office. At the same time, the world around me was coming apart. I didn’t realize at the time that the industry I had just joined was starting to exhale.
The mid-2000s boom was over, companies were shrinking, and loan officers who had spent years building businesses were leaving the industry cold turkey. Every week seemed to bring another round of layoffs, closures, or panic (implode-o-meter anyone?).
I remember thinking, like a lot of people did back then, that maybe the mortgage business would never come back. Thankfully, I had a boss who kept me grounded. His advice was simple: focus on the fundamentals. Stick to the 30-year conventional. Learn FHA. Learn VA. Ignore the noise. Do not chase every new product that suddenly shows up when the market gets weird. That advice stuck with me because he was right. When the market gets unstable, the fundamentals matter more than ever.
I share that because I know what it feels like to wonder whether there is still a place for you in this business. At one point, I had to leave the mortgage industry entirely just to make sure I could pay my bills. That is part of the reality of this business.
Mortgage is cyclical. It always has been. This industry breathes. It inhales and exhales.
When it inhales, everything feels easy. Rates cooperate. Margins are stronger. Recruiting is aggressive. New branches open. Everybody wants in.
But when it exhales, the belt tightens. Margins get squeezed. Production slows. Companies cut expenses. Leaders get more cautious. Loan officers start wondering how much longer they can hang on.
And eventually, after holding that breath for long enough, we all start asking the same question: When does the next inhale begin? I think we may finally be getting close.
As we prepare our 2026 continuing education content, we spend a lot of time reviewing licensing data and NMLS trends. The latest public NMLS report from the third quarter of 2025 shows something that caught my attention.
The total number of nationally licensed individuals is still down. That part is not surprising. What is surprising is that state-specific licensing activity is increasing.
In other words, there may be fewer people in the business overall, but the people who are still here are adding states to their purview.
Nobody spends more money (or time) on licensing, renewals, continuing education, compliance, and state expansion unless they believe there is opportunity on the other side of it. The people who survived the boom of 2021 and the downturn that followed are not hanging around by accident. They made deliberate choices that equipped them to expand and reach into new markets. The folks who make it through this exhale are taking similar swings. They are following referral network, looking at population shifts, affordability, and broker opportunities in neighboring states.
They are making investments because they believe those investments will pay off.
It is not happening evenly across all states. Some licensing categories in California, Texas, New York, and Hawaii have declined. But even in California and Texas, some state-specific license categories are growing. To me, that does not signal retreat, rather, originators are becoming more selective. They are not licensing in every possible state just because they can. They are licensing where they think there will be return on investment. That is what smart businesses do near the bottom of a cycle.
HousingWire reported in early 2026 that the broker channel was gaining market share while retail lender market share was shrinking (through RETR data). I think there is probably truth in that. But more than anything, I think what we are really seeing is flexibility; the people who survived the last few years are adapting.
Originators are adjusting their margins, re-evaluating their channels, and strategically expanding into new states. And while that may seem like the obvious play during an exhale, those are the business practices that set shops up for massive growth when the mortgage industry finally takes a breath again.
And if I could challenge mortgage executives to focus on one thing right now, it would be this: invest in your people, not just in recruiting, not just in compensation, but invest in culture, invest in training, and invest in leadership.
I know plenty of originators who are being recruited right now with huge signing bonuses and promises of bigger splits. But the companies that win in the long run are rarely the ones throwing around the biggest checks. They are the ones where people feel valued and supported. They are the ones where leaders communicate with clear vision and values. They are the ones where training is treated as critical infrastructure. When people feel set up for success and valued, they stay. Even when the market gets hard and someone waves a signing bonus at them.
I do think we are close to the bottom of the exhale. So double down on the fundamentals, invest in your team, and the next inhale will be wind in your sails.
Nathan Knottingham is the co-founder of WestPort.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners. To contact the editor responsible for this piece: zeb@hwmedia.com.
