Rates Hurt Spring Purchase Financing Outlook

Thirty-five percent of senior executives at U.S. mortgages bankers think it would be easy for consumers to get a home loan as of the first quarter.

That turned out to be the biggest share of executives since at least the first-quarter 2014, when the share
who considered it easy was just 15 percent.

Fannie Mae reported the findings in its Mortgage Lender Sentiment Survey. Respondents included 199 senior executives such as chief executive officers and chief financial officers from 177 of Fannie’s lending institution customers.

Over the past three months, executives at 40 percent said demand for government-sponsored enterprise purchase-money mortgages
was up, while 30 percent noted a decline. The net share of 10 percent sank from 20 percent in the first quarter of last year.

On non-GSE eligible mortgages, the net share slipped to 15 percent from 18 percent a year earlier. The net share on government loans diminished to only 1 percent from 6 percent.

The net share of lenders who see demand rising over the next three months was between 43 percent
and half. The net share declined from between 52 percent and two-thirds in the year-prior period.

The three-month outlook was most impacted by unfavorable mortgage rates, with around three-quarters citing this factor.

Demand for refinances has fallen at nearly two-thirds of all lenders, while it was up at less than 15 percent — putting the net at around a negative 52 percent.

The net share who expect refinance demand to rise over the next three months was between a negative third and a negative 40 percent.

On GSE mortgages, the net share who saw credit standards ease over the past three months was 11 percent. It was 4 percent on non-GSE loans and 9 percent on government mortgages.