Credit standards at home lenders have eased recently, with larger lenders reporting more loosening than smaller ones. While demand has recently improved, fewer lenders are optimistic that demand will increase in the near future.
The share of executives who say it is difficult to get a mortgage stands at 81 percent. This share has eased somewhat from the 85 percent who felt this way one year earlier. At the same time, the share who said it would be easy to get a home loan has inched up to 18 percent from 15 percent.
Credit standards on GSE and non-GSE loans over the past three months have eased at more than a fifth of
institutions versus around 12 percent in the second-quarter survey.
Those findings were discussed in the Mortgage Lender Sentiment Survey Q3 2015 Summary Report from Fannie Mae. Senior executives like chief executives and chief financial officers at Fannie Mae-approved lenders participated in the survey.
The improvement on just GSE loans was greater, however, at larger institutions than at their mid-sized counterparts, while a diminishing share of smaller institutions saw looser standards than in the second quarter.
There was little change, though, among the 13 percent of lenders of all sizes who say standards have eased on government mortgages.
For all three types of loans, between
seven and 16 percent expect continued easing over the next three months — hardly different than three months ago.
Although the share of respondents who said demand for GSE purchase financing has risen over the past three months dipped to 73 percent from 77 percent in the second quarter, it has risen substantially from just 53 percent in the third-quarter 2014.
On non-GSE loans, purchase demand rose at 57 percent of institutions versus nearly two-thirds who saw increased demand a year previous.
Demand increased at 63 percent of government lenders, much higher than 43 percent in the year-earlier period.
On just GSE and government purchase financing, the share reporting decreased demand has fallen
substantially from a year earlier to 10 percent or less.
But fewer lenders are optimistic on all three loan types about the next three months — with less than 38 percent predicting an increase in purchase lending demand compared to at least 54 percent who expected stronger demand in the second quarter.
The share of all three groups that predicted lower demand jumped from five percent to at least 17 percent.
Sixty percent of lenders expect home prices to rise over the next year, less than the 70 percent who thought prices would increase in the last survey but up significantly from the less than half who indicated such in the year-earlier survey.
