Wednesday, August 19, 2009

Encouraging News from the Mortgage Market

The Federal Reserve just released the results of its second quarter survey of senior loan officers. The Fed uses the survey to assess the supply of, and demand for, loans to businesses and households.

During the second quarter of 2009, domestic banks continued to tighten lending standards for prime residential real estate loans. That continues a trend that's been going on for the past three years. The good news is that for the second consecutive quarter, banks reported increased demand from prime borrowers for residential mortgages. The increase in demand is probably indicative of the passing of the financial crisis, rather than the beginning of a sustainable trend. Nonetheless, it's another sign that the housing market may finally be stabilizing.

No comments: