I’m always curious to see what insight our quarterly survey of US bank risk professionals will yield. Here’s a finding that jumped out at me from this quarter’s survey: respondents think the housing recovery is for real.
By now, we’ve all seen media reports of rising home prices in many areas. In our survey, 71% of respondents feel these prices are “rising at a sustainable pace” within the context of mortgage lending risk.
In addition, 39% of respondents expect mortgage delinquencies to decrease over the next six months. Another 45% expect delinquencies to remain flat and only 16% expect an increase. These are the most optimistic figures we’ve seen in the three years we’ve been conducting the survey.
We also found that a majority (59%) expect the supply of credit for residential mortgages to meet demand over the next six months, and a slightly larger majority (60%) expect the supply of credit for mortgage refinancing to meet demand. You can see the full survey report here.Mortgage lenders have been understandably guarded over the past five years. The uptick in their sentiment is welcome news. I wouldn’t be surprised to see lenders cautiously expanding mortgage and home equity lending in the months ahead.