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The MReport Webcast: Tuesday 2/9/2016

The housing market is six years into the current recovery, and while banks are generally in good health, worrisome signs of credit risk are still prevalent among these institutions. The Office of the Comptroller of the Currency 2015 Annual Report found that banks are performing well, but maintaining the influx of growth is becoming challenging.

The report showed that banks were generally profitable in 2015 and experienced steady loan growth and relatively few problem assets. System-wide profitability reached 10 percent in 2015, up from 9 point 9 percent in 2014, but still well below pre-crisis levels. Both net interest income and noninterest income increased during the first half of 2015 among banks, while net income rose 3 billion dollars year-over-year. Thomas J. Curry, Comptroller of the Currency, noted that some banks are targeting less creditworthy consumers and easing their lending standards to keep up with growing competition.

Fannie Mae’s Home Purchase Sentiment Index showed that consumers are being squeezed out of the housing market due to low income growth. According to Fannie Mae, the HPSI decreased 1 point 7 points to 81 point 5 in January and is down 1 point 3 points year-over-year. The net share of survey respondents who reported significantly higher household income compared to a year ago fell 3 percentage points to 12 percent. Meanwhile, those that indicated that now is good time to buy a home also fell 4 percentage points to 31 percent. Only 61 percent said that it is a good time to buy a home, equal to the all-time survey low.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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