Americans' demand for mortgages dropped in the past three months, and it's only expected to fall further heading into 2015, according to responses in a fourth-quarter survey. In a poll of senior mortgage officers conducted in November, Fannie Mae found consumer demand was down across all categories of home purchase loans, with only 42 percent of respondents reporting increases in demand for GSE-eligible loans, 43 percent for non-GSE loans, and 29 percent for government loans. The responses echo findings in the Federal Reserve's most recent Senior Loan Officer Opinion Survey, which showed demand fell for all mortgage types in the three months ending in October.
Looking to the early months of 2015, an increasing number of lenders anticipate demand will continue falling off, with nearly a quarter of responses in each category calling for declines. Doug Duncan, senior vice president and chief economist at Fannie Mae, said the survey results support the company’s forecast of modest housing expansion going into the new year.
The Federal Reserve announced Wednesday that it intends to take a slow approach to raising interest rates in the coming year, even as the economy continues to strengthen. In a policy statement released following this year’s last meeting of the Federal Open Market Committee, the central bank said it plans to be patient as it starts to normalize its stance on monetary policy, though most officials surveyed expect hikes will begin in 2015. In a recent survey conducted by the Wall Street Journal, the majority of economists predicted the first increase will come in June, with other forecasts split between early spring and late summer.