Tag Archives: Credit Availability

According to figures released by the Census Bureau Tuesday, homeownership dropped last quarter to a rate of 64.8 percent, 0.4 percentage points lower than Q4 2013 and the lowest rate since the third quarter of 1995. Quarter-to-quarter, homeownership was down in all regions except the West, though at 59.4 percent, it remains lower in that region than in any other.

While strict lending standards may be precluding some from the housing market, one economist insists banks want to lend. It is lackluster employment and slow household formation among Millennials that is hindering the market now, according to Maury Harris, managing director and chief U.S. economist at UBS during a discussion hosted by the National Association of Home Builders (NAHB). “Banks have over $2 trillion of excess reserves,” Harris said. “Banks would like to put that money to work and increase lending, which would help the economy.”

Average down payments for mortgages are on the decline, lending a little bit of relief for affordability-challenged homebuyers around the country. According to a report released this week by LendingTree, down payment percentages for 30-year fixed-rate purchase loans fell in the first quarter to an average of 15.78 percent, down from just higher than 16 percent in the last quarter of 2013.

According to survey results released Tuesday by independent home lender loanDepot, 56 percent of Americans who don’t currently own a home but would like to purchase in the near future say they’re not pursuing it right now “because they fear they won’t qualify for a loan.” Among current homeowners who wish to re-enter the market, 30 percent hold the same fear.

The latest Survey of Consumer Expectations from the Federal Reserve Bank of New York shows home price change expectations have declined slightly, falling to a projected 3.8 percent for the year ahead—the lowest level seen since October last year. The Fed found that the pattern did not hold in the West, where home prices are expected to continue at an even stronger pace.

According to a report put out Wednesday by University of Minnesota’s Institute on Metropolitan Opportunity (IMO), Twin Cities lenders have been treating minority mortgage applicants unequally for 10 years—first by originating an inordinate number of subprime loans to minority borrowers before the crash and then by disproportionately limiting credit access to those same communities.

The Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI) increased 0.44 percent last month to 114.0, the group reported Tuesday, indicating a loosening of credit. “Consistent with past months, many lenders and investors are providing borrowers seeking higher loan amounts with a broader range of financing options by introducing new jumbo loan programs,” explained MBA chief economist Mike Fratantoni.

Tight credit conditions have pushed as many as 1.22 million loans out of the market per year over the last few years, researchers at the Urban Institute (UI) assert in a new commentary. Admitting that their calculation method “likely ... [overstates] the impact of tighter credit,” they also calculated a scaled lower bound estimate of 273,000 “missing” first-lien purchase loans—though they maintain the "true" number is likely on the higher end.

In two reports issued separately Monday, Wells Fargo's Economics Group explores two promising trends that both indicate a positive climate for economic growth. The first report follows FDIC loan performance, noting cyclical improvement in loan performance and a trend favorable for credit quality. The second report comments on underwriting practices, noting ongoing relaxing in standards.

According to responses in the New York Fed's most recent Survey of Consumer Expectations (SCE), consumers last month indicated a median home price change expectation of 4.0 percent, reversing an increase to 4.6 percent in January. Price change expectations hovered around 4.5 percent for much of last year's second half, coming down only when national reports indicated a slowdown.