Home prices are ‘weighing on affordability and constraining sales.’ Here’s another piece of an incomplete behind-the-scenes puzzle of the housing market that has surged to new record highs. Fannie Mae – one of the Government Sponsored Enterprises (GSE) that guarantee eligible mortgages and package them into mortgage-backed securities that are then sold to institutional investors – had some disconcerting words in today’s Mortgage Lender Sentiment Survey for Q2:
More mortgage lenders say they have eased credit standards recently and expect further easing in the coming months.
Why? Cooling demand for mortgages. Mortgage lenders in the survey include banks of all sizes, specialized non-bank mortgage lenders (they don’t take deposits), and credit unions.
The net percentage of mortgage lenders that reported having eased credit standards over the past three months has been rising since Q4 2016. And the net percentage of lenders that expect to ease credit standards over the next three months for all three types of mortgages – GSE eligible, non-GSE eligible, and government loans such as FHA and VA insured mortgages – ‘reached or surpassed survey highs this quarter.’
This post was published at Wolf Street on Jun 26, 2017.