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Bankers Show Record-High Optimism About Housing Recovery

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Bankers across the U.S. are confident that the housing recovery is here to stay. According to a new quarterly survey of banking professionals by FICO, 71 percent think home prices are “rising at a sustainable pace.”

In regards to mortgage delinquency rates, 39 percent expect rates to drop over the next six months and 45 percent believe they will remain steady.

The results of the survey showed the most optimistic numbers from professionals since the survey began 12 months ago.

“The latest survey results, combined with data that indicates the real estate market is improving in many regions, paint a positive picture for a sector of the economy that has been slow to join the recovery,” said Andrew Jennings, chief analytics officer at FICO. “Mortgage lenders have been understandably guarded over the past five years. The improvement in their sentiment should be welcome news, and I wouldn’t be surprised to see lenders cautiously expanding their mortgage and home equity lending businesses.”

A total of 59 percent of bankers surveyed expect credit supply for mortgages in the next six months to meet demand. The FICO survey also revealed that 60 percent believe credit supply for mortgage refinancing will meet demand in the upcoming months.

Banking professionals who responded to the survey also expressed optimism in other areas of consumer credit outside of mortgages. The growing optimism about car loans and credit cards may be the signal of a solidly recovering economy.

According to FICO, 79 percent of those surveyed said they expect delinquencies on car loans to decrease in the next six months.

Credit card delinquencies were also issued some confidence of improvement among consumers. In terms of credit card delinquencies, 75 percent of bankers said they expect rates to fall during the next six months. A majority of respondents, or 57 percent, said they expect consumers to request credit and 46 percent believe the approval rate for consumers requesting credit to increase in the coming months.

Only one area of the survey revealed pessimism among banking professionals — student loans. Only 39 percent of banking professionals expect delinquency rates to remain steady or decline, making it the sixth consecutive month showing concern about student loans.

Image: iStockphoto

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  • Mark Hide

    Great article and great news!

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