Fannie Mae 4Q Survey Indicates Slowdown in Consumer Demand

Despite looser credit consumer demand has been on the decline, according to Fannie Mae's fourth-quarter Mortgage Lender Sentiment Survey.

In the government sponsored-enterprise's survey, mortgage lenders blamed tepid consumer demand for their decreased profit projections.

To combat this lenders have lowered the standards by which prospective homebuyers must qualify for mortgage credit, with only 13% of lenders saying their standards have tightened, down from 28% of lenders in the first quarter of this year.

"While government regulatory compliance remains the top driver of declining profit margin expectations across all lenders," said Doug Duncan, senior vice president and chief economist at Fannie Mae in a release detailing the survey findings, "more lenders, and in particular larger lenders, are increasingly concerned with consumer demand risk."

Still, Duncan said in the release, "We believe that some combination of easing of credit standards, relatively low mortgage rates and ongoing labor market improvements will help the housing market to grow steadily, albeit modestly, in 2015."

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