Fed Survey: Mortgage Demand Weakening

Bank loan officers are reporting that demand for residential mortgage loans is weakening, according to an October survey by the Federal Reserve Board."About 25% of banks on net reported weaker demand for mortgages to purchase homes, compared to 8% in July," the Fed survey of senior loan officers concluded. Twenty of the 53 banks that responded to the Fed survey said demand for residential loans is weakening, while seven said it was stronger. Credit standards on residential mortgages remained unchanged since July. However, banks are loosening their standards on commercial real estate loans. "Almost one-fifth of domestic banks, on net, reported an easing of lending standards on CRE loans over the past three months, double the fraction in the previous two surveys," the Fed said. Eighteen of the 57 banks surveyed reported an increase in demand for CRE loans, while five said it was weaker.