Lender sentiment toward housing has improved during the second quarter, with lenders reporting higher demand for purchase mortgages, according to Fannie Mae's Mortgage Lender Sentiment Survey.
Fannie Mae reported Tuesday that 70% of lenders surveyed noted demand growth for government-sponsored-enterprise-eligible purchase mortgages over the quarter, versus 20% in the previous quarter and 71% a year ago. The year-over-year decrease stems from lower growth among midsized institutions and mortgage banks.
Looking ahead, 60% of lenders expected purchase demand growth to pick up during the third quarter for GSE-eligible loans, and 43% expected it to increase for non-GSE-eligible mortgages. While both of those figures were lower than a year ago, the share of lenders expecting higher purchase demand for government loans inched up to 58%.
On the refinance side, lenders told Fannie Mae that they experienced much higher demand than in the previous quarter across all loan types. But in terms of future expectations, sentiment decreased dramatically quarter-over-quarter.
Fannie Mae also found that the trend toward easing of credit standards has dissipated. While in this quarter lenders reported moderate easing thanks in part to a rebound in the loosening of government credit, roughly 90% of lenders said that they expect credit standards to remain unchanged moving forward.
