Lenders are more confident about the direction of home prices than at any time in the last three years, according to a quarterly survey conducted for decision-management firm FICO by the Professional Risk Managers’ International Association.
Among the bank professionals who responded to the survey, which measured sentiment in the first quarter of this year, 71 percent said that home prices are rising at a “sustainable pace” from a risk perspective, FICO reported. The survey also found that only 16 percent of lenders expect delinquencies to increase over the next six months, with 45 percent predicting that they will remain flat and 39 percent predicting that they will decrease, according to FICO.
“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 Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs in a statement. “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.”
All of those statistics are the most positive recorded since the survey’s inception three years ago, FICO said.
The survey also suggested that most industry professionals believe that there is enough mortgage credit to meet demand. 59 percent of bankers who responded to the survey said that supply of credit for residential mortgages would meet demand over the next six months, and 60 percent thought mortgage refinancing credit would meet demand over the same period.
This article is reposted from Inman News Source: http://www.inman.com/news/2013/04/9/lenders-more-optimistic-about-home-prices