Modest Improvements in Demand, Lending Conditions for Real Estate Loans During Q4 2023


According to the Federal Reserve Board’s January 2024 Senior Loan Officer Opinion Survey (SLOOS), lending standards loosened for all commercial real estate (CRE) loan categories and residential real estate (RRE) categories in the fourth quarter of 2023.  Demand for RRE and CRE loans improved across all categories over the quarter, except for government loans. Even though the federal funds rate remained unchanged, the shifting expectations from the Federal Reserve toward rate cuts is having an impact on sentiment among major lending institutions. A higher net percentage of banks reported looser residential mortgage lending standards in Q4  2023 compared to Q3 2023 for all categories of RRE loans.  The largest improvement occurred for Qualified Mortgage (QM) jumbo which fell 10.6 percentage points from 26.0% in Q3 2023 to 15.4% in Q4 2023. GSE-eligible, Non-QM jumbo, and Non-QM non-jumbo experienced decreases of at least 8 percentage points quarter-over-quarter. All RRE categories saw increases in loan demand, except for government loans which saw a 0.4 percentage points decline from Q3 2023 to Q4 2023.  Subprime experienced a dramatic quarterly shift: it had the weakest demand in Q3 2023 (-71.9%) but rose almost 30 percentage points to become the strongest demand category for RRE in Q4 2023 at -41.7%, relatively speaking.  The remaining five RRE categories had demand increases by single-digits quarter-over-quarter. Compared to Q4 2022, all RRE categories increased the share of banks reporting stronger minus weaker demand by at least 30 percentage points. Both multifamily loans as well as all CRE construction and development loans, on net, saw modest improvements in lending conditions from Q3 2023 to Q4 2023. Construction & development experienced the share of banks reporting tightening conditions fall 25.2 percentage points to 39.7%. Multifamily improved by 24.8 percentage points to 40.7% in Q4 2023. Fifty percent of banks reported weaker demand for loans secured by multifamily properties and 46.6% for construction & development loans; This is slightly more positive compared to Q3 2023, where both categories were greater than 50%. Year-over-year, demand for construction & development improved 15.5 percentage points compared to Q4 2022 whereas multifamily experienced a small decrease (-0.7 percentage points). ‹ The Age of the U.S. Housing StockTags: ad&c loans, commercial real estate loans, credit, credit standards, Federal Reserve, GSE, lending, lending conditions, loan demand, loans, monetary policy, mortgage finance, real estate loans, residential real estate loans, sloos, subprime

Modest Improvements in Demand, Lending Conditions for Real Estate Loans During Q4 20232024-02-12T13:15:13-06:00

Steps to Boost Your Credit Score


There aren’t shortcuts to improving your credit score. You’ll need to make sound financial decisions for at least several months to offset previous damage you’ve done to your credit record. But that doesn’t mean it can’t be done. Here are four steps to improve your score and increase the chances you’ll qualify for a favorable mortgage loan. Check Your Credit Report Verify that the items listed on your report—especially the negative ones—are correct. If there are mistakes, correcting them is an easy way to help your score. You can order free copies of your credit report at Pay Overdue Accounts Past-due balances are very damaging to your score. Pay off the debt or at least negotiate a plan to get those accounts current. Once current, those accounts will stop adding negative information to your credit report and can generate positive credit-score movement. Use Less of Your Available Credit Carrying a $2,000 balance on a Visa card with a $3,000 limit isn’t going to help your credit profile. Try to pay down those balances, if possible, to less than 50% of your available credit. Another option is to ask for a higher limit. If Visa raises the limit on that card to $6,000, your balance looks better—as long as you resist the urge to add to the balance on that card. Don’t Close Accounts This one is counterintuitive, but closing a credit card account lowers your available credit. Keep that card active and set it up to autopay one or two small, recurring bills, such as your Netflix membership. When you’re ready to start looking for a home, talk to a Texas REALTOR®. He or she can help you understand the many aspects of the homebuying process.

Steps to Boost Your Credit Score2021-05-04T09:16:32-05:00

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