Mortgage loan developments less prominent on supply side
Banks’ credit standards also play a role in mortgage lending. These are the internal guidelines that banks use in their lending practices, including, for example the conditions that households must meet to obtain a mortgage.
The BLS results show that slightly more banks now say they have tightened credit standards than in the previous quarter. The main reasons are the general economic outlook and the creditworthiness of households applying for mortgage loans.
The housing market outlook was mentioned less frequently in the most recent survey, on the other hand. Looking ahead to the second quarter of 2023, banks indicate that they do not expect to tighten or relax their credit standards significantly.