Mortgages in Low Demand

\r\nAs the Federal Reserve continues to eye increasing national mortgage rates, banks are stating to think that the quality of loans that will be originated will decline as well. July showed another week month for mortgage demand, and though the Fed did not increase rates last week, they continue to stay on path of a two-year increase initiated last year. Housing demand has also decreased, creating a market where homes are sitting on the market for long periods of time.\r\n

The Fed has reported that only a few banks have noted a decline in the quality of loans over the last quarter, but note that the next 12 months that number could increase. Commercial and industrial loans are maintaining production, although quality for them is expected to decrease as well due to lowered standards. Aggressive competition for those loans lowered prices and standards in an effort to increase business. The Federal Reserve is expected to increase rates again this week after their one week hiatus. \r\n