Business is booming.

You want the good news or the truth?

However, he added: “In a market where the predominance of cash-out refinancing will end up with households having a higher interest rate than they currently have, one of the things you want to be careful of is to ensure that they are not doing that under stress, which could lead to loan quality declines and also damage to the household.

“We’re continuously monitoring the tails of risk in that space looking at things like loan to value ratios, debt to income ratios and credit scores to make sure that there’s not a quality decline in that space as people tap their equity. We just want to make sure that that it’s not increasing risk.”

But it’s not all gloom and doom, Duncan said – there are still positives in the housing market, even if there’s a recession.

“A recession from our perspective is likely to be mild, in part because it’s still the case that in the US the available supply of the housing is not sufficient to meet the demand,” he said.

“If we do see a recession…as interest rates reset to a lower level it’ll increase affordability. So those who are employed and would like to buy a home, will see an improvement in the post-recession, affordability environment.

Source link

Comments are closed, but trackbacks and pingbacks are open.