May 6th, 2009 | 
Author: The Federal Reserve noted in a survey of loan officers that was released on Monday, May 6, that demand for prime mortgages rose in the first quarter for the first time since early 2007, and this was in spite of the fact that many banks tightened their requirements for home loans.
The increase in demand comes as 30-year mortgage rates fell to an average 4.78% last week.
Other details of the survey state that, about one half of U.S. banks tightened their lending standards on prime mortgages, which is up from about 45% from that given in a survey that was released in early February.
65% of banks reported having tightened their standards on non-traditional mortgages, such as adjustable-rate loans with multiple payment options, up from 50% in the last survey, and nearly 60% of banks said they tightened their requirement on credit card loans in the past three months.
The Fed’s survey was based on responses from fifty three domestic banks and twenty three foreign banks.
Additional good news was also reported by the National Association of Realtors which announced that its Pending Home Sales Index showed that pending sales of existing homes climbed upward in March, making two consecutive months of increases.
The NAR attributed a rise of 3.2% in signed contracts to “a flood of first-time home-buyers taking advantage of excellent mortgage interest rates”.
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