As a mortgage banker, you must simultaneously weigh individual and systemic risks when planning and evaluating lending strategies. A comprehensive understanding of the macroeconomic environment can mitigate lending risk. For example, home values affect loan performance, and values are a function of housing inventory and consumer demand, among other things.
Market health variables presented in the Housing Tides Index measure how closely housing supply is increasing to match employment and demographic changes. Monitoring these changes will help you target the markets where you can best reach millennial and first-time homebuyers. When considered alongside measures of housing affordability and the Tides housing permit forecasts, you can also better assess likely future home value gains or losses and adjust mortgage rates and lending in each MSA accordingly. By acting proactively you can cut mortgage delinquencies, defaults and foreclosures while preserving valuable resources.
For banking professionals who underwrite acquisition, development and construction (ADC) loans, the Housing Tides Index can enable a better assessment of the risk profile for a given project type and market. A single-family development in Phoenix is substantially different than a multi-family project in San Francisco. Limit risk and maximize returns by leveraging the full complement of data that Housing Tides puts at your fingertips.
Your lending practices will also benefit from an understanding of housing media sentiment and Consumer Confidence, which represent the demand side of the market. Consumer perspectives affect media coverage and presentation and vice-versa. Reports covering meetings by the Federal Reserve, whose actions largely determine mortgage rates, also affect home purchase and refinance decisions. Aggregating sentiment across all news sources gives us a consensus view of the housing industry, while reviewing sentiment by a specific geography, news outlet or intended audience enables a more targeted review of media content. Forecasts are highlighted in the text so that you can see predictions offered by industry professionals. Media and consumers complete a self-reinforcing cycle and an understanding of these conversations may lead to better lending decisions.
You can use the Housing Tides Index to gain a third-party perspective and compare economic data key to healthy lending practices across housing markets.
The Housing Tides Report is the comprehensive, timely source of housing information you’ve been missing – let us help you improve your lending strategy today.
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