Net Percentage of Bank Loan Officers Reporting Stronger Demand for Residential Mortgage Loans
The July 2012 Senior Loan Officer Opinion Survey on Bank Lending Practices addressed changes in the supply of, and demand for, bank loans to businesses and households over the past three months. This summary is based on responses from 64 domestic banks and 23 U.S. branches and agencies of foreign banks.
In the July survey, modest fractions of domestic banks, on balance, continued to report having eased their lending standards across most loan types over the past three months.2 Relatively large fractions reported stronger demand for many types of loans over that period. In contrast, lending standards at U.S. branches and agencies of foreign banks continued to tighten for commercial and industrial (C&I) loans and were unchanged for commercial real estate (CRE) loans; demand for both types of loans reportedly weakened, on net, at those institutions.
At domestic banks, lending policies for loans to businesses generally eased over the past three months, and demand increased somewhat. Although a modest fraction of domestic banks reported having eased standards on C&I loans to large and middle-market firms, standards on loans to small firms were little changed on balance.3 In addition, domestic banks continued to ease many terms on C&I loans to all types of firms. While loan demand from large and middle-market firms strengthened somewhat further over the past three months, loan demand from small firms was unchanged, on balance, over this period. A modest fraction of domestic banks reported that they had eased lending standards on CRE loans over the past three months, while a relatively sizable fraction, on net, continued to indicate that demand for such loans had strengthened.
Regarding loans to households, reported changes in standards were mixed across loan categories, while demand increased somewhat. Lending standards over the past three months were little changed, on net, for prime mortgages and tightened somewhat for nontraditional mortgages. However, a relatively large fraction of respondents reported having experienced stronger demand for prime mortgages over the same time period. Modest fractions of domestic banks, on net, indicated that they had eased standards on auto loans and on credit card loans. Standards on other consumer loans remained little changed. Small net fractions of banks reported increased demand for credit card and other consumer loans, while a relatively large fraction of banks reported an increase in demand for auto loans.
