I've long thought that the first light for a recovery of U.S. housing would have to shine in the mortgage sector. After all, the area has been decimated by a lack of lending standards and the disappearance of a number of prominent lenders, including Countrywide, which was bought earlier this year by Bank of America
On that basis, it seems to me that a U.S. housing recovery is materially dependent, at least in part, on adherence to more uniform standards and ultimately increased volume in the lending arena. So, whether the light that's beginning to shine is a bit of positive illumination or an oncoming train remains uncertain.
With mortgage rates having declined during the past few weeks, the likes of Bank of America, Regions Financial
A significant portion of the increased activity appears to relate to sliding interest rates, which last week fell to an average of 5.17% for 30-year fixed-rate loans -- the lowest level since Freddie Mac
Other banks experiencing increased demand include US Bancorp
Any rays of mortgage lending sunshine these days should be considered a potential first positive step for homebuilding in the U.S. My intention is to keep tabs on this trend among the major financial institutions mentioned above. While I've said that the mortgage sector -- and consequently homebuilding -- can't possibly recover meaningfully until 2010, I wouldn't mind being forced to cook up and devour a little financial crow.
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