Banks See Increase in Demand for Traditional Mortgages

Hopeful glimmers of economic recovery are being seen (from pending home sales improvements to a rallying stock market) right now, and it is no surprise that many are starting to look for home loans again. Demand for traditional mortgages is up, probably due to a combination of low mortgage rates, low home prices and government incentives. And, while traditional mortgages are in high demand, it is interesting to note than other types of mortgages are not, reports MarketWatch:

For the first time in five years, banks reported higher demand for prime residential mortgages. But demand fell on net for all other types of loans — commercial and industrial loans, commercial real estate loans, nontraditional residential mortgage and consumer loans.

Clearly, for the time being at least, people have learned a lesson about “creative” financing and subprime loans. It is apparent that home buyers are more interested in making sure they can truly afford their homes long term, rather than trying to “upgrade” through the financing techniques that got us in this mess.