Each quarter, the Federal Reserve surveys 84 U.S. banks about demand for loan products and general banking conditions.

It's like "street reporting"; a pulse of what's really happening behind retail bank walls.  Almost always, it paints a different picture of lending from what's being reported on the news.

For example, according to April's survey results, demand for mortgages is picking up and may rebound into positive territory by July of this year.

To hear the media tell it, you'd think that the mortgage and real estate business was DUI DOA.

When mortgage demand spikes like this, we have to at least consider that consumers may be submitting mortgage applications to multiple banks at the same time but the more likely answer is that we're moving into a favorable real estate market.

It's on-the-street surveys like this tell the other side of the housing market story; the one to which business television is oblivious and about which top real estate and mortgage professionals won't stop shouting:  Homes are selling, buyers are buying, and there is a growing demand for home loan products. 

Projected over the next handful of months, the housing market may be positioning for a strong national recovery.

Source:
The April 2008 Senior Loan Officer Opinion Survey on Bank Lending Practices
The Federal Reserve
April 2008
http://www.federalreserve.gov/boarddocs/SnLoanSurvey/200805/

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Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.