Executive Summary
Mortgage financing activity remains a central linchpin for the economic and housing outlook. Recent data indicate that lending standards are easing and supply is increasing in the mortgage market.1 Yet, residential mortgage debt has fallen to historically low levels while the housing recovery remains sluggish (Figure 1). Mortgages as a percent of total assets have fallen to 30.7 percent in Q2, far below the 40-45 percent range seen prior to the recession. In addition, mortgage debt continues to decline on a year-over-year basis (Figure 2). What is holding down stronger growth in the mortgage market? We look at demographic trends to determine whether the headwinds are coming from the supply or the demand side.
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