Fisher, Richard

Speculative activity was also a part of the loan-officer survey [conducted by the Federal Reserve]. Over the past 12 months, more than three-fourths of the banks said that less than 10 percent of residential mortgage loans they originated went to the purchase of a second home or investment properties. At the same time, delinquency rates provide little reason for concern...Even so, we should not be overly sanguine about the housing boom and associated trends in home-mortgage lending...We will continue to keep a watchful eye for the potential dangers of stagnant or falling home prices in the future, combined with the potential for increases in mortgage payments relative to income.