How Dire Are Current Capacity Constraints

first_img March 15, 2013 493 Views Agents & Brokers Attorneys & Title Companies Capital Economics Demand Federal Reserve Investors Jobs Lenders & Servicers Mortgage Applications Processing Purchase Loans Refinance Service Providers 2013-03-15 Krista Franks Brock Share in Data, Originationcenter_img How Dire Are Current Capacity Constraints? Following Federal Reserve Governor “”Elizabeth Duke’s””: “”comments””: earlier this week on the impact capacity constraints are having on the housing market, “”Capital Economics””: released a brief market update Thursday with a similar focus. [IMAGE]Like Duke, Paul Diggle of Capital Economics identifies capacity constraints as “”one of the factors contributing to the marginal role being played by mortgage-dependent buyers.”” [COLUMN_BREAK]According to Diggle, “”[E]asing in capacity constraints is a necessary precondition to mortgage buyers playing a role in the housing recovery.”” Currently, the number of mortgage applications processed by an individual employee is near record-high levels, according to Capital Economics. The average application processing timeline is also “”historically high,”” according to the firm. Between 2005 and 2009, real estate credit employment plummeted 45 percent. At the same time, mortgage applications fell 75 percent. However, while applications have made somewhat of a comeback–nearly doubling since their crisis low–employment has risen a mere 7 percent. Diggle suggests a few reasons for the slow return in employment, including increased training costs resulting from new industry standards, put-back risk, and a belief among many that the refinance boom is temporary. However, with mortgage lending “”proving to be a very profitable area”” and funding costs remaining low, Diggle sees “”reasons to be optimistic.””last_img read more

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