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Report: Expect Even Lower Lending Standards, Economist Comments


A new Fitch Ratings report says lenders will slacken credit standards “as refinance volume is likely to dry up” from rising mortgage rates.

The report says mortgage volume on the whole will drop from the rising rates and home prices—up 4.5%, creeping to their 2006 housing bubble peak.

Georgia State University's Director of Economic Forecasting Center at J. Mack Robinson College of Business Rajeev Dhawan tells Bisnow the report has decent predictions, but it is “based on a simple reading” of the FOMC’s dot chart released in December

Fitch Ratings assumes a guaranteed four rate hikes in 2016, a stretch given the current stock market and global economic turmoil.

"I expect only one rate hike, even if the stocks do recover,” he says, adding that the Fed will “take a pause until the election is over and then start over again in 2017.”