San Diego looks set to become the beneficiary of new mortgage loans being made in 2013. Increasing confidence being fueled by the housing rebound is making mortgage lenders hungrier to make new home loans.
Despite pessimistic claims that “it’s different this time,” true San Diego real estate experts have pointed out that credit markets move in cycles. Similar cycles can be seen in the housing market, which means looser lending on the horizon.
When home values rise and we enter new boom periods, banks and mortgage lenders get more aggressive about making loans. They know that their risks are greatly reduced as borrowers will work harder to keep up with payments to preserve growing equity. Subsequently, better job markets will increase their ability to do so. Of course, as collateral value rises, lenders will only be happy to take back property secured by defaulted loans.
As interest rates continue to creep up and lenders are able to secure higher yields on making jumbo mortgages, banks will become even bolder.
Lending trends and plans to make far more loans are already being seen on the ground level in San Diego. One California trust, specializing in jumbo mortgage loans, forecasts their lending volume to soar from $2.5 billion last year to $8 billion this year. Another San Diego mortgage banker, from Guild Mortgage, told UT San Diego that they expect to do a record $7 billion in loans in 2013. This coming after already seeing their portfolio rise 5 times to $10 billion in the last 5 years.
This is on top of U.S. commercial mortgage lending surging 40% last year and cash rich investors actively hunting for borrowers on LinkedIn.
This scenario is not just good for investors and those buying a home in San Diego, but also means more jobs and a huge economic boost.
