Banks reported tighter standards, weaker demand for most types of loans; Increased demand for HELOC

on Estimated risk per 07.11.2022 17:06:00

From the Federal Reserve: Senior Loan Officer Opinion Survey on Bank Lending Practices, October 2022

The Senior Loan Officer Survey on Bank Lending Practices (SLOOS), conducted in October 2022, looked at changes in the standards and conditions of bank loans for businesses and households, as well as demand for them over the past three months, which is broadly in line with the third quarter. 2022.

With regard to business loans, survey respondents generally reported tighter standards and weaker demand for commercial and industrial (C&I) loans to firms of all sizes for the third quarter. At the same time, banks reported tighter standards and weaker demand for all commercial property loans (CRE) categories.

In terms of household loans, lending standards have tightened or remained largely unchanged for all categories of residential property loans (HRL), and demand for all such loans has declined. Besides, banks reported tighter standards and higher demand for home equity credit lines (HELOC). Standards have been tightened for credit card loans and other consumer loans, while standards for auto loans have remained unchanged. Meanwhile, demand for credit card loans rose, other consumer loans remained flat, and auto loans declined.
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Senior Loan Officer Survey, Real Estate Loan Demand Click on the graph to enlarge the image.

This graph of demand for residential real estate is taken from Senior Loan Officer Survey Schedules.

This suggests that demand has fallen sharply.

The left graph is from 1990 to 2014. The right graph is from 2015 to Q3 2022.