A new survey on U.S. home purchases released by LendingTree suggests that banks seem to be loosening standards for down payments. The report found that the average down payment dropped to 16.1% in May compared to 17.6% two years ago.
“Lenders have increasing confidence that the loans they’re originating today are less likely to default,” says Doug Lebda, founder and chief executive of LendingTree.
Another sign of increased confidence came from Wells Fargo Chief Financial Officer Tim Sloan who stated that he “doesn’t expect another housing bubble to emerge because lenders are maintaining credit standards. No one’s doing the crazy kind of subprime lending that fueled the historic housing bubble that burst in dramatic fashion in 2008.”