Banks Retaining More Conforming Loans On their Balance Sheets – What that Means For The GSEs

Despite residential housing prices in the U.S. witnessing a volatile ride over the past two decades, Goldman Sachs analysts expect U.S. nominal prices to grow by between 2.8% and 3.7% from 2017-2019. Marty Young and colleagues point out in their January 15 research note titled “US banks keeping more conforming loans on their balance sheets” that major U.S. banks are likely to keep the lowest risk conforming loans.

Long-run U.S. house price growth lags that of other countries

Tracing the booms and busts in house price growth in the U.S., Young and team point out that the long-run house price growth in the U.S. has been more moderate than it has been in several other countries such as the U.K. and Canada....