Another Apparent Statistical Discrepancy
While it to be sure is not inconceivable for real estate lending to boom during a housing bust, it is puzzling to say the least. There are three possibilities for this. Either the statistics showing a housing bust is wrong, or the statistics showing booming real estate lending is wrong or for some reasons banks are willing to increase people sharply increase their mortgage debt level even with falling house prices.
The first possibility is the least likely as the statistics come from too many sources and are too consistent for it to be true.
The second possibility is somewhat more likely as most of the increase (130 of 160) during the latest 3 month period came during a single week-between September 27 and October 4. Such a one week increase is not inconceivable but extremely unusual and therefor sort of suspicious.
The third possibility would be far more ominous as this means that debt overhang is accelerating further even with the slowdown and that thus the slowdown is not "doing its job" of clearing excesses. The excesses are then increasing at an faster rate than before, implying even more trouble lies ahead.