As that source of housing finance has dried up significantly, and housing lending growth has been negative for more than two years now, a much greater share of lending has been in the “conforming” market supported by the agencies.
Going forward, the output gap is expected to move into positive territory and gradually increase further from the second half of fiscal 2016, albeit with fluctuations due to the frontloaded increase in demand prior to the consumption tax hike, with an increase in capacity utilization rates as exports and production are likely to pick up.