The housing market has already begun a strong recovery, however, there is still one area that has the potential to slow the process.
Homebuying demand is strong, mortgage applications have continued to climb for 8 weeks, and buying activity is 13% higher than this same time last year.
However, one problem that can affect how quickly the housing industry fully recovers is the tightened lending standards of mortgage providers. The Mortgage Bankers Association reported a mortgage credit decline of 3.1% in May, marking the third straight monthly decline.
Tightened lending standards are making it harder for millennials to achieve homeownership during this time and current homeowners to take advantage of record low interest rates for refinancing purposes.
“If there’s any good news on this front, it’s that mortgage lenders appear to be hiring as aggressively as they were before the pandemic. This provides a glimmer of hope that mortgage credit availability is going to bottom out soon.”