Good news for potential homebuyers: Qualifying for a mortgage continues to get a little easier.
The Mortgage Bankers Association’s Mortgage Credit Availability Index rose 2.2% in April—the fifth monthly increase in the past seven months—indicating lenders are loosening credit standards. (A decline in the index would suggest lenders are tightening credit.) Credit availability is still well below pre-pandemic levels, but the chart below shows a clear shift in recent months.
When unemployment surged following the onset of the COVID-19 pandemic in March 2020, loan availability tumbled to its lowest level since December 2012 as lenders moved to protect themselves from potential defaults. Credit availability crept higher as the economy began to stabilize, in part from government stimulus programs.
“The uptick in credit supply comes as the housing market and economy continue to strengthen," said Joel Kan, MBA's associate vice president of economic and industry forecasting, in a statement.