The Housing Finance Policy Center’s latest credit availability index found that it was easier for home buyers to secure financing during the fourth quarter of 2015 than it was during the previous quarter. This is significant because it was the first time in a year that the index showed mortgage credit becoming more available. Following the housing crash, lending standards tightened and it became more difficult for some prospective buyers to get a home loan. In subsequent years, standards have loosened somewhat but continue to be a concern for some buyers. For this reason, credit availability is an important indicator. As it becomes easier to get a home loan, potential buyers who once weren’t able to qualify for a loan may become eligible and decide to enter the market. But though increasing availability is encouraging, the report says there is still a lot of room for improvement. In fact, the Housing Finance Policy Center says the current default risk could be doubled and still be within the range of pre-crisis norms. The HCAI is updated quarterly and has been conducted since the first quarter of 1998. More here.
