GOOD NEWS! Three recent reports tell us that lending standards are easing, which is promising for first-time buyers and current homeowners who’d like to move or buy a vacation or retirement home. Here’s what they say:
The Mortgage Bankers’ Association Mortgage Credit Availability Index (MCAI) measures the credit available in the home mortgage market. Increases in the index indicate a loosening of credit, a trend that is shown for this year.
Fannie Mae’s latest Mortgage Lender Sentiment Survey reports asked senior mortgage executives if their companies’ credit standards had tightened, eased, or remained unchanged during the prior three months; 20% more lenders reported easing as opposed to tightening standards. This amount of “net easing” represents a new survey high. There is also a rise in the number of lenders who expect their standards to continue to ease over the next quarter. Doug Duncan, senior vice president and chief economist at Fannie Mae, confirmed the Survey’s report and said that they
“expect that lenders’ tendency toward easing credit standards, together with relatively low mortgage rates and a strengthening labor market, will continue to support the housing market expansion.”
The most recent Ellie Mae’s Origination Insights Report showed that the average FICO score on a closed loan fell to its lowest point in over a year, to 724 in August.
Ellie Mae did, however, warn that the average interest rate on closed loans is beginning to rise, hitting 4.31 in August.
What does all this mean for you? If you’re considering a first-time home purchase, a larger home, or a vacation home, now may be the right time. Mortgage lending standards are easing; interest rates are starting to rise.
Source:
SimplifyingtheMarket.com
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