Hi everyone, Rachel Pope with Jean Scott Homes, here again to continue with our series on how COVID-19 is affecting the real state market and five things that we know to be true about today’s housing market that were actually different that in 2008.
Tom Scott, Realtor® on our team, did a video last time and he discussed affordability and home prices. Today I’m going to continue on with the series and discuss mortgage standards. Mortgage standards are actually drastically different than they were leading up to the housing bubble. The mortgage credit availability index is released by the Mortgage Bankers Association. Each month, it measures a lender’s willingness to take on additional risk; the high the index, the easier it is to get a loan with a less stringent qualification requirement.
The lower the index, the harder it is. As you can see, the index skyrocketed during the housing bubble. Today, we are nowhere near the levels seen at the time and we can see that after the crash, lending standards have tightened and have remained that way ever since.
For more information about this, feel free to reach out, we’d love to share with you the resources we are using during this time. In the next video, Tom is actually going to discuss home equity.
To follow along with our series, here’s Part 3: Affordability and Home Prices with Tom Scott and here’s Part 5: Home Equity with Tom Scott.