Matthew Speakman on what’s driving homebuyer demand

Zillow Economist Speakman explains what Zillow’s recent report on homebuyer demand tell us about the current state of the housing market.

Record low mortgage rates hold steady at 2.72%

This is the second week in a row rates have sat at the lowest recorded level in the survey’s near 50-year history.

What Yellen as Treasury Secretary would mean for housing

Experts weigh in on former Fed Chair’s possible impact on GSE reform and how she could jumpstart the economy.

Building the one-touch digital mortgage

As Katherine Campbell drives toward a one-touch mortgage, she’s taking time to share what she has learned along the way.

Politics & MoneyMortgage

Is mortgage credit really too tight since COVID-19?

A closer look reveals why this argument is flawed

Since the onset of COVID-19, the Twittersphere has been ripe with rumor and speculation that the financial requirements to qualify for a mortgage have become increasingly more rigorous since the crisis and this would put a damper on the housing market. 

Logan Mohtashami
Logan Mohtashami
Lead Analyst

It is true that the COVID-19 crisis did temporarily wreak havoc on the mortgage market. Case in point — the week of March 9 and the mortgage market meltdown. You may recall the precipitous drop in rates which resulted in a flood of refinance requests which amplified early pay off risk, mortgage margin calls, and the rapid rebounding of rates. 

Needless to say, all that drama from COVID-19 created significant stress in the mortgage market. As a result, many non-QM lenders left the market and FHA homebuyers with low FICO scores saw credit get tighter. The U.S. jumbo market loans saw some difficulty as well. Some lenders even stopped offering home equity lines.

While that all sounds pretty drastic and scary, at the end of the day this prevented only about 4.5%-6.2% of all purchase loans from closing of those that would have closed prior to the meltdown. This means that approximately over 93% of the purchase loans that could have closed during the period of the record-breaking expansion still closed during the early part of the COVID crisis. This is because after 2010, the loan profiles of mortgage seekers before and during the COVID crisis have been, in a word, excellent– the best loan profiles that I have ever seen in my 24 years of lending experience.

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3d rendering of a row of luxury townhouses along a street

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