Mortgage credit availability rose this year and will stay that way in 2020, according to the Federal Reserve Bank of New York.
“Reported rejection rates for credit cards, mortgages, and mortgage refinance applications all declined compared to 2018,” the New York Fed said in its Credit Access Survey released on Monday. “Looking ahead, households also generally expect to be more likely to apply for and receive credit over the coming year.”
The number of home loan applications increased in 2019, compared to the prior year, the report said, “driven by respondents with a credit score higher than 680.”
Mortgages are becoming more available as a strong labor market drives late payments to record lows. The national mortgage delinquency rate, measuring overdue payments, fell to 3.39% in October, three basis points from the record low set in May, Black Knight said Nov. 25.
The U.S. unemployment rate was 3.5% in November, a five-decade low, the Commerce Department said in a Dec. 6 report. The majority of job gains were attributed to healthcare and professional and technical services, the report said.
Low mortgage rates will push home lending this year to a 12-year high of $2.07 trillion, Mortgage Bankers Association said in a Nov. 20 forecast.
The volume for mortgages to purchase homes probably will total $1.27 trillion, the highest since the peak of the housing bubble in 2006, the group said. Refinancing probably will reach $796 billion, the most since 2016, MBA said.
MBA’s Mortgage Credit Availability Index rose 2.1% to 188.9 in November, indicating a loosening of credit standards. It was close to the 11-year high of 189.5 in June, the trade group said in a Dec. 5 report. November’s reading was the third-highest reading of the post-crash years.