Brief The Credit Box Shows Early Signs of Loosening: Evidence from the Latest HCAI Update
Bing Bai, Wei Li, Laurie Goodman
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The Housing Finance Policy Center’s latest measure of the availability of mortgage credit, the Housing Credit Availability Index (HCAI), reveals that credit availability started to slowly increase from Q3 2013 to Q1 2015, after years of post-crisis credit tightening, moving from 4.6 percent of purchase loans that are likely to default to 5.7 percent. This loosening was sparked by GSE-backed and FHA, VA and RD loans. Significant space still remains to safely expand the credit box, however. If the current default risk were doubled, it would still be well within the pre-crisis standard of 12.5 percent in 2001–2003.
Research Areas Housing finance Housing
Tags Federal housing programs and policies Housing markets Housing and the economy Agency securitization Credit availability Homeownership
Policy Centers Housing Finance Policy Center