Getting a mortgage has been progressively getting easier since 2012, however, the first few months of this year indicate that credit is tightening and obtaining a mortgage is no easier than it was a year ago.
The Zillow Mortgage Access Index (ZMAI) quarterly report found that access to mortgage credit tightened in the first quarter of 2015 and is almost unchanged from a year ago.
According to Zillow, in a survey earlier this summer of more than 100 economists and housing experts, more than 60 percent said they expect mortgage regulations to loosen further, with many expressing concern the market will become too lax over the next year.
Access to mortgage credit has improved in Q1, reaching 65 and is over two-thirds of the way back to 2002 pre-crisis levels, Zillow says.
The ZMAI uses seven variables to measure access to credit: Credit Score, Debt-to-income ratio, Private Mortgage Insurance, Second Mortgage Prevalence, Non-conforming Loans, Mortgage Rate Spread, and Zillow Mortgage Quotes.
"Recent market volatility is causing some lenders to be more cautious in their underwriting," said Zillow Chief Economist Dr. Svenja Gudell. "Tighter mortgage access will make it harder for people with low credit scores to get a home loan, and even people who can get approved for a mortgage will have fewer options in terms of available mortgage products."
In August 2004, mortgage credit was easiest to obtain when the ZMAI reached 136.8. Following this period of loosening credit, availability tightened over the next few years. By May 2007, both the housing and mortgage availability began to fall, leaving home values down more than 22 percent and credit the tightest in recent history. Credit hit it lowest point in September 2010, when the ZMAI was at 11.8.
"Despite fluctuations from quarter-to-quarter, there has been little progress toward making mortgages easier to obtain over the last year," the report said. "In the long-term, experts expect mortgage access to continue improving.