Credit Conditions in the Pandemic Mortgage Market

Mondragon, John

Journal Article

Credit Conditions in the Pandemic Mortgage Market

Abstract: The recent rapid rise in house prices has raised some questions about the potential risk to broader financial stability. However, credit quality in the mortgage market appears to be very high, and lending standards tightened in early 2020. While low interest rates increased the demand for refinancing, evidence from large nonconforming loans shows that credit supply contracted sharply in March 2020 and remained tight through the early pandemic period. The shift in credit supply suggests that lenders adjusted their standards to mitigate some risk in the housing market.

Keywords: covid19; pandemic; mortgage refinancing; mortgage markets; credit conditions;