Enjoy access to a free NMLS renewal class when you attend an in-person event.
The Consumer Finance Protection Bureau published a report which briefly shows that credit applications across a number of loan types, including mortgages, were mostly back to pre-pandemic levels as of May 2021. The bureau stated that prime and near-prime consumers are reportedly the reason for the recovery in applications across auto loans, new mortgages and revolving credit cards.
“While consumer credit applications have generally recovered to pre-pandemic levels in the aggregate, we see important differences across consumers,” said acting CFPB director David Uejio. “Both borrowers with superprime and subprime credit scores are still not applying for credit as much as they were pre-pandemic. We will continue to keep a close watch on the marketplace as the economic recovery continues, to help ensure all consumers have access to financial products and services that are fair, transparent, and competitive.”
According to the report, new mortgage credit inquiries saw a smaller drop in March 2020 compared to other types of inquiries and then surged. The surge was likely due to the increase in buyers trying to capitalize on historically low interest rates in the spring and summer of 2020.
Subsequently, inquiries have exceeded their usual, seasonally adjusted volume by 10 to 30 percent, reflecting the unusually high activity in the mortgage market throughout the pandemic, according to the CFPB.
Meanwhile, the bureau reported that consumers with deep subprime credit scores showed declines in new mortgage inquiries.