You Need Stellar Credit to Buy in This Housing Market

Core Insights - Credit scores for homebuyers in September reached their highest levels in at least six years, indicating a trend of better-financed borrowers entering the market as mortgage rates declined [2][6] - The average credit score for mortgage purchases hit 736 in September, significantly above pre-pandemic levels, suggesting a tightening of credit criteria by lenders [3][4] - The average credit score for refinancing also increased to 722, reflecting a similar trend among homeowners seeking to take advantage of lower rates [7] Mortgage Market Trends - Mortgage rates have been above 6% for over three years but fell below 6.3% in mid-September, leading to increased demand from better-financed buyers [5][6] - The rise in credit scores suggests that homebuyers with lower credit ratings may face challenges in obtaining mortgages, as lenders focus on limiting risk [4][6] - The shift to higher credit scores is attributed to the profile of borrowers entering the market, particularly those refinancing or purchasing homes as rates improve [7]