As the impact of COVID-19 has driven rates down, it has also crippled the economy, sent unemployment skyrocketing, and altered the residential lending landscape.

Despite the fact that interest rates have been at or near record lows for more than a month, millions of potential borrowers are facing a situation where it’s simultaneously never been a better time to buy a home and never been harder to get a home loan; a true catch-22. Ironically, the cause of both the record low interest rates and certain borrowers’ powerlessness to take advantage of those rates is the same thing: the coronavirus. Even as the impact of COVID-19 has driven rates down, the virus has also crippled the U.S. economy, sent unemployment skyrocketing, and altered the residential lending landscape so deeply that it may take years to recover. That’s leading to millions of would-be borrowers being left behind thanks to a brutal combination of factors that’s making it nearly impossible for them to get a loan, even if they want and could get one otherwise. As the virus crisis worsened, numerous lenders raised their lending standards, thereby limiting the types of borrowers they’d lend to, because they were trying to protect against lending to borrowers who were either about to or just had lost their jobs.

Source: HousingWire