Mortgage market shows rising loan volumes amid increasing credit tightness

The mortgage market is currently exhibiting conflicting trends. Data from the Consumer Financial Protection Bureau (CFPB) shows that mortgage originations rose significantly, with 404,682 new mortgages recorded in February 2026, a 35.4% increase from the previous year. However, this rise in volume does not indicate easier access to credit.

Despite higher lending activity, credit tightness is increasing. The CFPB’s credit tightness index, which measures the ratio of inquiries to new loans adjusted for applicant credit profiles, showed a 5.6% year-over-year increase in March 2026. This suggests that while more loans are being closed, the approval process remains demanding for many borrowers.

In response to shifting market dynamics, industry experts are identifying new growth sectors. Jonathan Scarpati, chief production officer at Finance of America, noted that the aging homeowner market represents a major opportunity. With homeowners aged 55 and older holding approximately $15 trillion in home equity, reverse mortgages are being highlighted as a way for seniors on fixed incomes to access wealth without monthly principal and interest payments.