The decrease in the willingness of banks to make loans to home buyers

I agree that the answer is D .
I would like to know if option B is correct if it was (B) is creating instead of (B) are creating
IMO Continuous tense is correct .Please correct me if I am wrong .

Shortly the answer is NO

you use the Present Continuous with Normal Verbs to express the idea that something is happening now, at this very moment. It can also be used to show that something is not happening now.

Instead, you do use the Present Perfect to talk about change that has happened over a period of time. Logically, here, we need a verb that expresses that the timeline has yet to finish. Beginning in a certain moment in the past and it is still going.

Hope is clear

Straight D - has created

Correct form for Subject Verb agreement

Dear VeritasPrepBrian AnthonyRitz IanStewart GMATGuruNY,

Why is choice E. wrong?

According to Veritas SC book Q30's solution:
However, choice E. which is present simple tense also fits this explanation as well.
How to eliminate choice E. then?

Typos in explanation: It should say that "logically you want a verb that expresses that timeline that this event began and has yet to finish." (The correction is important, because the corrected explanation makes clear that our action does not exist strictly in the present.)

In particular, this verb needs to express something that began in the past, rather than just occurring at this moment. Logically, it's not like the banks become less willing to lend (all exactly at the same present moment) and, at the same present moment, all of those described effects happen.

Furthermore, there is strong implication that this is a process, rather than a momentary occurrence.

Finally, the use of the present "creates" in this context actually, believe it or not, doesn't really seem to convey that this "creating" is actually happening right now. That's because (and I'm getting way too technical here, but you seem to want to dig into every technicality, so here we are) it appears in this usage to be the gnomic aspect -- expressing a general truth rather than a specific occurrence. Example: "I swim in that pool." It's a general truth, but certainly not something I'm purporting to be doing at the moment of making that statement.

And that might be a plausible reading of the phrase "the decrease creates" -- that it's just trying to express a general truth -- except that our sentence then switches to present continuous ("are plummeting," "are avoiding"), and that tense is not generally used in a gnomic sense in English. So this verb form is incorrect for this reason as well.

Thank you for point this out. I've corrected the explanation in my post