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It is stronger than a pre-qualification and weaker than a final approval. Here is the difference and why it matters.
Pre-qualification is a quick estimate based on what you tell a lender. Pre-approval means the lender reviewed documents such as pay stubs and credit. Final approval comes after the property is appraised and underwriting is done.
A pre-approval letter signals that your offer is serious and that you can probably close. In a competitive market it may be the difference between a conversation and silence.
Changing jobs, opening credit cards or making large purchases before closing can disrupt an approval. Check with your lender before you do anything financial and unusual.