Mortgage Credit Availability Increased in August – NMP Skip to main content

Mortgage Credit Availability Increased in August

David Krechevsky
Sep 09, 2021

Index Posts Second Consecutive Monthly Increase

KEY TAKEAWAYS
  • The MBA’s monthly Mortgage Credit Availability Index rose by 3.9% to 123.7 in August, following July’s 0.3% increase in the index to 119.1
  • Economist says credit expansion was heavily driven by the addition of refinance loan programs at a time when the 30-year fixed rate has been above 3% for the past month, and refinance activity has trended lower.

Mortgage credit availability increased in August for the second consecutive month, the Mortgage Bankers Association said today.

The MBA’s monthly Mortgage Credit Availability Index (MCAI) rose by 3.9% to 123.7 in August. That followed July’s 0.3% increase in the index to 119.1

Increases in the index indicate loosening credit, while a decline in the MCAI indicates that lending standards are tightening. The index was benchmarked to 100 in March 2012.

The Conventional MCAI increased 7.6%, while the Government MCAI increased by 1.1%. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 9.4% and the Conforming MCAI rose by 5.1%. 

"Credit availability increased in August, driven by significant activity across all indexes," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "This expansion was heavily driven by the addition of refinance loan programs at a time when the 30-year fixed rate has been above 3% for the past month, and refinance activity has trended lower.”

He noted that the 9% increase in jumbo credit raised its availability to “its highest level since March 2020, as more non-QM jumbo and agency-eligible high-balance loan programs were offered.”

As for conforming loans, Kan said, “more lenders offered GSE refinance programs catered to lower-income borrowers to help reduce their rates and payments. There was also a slight expansion in government credit, as more investors offered streamline refinance options for FHA and VA loans."

The MCAI provides the only standardized quantitative index solely focused on mortgage credit.  It is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.). These metrics and underwriting criteria for over 95 lenders/investors are combined by MBA using data made available via the AllRegs Market Clarity product and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time.  Base period and values for total index is March 31, 2012=100; Conventional March 31, 2012=73.5; Government March 31, 2012=183.5.

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