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Mortgage Credit Availability Rose In September

Oct 15, 2021
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MBA's Mortgage Credit Availability Index rose 1.5% last month, the third consecutive monthly increase.

KEY TAKEAWAYS
  • Even with increases in seven out of nine months thus far in 2021, total credit availability is still around 30% less than it was in February 2020, before the pandemic.

Mortgage credit availability increased in September, according to the Mortgage Banker Association’s Mortgage Credit Availability Index (MCAI).

The MCAI rose 1.5% to 125.6 in September, the MBA said. The report analyzes data from Ellie Mae's AllRegs Market Clarity business information tool. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012.

The Conventional MCAI increased 4.5%, while the Government MCAI decreased 0.7%. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased 5.8%, and the Conforming MCAI rose by 2.6%. 

"Mortgage credit availability grew for the third straight month in September, reaching its highest level since May 2021," said Joel Kan, MBA's associate vice president of economic and industry forecasting. "Last month's expansion was driven by a 4.5% increase in the conventional index, while the government index slightly decreased.”

Kan added that, “Even with increases in seven out of nine months thus far in 2021, total credit availability is still around 30% less than it was in February 2020, before the pandemic." 

Kan said the housing market continues to have “elevated rates of home-price appreciation, and lenders are responding by offering a wider range of loans to accommodate qualified buyers.”

Jumbo credit availability increased almost 6%, he said, to its highest level since March 2020, “with more loan programs for non-QM jumbos and loans catering to self-employed borrowers or those with non-traditional sources of income.”

The conforming index, he said, indicated a greater supply of loans for cash-out refinances, investor properties, and adjustable-rate mortgages (ARMs). “Even as mortgage rates continue to rise, cash-out refinances remain an option for borrowers who have sufficient home equity and need additional cash."

About the author
David Krechevsky was an editor at NMP.
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