Mortgage credit availability increased in September, according to the Mortgage Banker Association’s Mortgage 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 intelligence tool. A drop in the MCAI indicates that lending standards are tightening, while increases in the index indicate sagging credit. The index was benchmarked at 100 in March 2012.
The conventional MCAI increased by 4.5%, while the government MCAI decreased by 0.7%. Among the indices making up the conventional MCAI, the Jumbo MCAI increased by 5.8% and the Conforming MCAI increased by 2.6%.
“Mortgage credit availability increased for the third consecutive month in September, reaching its highest level since May 2021,” said Joel Kan, associate vice president of economic and industrial forecasting at MBA. “Last month’s expansion was driven by a 4.5% increase in the conventional index, while the government index edged down.”
Kan added that “Even with increases in the seven out of nine months so far in 2021, total credit availability is still around 30% lower than it was in February 2020, before the pandemic. ”
Kan said the housing market continues to have “high rates of home price appreciation, and lenders are responding by offering a wider range of loans to accommodate qualified buyers.”
The availability of jumbo credit has increased by almost 6%, he said, to its highest level since March 2020, “with more loan programs for non-QM jumbos and loans aimed at independent borrowers or to those with non-traditional sources of income “.
The compliance index, he said, showed a greater supply of loans for cash refinances, investor properties and variable rate mortgages (ARMs). “Even as mortgage rates continue to rise, cash refinances remain an option for borrowers who have sufficient home equity and need additional cash. “