Mortgage Credit Availability Increases for Third Consecutive Month in September

The Mortgage Banker Association (MBA) today (10-12-21) released their Mortgage Credit Availability Index (MCAI), which analyzes data from Ellie Mae’s AllRegs® Market Clarity® business information tool, for September. According to the MBA, the MCAI rose 1.5% to 125.6 in September.

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 by -0.7%. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 5.8%, and the Conforming MCAI rose by 2.6%.

In a statement prepared for the release of the MCAI, Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said, “Mortgage credit availability grew for the third straight month in September, reaching its highest level since May 2021. Last month’s expansion was driven by a 4.5 percent increase in the conventional index, while the government index slightly decreased. Even with increases in seven out of nine months thus far in 2021, total credit availability is still around 30 percent less than it was in February 2020 before the pandemic.”

Kan added, “We are still seeing 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 percent 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 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.”