With interest rates hovering well below historical levels for much of the year, it’s also getting a little easier for borrowers to get a mortgage.
According to a new report from the Mortgage Bankers Association, mortgage credit availability increased in May, meaning that getting a mortgage was easier to do in May than it was in April.
Much of the increase came in the Conventional mortgage segment, which increased while the Government segment decreased slightly.
According to Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting, mortgage credit availability in May rose to the highest level since the beginning of the pandemic, when credit availability decreased substantially.
“The increase was driven by a 3% gain in the conventional segment of the market, with a rise in the supply of ARMs and cash-out refinances. This is consistent with the uptick in mortgage rates and a slowing refinance market, as well as MBA's Weekly Applications Survey data showing increased interest in ARMs," Kan said.
"The jumbo index jumped 5% last month, but even with increases over the past two months, the index is still around half of where it was in February 2020,” Kan added.
“A rapidly improving economy and job market has freed up jumbo credit, as banks have deposits to utilize,” Kan continued. “However, there is still plenty of restraint, as many sectors have not fully returned to pre-pandemic capacity, and there are around 2 million borrowers still in forbearance."
According to MBA’s data, mortgage credit availability has increased steadily since around August 2020.