Mortgage Credit Availability Increases for Third Straight Month

Those seeking a mortgage found it was a little easier to get in September than it was in August, as newly released data showed that mortgage credit availability increased in September.

That marks the third straight month that it’s gotten easier to get a mortgage.

The information comes from a new report from the Mortgage Bankers Association, which shows that mortgage credit availability increased by 1.5% in September. Credit availability also increased in July and August.

According to the report, the increase was driven by the Conventional segment, which saw credit availability increase by 4.5%. Of the two components that make up the Conventional segment, Jumbo and Conforming, Jumbo saw the larger increase.

Per the report, Jumbo mortgage credit availability increased by 5.8%, while Conforming availability rose by 2.6%.

The increase seen in September was enough to push mortgage credit availability to its highest level since May 2021, according to 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 said. “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."

However, Kan states that lenders appear to be responding to housing market conditions.

"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,” Kan said.

“Jumbo credit availability increased almost 6% 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,” Kan continued.

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