Mortgage Credit Becoming More Available

Newly released data shows that mortgage credit availability increased in August, meaning it got a little easier to get a mortgage last month.

According to the new report from the Mortgage Bankers Association, the Mortgage Credit Availability Index rose by 3.9% in August, indicating that credit standards loosened slightly.

The report shows that most of the increase was seen in Conventional mortgages, which saw credit availability increase by 7.6%. Of the two components that make up the Conventional segment, Jumbo and Conforming, Jumbo saw the larger increase.

According to the report, Jumbo mortgage credit increased by 9.4% in August, rising to the highest level of availability since March 2020. Meanwhile, Conforming mortgage credit rose by 5.1%.

"Credit availability increased in August, driven by significant activity across all indexes," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "This expansion was heavily driven by the addition of refinance loan programs at a time when the 30-year fixed rate has been above 3% for the past month, and refinance activity has trended lower.”

Kan noted that the increase in Conforming mortgage credit availability came from more lenders offering GSE refinance programs designed to help “lower-income borrowers” decrease their interest rates and monthly payments.

Beyond that, there was also a “slight expansion” in Government credit, with more investors offering streamline refinance programs for FHA and VA loans.