For the third straight month, more people are gaining access to mortgage credit according to a new report from the Mortgage Bankers Association (MBA). The index measures overall credit availability and reached its highest level since May even as that metric remains far below pre-pandemic levels.
“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,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting.
The loosening of credit can be attributed to conventional loans, which saw an increase of 4.5% in September according to the report. Government credit, which has remained steadier over the past several months, fell 0.7% last month.
Jumbo credit—loans for properties too expensive for conventional lenders—actually reached its highest level since March of 2020 after jumping 5.8%, according to the report, as creditors have found ways to accommodate self-employed borrowers and those with non-traditional sources of income, according to the report.
The Big Picture
MBA’s credit index, which was created in the wake of the housing crisis a decade ago, uses a variety of data points to measure how easy it is for borrowers to receive a mortgage loan, drawing on credit scores, loan type and other underwriting criteria. Set to a baseline of 100, the index topped 185 in early 2020 before plummeting at the onset of the pandemic. It currently stands at 125.6.
Jesse Williams is RISMedia’s associate online editor. Email him your real estate news ideas to jwilliams@rismedia.com.
