Mortgage Application Activity and Credit Availability Record Upticks

Two new data reports from the Mortgage Bankers Association (MBA) pointed to positive developments in the home loan market.

The Market Composite Index, the MBA’s measure of mortgage loan application volume, increased 1.4% on a seasonally adjusted basis in the week ending Sept. 6 compared to the previous week earlier.  On an unadjusted basis, however, the index dropped 10%.

The seasonally adjusted Purchase Index increased 2% week-over-week while the unadjusted index decreased 10% – the latter was also 3% lower than the same week one year ago. The Refinance Index increased 1% from the previous week and was 106% higher than the same week one year ago. The refinance share of mortgage activity increased to 46.7% of total applications from 46.4% the previous week.

Among the federal programs, the FHA share of total applications increased to 14.7% from 14.6% the week prior while the VA share of total applications decreased to 16.4% from 16.7% and the USDA share of total applications remained unchanged at 0.4%.

Separately, the MBA’s Mortgage Credit Availability Index (MCAI) recorded an uptick in August with a 0.9% increase to a reading of 99.0; the index was benchmarked to 100 in March 2012. The Conventional MCAI increased 1.8% while the Government MCAI was unchanged. Of the component indices of the Conventional MCAI, the Jumbo MCAI was up by 1.5% and the Conforming MCAI rose by 2.6%.

“Credit availability increased in August, with the conventional credit index reaching its highest level since July 2022. This was driven by increased cash-out refinance and non-QM programs,” said Joel Kan, MBA’s vice president and deputy chief economist. “Additionally, the jumbo index increased for the eighth consecutive month to its highest level since 2022. Mortgage rates have been on the decline since May 2024, prompting a pickup in refinance activity, which remains limited to a smaller segment of homeowners with higher rates. As a result, the increase in credit availability was the result of lenders broadening their refinance offerings to meet the greater demand.”