Credit Availability Ticked Up In December

Mortgage credit availability grew slightly in December 2021, increasing by 0.8% to 125.9, according to the Mortgage Banker Association’s (MBA) Mortgage Credit Availability Index (MCAI).

The Conventional MCAI rose by 0.8%% while the Government MCAI rose by 0.7%. Within the Conventional MCAI, the Jumbo MCAI rose by 0.6% and the Conforming MCAI rose by 1.1%.

A decline in the MCAI indicates that lending standards are tightening, while an increase indicates loosening credit. The index was benchmarked to 100 in March 2012.

The overall credit index rose to its highest point since May 2021. However, it remains 30% below its pre-pandemic level.

The increase puts mortgage credit availability back on a positive trajectory after a November decline that interrupted a four-month period of growth.

“December’s growth was driven by more ARM and lower credit score loan programs, which was likely due to a combination of the rising rate environment and affordability challenges. Lenders expanded offerings to qualified borrowers who were the most impacted by these market conditions. Additionally, there was an increase in government streamline refinance programs to aid borrowers still looking to refinance before rates rise even more,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. 

“The overall supply of mortgage credit only grew around 3% compared to the same month a year ago, with a 34% increase in jumbo credit availability contributing to most of that growth. Government credit supply, as well as conforming credit, saw tightening last year.”

Credit availability is critical to homebuyers are home prices and interest rates continue climbing. This is especially true for first-time homebuyers who rely on government mortgage programs.

Industry experts expect home prices to continue growing in 2022, though at a slower pace than 2021’s record-breaking frenzy. The Mortgage Bankers Association has predicted that purchase mortgage originations will grow 9% in 2022 to $1.73 trillion. 

“Affordability challenges will keep prices from advancing at the same pace we saw in 2021 even as ongoing supply-demand dynamics mean prices continue to grow nationwide,” Danielle Hale, chief economist at, told the Washington Post.

She predicts 2022 will have the second-highest home sales of the last 15 years, just behind 2021.