Mortgage Credit Availability Jumps to Highest Level in More Than 2 Years

The increase came while mortgage rates remained elevated above the 6.5 percent level.

A trailer park home community sign in Duncansville, Pa., on March 12, 2025. Madalina Vasiliu/The Epoch Times

More mortgage funds were made available in the housing market last month than in the previous month, with refinance programs driving the growth, according to the Mortgage Bankers Association (MBA).

The Mortgage Credit Availability Index, which measures the supply of mortgage credit at a specific point in time, “rose by 2.5 percent to 102.9 in March” from February, MBA said in an April 8 statement. A jump in the index is an indication of relaxing credit conditions.

Joel Kan, MBA’s vice president, said the credit availability has now risen to its highest level since January 2023. He attributed this increase to “growth in cash-out refinance programs, as recent mortgage rate volatility has opened the door for some borrowers to refinance.”

A cash-out refinance allows a homeowner to take a larger mortgage loan on their home, use it to pay off the existing mortgage, and keep the rest for themselves.

“The credit supply growth was primarily in conventional programs, with jumbo availability at its highest in five years,” Kan said.

A conventional loan is a mortgage that falls within the loan limits set by the Federal Housing Finance Agency, whereas a jumbo loan exceeds these limits.

Even though mortgage credit availability improved last month, overall mortgage applications have not fared well. For the latest week ending March 28, applications fell by 1.6 percent.

The weak overall application numbers come amid mortgage rates remaining elevated. The average weekly rate of a 30-year fixed-rate mortgage has been hovering above 6.5 percent since mid-October.

On the plus side, mortgage applications to buy homes are at the highest level since the end of January, Kan said.

“Overall purchase activity has shown year-over-year growth for more than two months as the inventory of existing homes for sale continues to increase, a positive development for the housing market despite the uncertain near-term outlook,” he said.

Real estate marketplace Zillow said predicting the path of mortgage rates at present with any conviction is difficult.

“Over the medium term, absent additional softness in data, Zillow expects mortgage rates to end the year near mid-6 percent,” it said.

Burdened By Regulations

During a recent testimony before Congress, Buddy Hughes, chairman of the National Association of Home Builders (NAHB), called for eliminating excessive regulations to ease the housing affordability crisis facing the United States.

He argued that the residential construction sector is one of the most regulated industries in the country and that excessive rules are affecting the efforts of home developers attempting to resolve the housing crisis.

“Regulatory costs, which include complying with building codes, zoning issues, permitting roadblocks, and other costly challenges, make up nearly 25 percent of the cost of building a single-family home and more than 40 percent of the cost of a typical apartment,” Hughes said. “Congress and the Trump administration must look for ways to reform the regulatory rulemaking process while also eliminating excessive or unnecessary regulations so that more Americans can achieve homeownership and have more affordable rental options.”

According to a March 10 report from real estate listing website Realtor, America’s housing supply gap stood at 3.8 million units last year, the third biggest annual figure since 2012.

“At a 2024 rate of construction relative to household formations and pent-up demand, it would take 7.5 years to close the housing gap,” the report said.

The company blamed real estate zoning rules and other housing restrictions for the situation, saying that these regulations limit the extent to which new construction could have alleviated the supply crisis.

The report called building new homes a win for the housing market, which would especially help young households.

“More home supply means lower prices, which can bring higher home sales,” it said.

Last month, Interior Secretary Doug Burgum and Housing and Urban Development Secretary Scott Turner announced a joint task force that aims to use underutilized federal lands that are deemed suitable for housing to boost supply in the market and bring down costs.

In a March 17 post on social media platform X, Turner said that the country needs 7 million affordable homes, while highlighting that 20 percent of the United States’ landmass is under the ownership of the Department of the Interior.