This Is Not 2008 All Over Again

Dated: 11/14/2019

Views: 91

This is Not 2008 All Over Again: The Mortgage Lending Factor

This is Not 2008 All Over Again: The Mortgage Lending Factor


Some are afraid the real estate market may be looking a lot like it did prior to the housing crash in 2008. One of the factors they’re pointing at is the availability of mortgage money. Recent articles about the availability of low-down payment loans and down payment assistance programs are causing concern that we’re returning to the bad habits of a decade ago. Let’s alleviate the fears about the current mortgage market.

The Mortgage Bankers’ Association releases an index several times a year titled: The Mortgage Credit Availability Index (MCAI). According to their website:

“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is…a summary measure which indicates the availability of mortgage credit at a point in time.”

Basically, the index determines how easy it is to get a mortgage. The higher the index, the more available the mortgage credit.

Here is a graph of the MCAI dating back to 2004, when the data first became available:This is Not 2008 All Over Again: The Mortgage Lending Factor | Keeping Current MattersAs we can see, the index stood at about 400 in 2004. Mortgage credit became more available as the housing market heated up, and then the index passed 850 in 2006. When the real estate market crashed, so did the MCAI (to below 100), as mortgage money became almost impossible to secure.

Thankfully, lending standards have eased since. The index, however, is still below 200, which is half of what it was before things got out of control.

Bottom Line

It is easier to get a mortgage today than it was immediately after the market crash, but it is still difficult. The difference in 2006? At that time, it was difficult not to get a mortgage.

Blog author image

Bevia Patrick

Since its inception in 1995, Patrick Team Properties has exemplified a profound commitment to its clients by providing the highest standard of service, integrity and work ethic in the field. Patri....

Latest Blog Posts

The Overlooked Financial Advantages Of Homeownership

The Overlooked Financial Advantages of HomeownershipThere are many clear financial benefits to owning a home: increasing equity, building net worth, growing appreciation, and more. If you’re a

Read More

Where Have All The Houses Disappeared To

Where Have All the Houses Disappeared To?If you’re following what’s happening in the current housing market, you’ve seen how the lack of newly constructed homes is a major reason there’s a

Read More

SHOULD I SELL MY HOUSE THIS YEAR

Should I Sell My House This Year?If one of the questions you’re asking yourself today is, “Should I sell my house this year?” the current Housing Opportunities and Market

Read More

FirstTime Buyers Are Searching For Existing Homes

First-Time Buyers Are Searching for Existing Homes This Year In the latest Housing Trends Report, the National Association of Home Builders (NAHB) measured the share of

Read More