5 months ago
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Mortgage credit availability saw a slight increase in May, according to an analysis of ICE Mortgage Technology data by the Mortgage Bankers Association (MBA).
The Mortgage Credit Availability Index (MCAI) rose by 0.1% to 94.1 in May. The index was initially benchmarked to 100 in 2012. The MCAI measures how tight or loose lending standards are in any given month. A reduction in the MCAI indicates a tightening of lending standards, while increases indicate the loosening of credit.
“The Conventional MCAI increased 0.3 percent, while the Government MCAI decreased by 0.1 percent,” MBA explained. “Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 0.1 percent, and the Conforming MCAI rose by 0.5 percent.”
The increase marked the fifth consecutive month that mortgage credit availability has grown, according to Joel Kan, MBA vice president and deputy chief economist. But this is also impacted by the state of the market, as lenders react to challenges related to high interest rates and limited inventory that have impacted borrower engagement.
“The industry has reduced capacity over the past two years in response to extremely low unit volumes,” Kan said in a statement. “Conventional, conforming, and jumbo credit availability have expanded slightly in recent months as lenders broaden loan offerings to reach more potential homebuyers in a tight purchase market.”
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