Mortgage Credit Availability Increases in July
Mortgage credit availability rose in July, driven in part by improved government mortgage availability.
That’s according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) that analyzes data from ICE Mortgage Technology.
According to the MBA, the MCAI rose by 2.5% to 108.4 in July. The MBA said that a decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.
“Credit availability in June increased to its highest level since July 2022, as greater availability and expanded guidelines for ARM and streamline refinance loans, including some with lower documentation requirements, drove most of the increase,” said Joel Kan, CMB, MBA’s Vice President and Deputy Chief Economist. “Jumbo credit availability has grown in almost every month this year and this month’s increase brought the jumbo index to its highest level since 2020. Additionally, non-QM loan programs continue to account for a substantial share of this growth.”
The improvement in government mortgage availability was particularly important because government programs had been a drag on the index in June. In June, the Government MCAI fell 4.6%, as lenders pulled back on FHA and VA streamline refinance programs, particularly for high-LTV and lower-credit-score borrowers.
The index was benchmarked to 100 in March 2012, the MBA noted.
It said the Conventional MCAI increased 3%, while the Government MCAI increased by 1.8%. Of the component indices of the Conventional MCAI, the Jumbo MCAI rose by 4.2%, and the Conforming MCAI fell by 0.2%.
The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit.
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