Mortgage credit availability increased for the second consecutive month in August, the Mortgage Bankers Association said today.
The MBA’s monthly Mortgage Credit Availability Index (MCAI) rose 3.9% to 123.7 in August. This was followed by a 0.3% increase in the index in July to 119.1
Rises in the index indicate easing in lending, while falls in the MCAI indicate tightening of lending standards. The index was rated at 100 in March 2012.
The conventional MCAI rose 7.6% while the state MCAI rose 1.1%. Of the component indices of the conventional MCAI, the jumbo MCAI rose by 9.4% and the conforming MCAI by 5.1%.
“Credit availability increased in August, driven by significant activity across all indices,” said Joel Kan, associate vice president of economic and industry forecasting for MBA. “This expansion was largely driven by the addition of refinancing loan programs at a time when the 30-year fixed rate was above 3% last month and refinancing activity was declining.”
He found that the 9% increase in jumbo loans increased availability to “its highest level since March 2020 as more non-QM jumbo and agency-eligible high-balance loan programs became available”.
On compliant lending, Kan said, “More lenders were offering GSE refinance programs targeting lower-income borrowers to lower their interest rates and payments. There was also a slight expansion in government lending as more investors offered more streamlined refinancing options for FHA and VA loans. “
The MCAI offers the only standardized quantitative index that focuses solely on mortgage credit. It is calculated based on several factors related to the borrower’s creditworthiness (credit rating, type of credit, loan-to-value ratio, etc.). These metrics and underwriting criteria for over 95 lenders / investors are combined by the MBA using data provided through the AllRegs Market Clarity product and a proprietary formula derived from the MBA to calculate the MCAI, a summary metric that indicates the availability of mortgage credit at any given time in a timely manner. The base period and values for the overall index are March 31, 2012 = 100; Conventional March 31, 2012 = 73.5; Government March 31, 2012 = 183.5.