The availability of mortgage credit increased in March, opening the mortgage market to more borrowers. This was due to an improving economy and a recovery in the labor market.
The mortgage market is opening up and the availability of mortgage credit is increasing due to the recovering labor market and the recovering economy.
The Mortgage Bankers Association Availability index for mortgage loans rose in March by 0.6 percent to 125.4.
A decline in the MCAI suggests that lending standards are tightening, while a rise in the index indicates that credit is easing. The index was rated 100 in March 2012.
Broken down by loan type, the conventional MCAI rose 0.8 percent while the state MCAI rose 0.4 percent. Of the component indices of the conventional MCAI, the jumbo MCAI rose 1.5 percent and the compliant MCAI rose 0.2 percent.
“Loan availability increased significantly in March as the economy and labor market continued to recover,” said Joel Kan, vice president of economic and industrial forecasting for MBA. “This has increased the number of low credit, high LTV products. All of the market segments covered by our sub-indices increased over the course of the month, especially the government and jumbo indices. The government index, which includes FHA, VA and RHS mortgages, rose for the sixth time in seven months to its highest level in a year.
“When we look at the expected growth in the shopping market, which is being driven by millennials and first-time home buyers, the availability of credit to qualified borrowers will play an important role in supporting that demand,” Kan said.
“Jumbo loan supply rose for the sixth straight month, a strong rebound after many lenders withdrew at the start of the pandemic in the first half of 2020. Jumbo availability is rising again as the economy regains its foothold and coincides with strong home demand and accelerated home price growth in many markets. “
Minutes released Wednesday by the Federal Reserve’s March meeting of the Federal Open Markets Committee (FOMC) showed that there is one Expectation for stronger economic recovery in the months and years to come.
During its meeting, the FOMC noted that the economy has rebounded significantly in recent months, including GDP. employment, Wages and more, however, has not yet reached pre-pandemic levels.