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Mortgage Credit Availability Rebounds

Mortgage credit availability increased in August according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) that analyzes data from ICE Mortgage Technology.

The slight rise in August's share of credit availability comes after mortgage credit availability decreased significantly in July. Lenders pulled back on underutilized loan programs, resulting in the lowest level of credit availability recorded since 2013.

Despite record low levels the month prior, the MCAI rose by 0.3% to 96.6 in August. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.

 “Credit availability in August increased slightly but remained close to the very low levels last seen in January 2013,” said Joel Kan, MBA’s VP and Deputy Chief Economist. “The overall increase was driven by an increased number of loan programs that included parameters such as cash-out refinances and mid-range credit scores. The conforming index dropped to its lowest level since 2011, while the jumbo index increased after three monthly declines.”

The report also revealed that the MCAI index was benchmarked to 100 in March 2012. The Conventional MCAI increased 0.6%, while the Government MCAI was unchanged. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 2.7%, and the Conforming MCAI fell by 2.7%.

“Industry capacity continues to decline as lenders reduce staffing and simplify their product offerings to reduce costs and raise profitability," said Kan. "While this dynamic has led to lower credit availability, it has also provided some lenders with new opportunities to expand some of their product offerings, and we saw some of that growth in the jumbo space last month.”

To read the full release, click here.

About Author: Demetria Lester

Demetria C. Lester is a reporter for DS News and MReport magazines with more than eight years of writing experience. She has served as content coordinator and copy editor for the Los Angeles Daily News and the Orange County Register, in addition to 11 other Southern California publications. A former editor-in-chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington, she has covered events such as the Byron Nelson and Pac-12 Conferences, progressing into her freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, Lester is an avid jazz lover and likes to read. She can be reached at [email protected].

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