Low interest rates and a slowing refi market has pushed mortgage credit availability to a pre-pandemic high, according to a report from the Mortgage Bankers Association (MBA).
MBA’s Mortgage Credit Availability Index (MCAI) increased by 1.4% to 129.9 in May, indicating that lenders are loosening credit standards. The index was benchmarked to 100 in March 2012.
“Mortgage credit availability in May increased to its highest level since near the start of the pandemic but still remained at 2014 levels. The increase was driven by a 3% gain in the conventional segment of the market, with a rise in the supply of ARMs and cash-out refinances. This is consistent with the uptick in mortgage rates and a slowing refinance market, as well as MBA’s weekly applications survey data showing increased interest in ARMs,” said Joel Kan, associate vice president of economic and industry forecasting at MBA.