Mortgage credit availability finally bounced back after months of record lows, as the job market improved, and robust borrower demand continued to buoy the housing sector, according to the Mortgage Bankers Association.
The MBA’s Mortgage Credit Availability Index (MCAI) posted a 0.7% month-over-month gain in November, up to a five-month high of 122.2. The increase indicates that lenders are loosening their credit standards.
“Home purchase and refinance activity have remained strong in recent months, and the increased credit supply should help qualified borrowers still looking to capitalize on record-low mortgage rates,” said Joel Kan, associate vice president of economic and industry forecasting at MBA. “However, credit availability is still more than 30% below pre-pandemic levels and close to the restricted standards seen in 2014. This has especially impacted government borrowers and first-time buyers.”
MCAI component indices
The Conventional MCAI climbed 1.3%, while the government MCAI inched up 0.3% in November. Of the component indices of the Conventional MCAI, the Jumbo MCAI rose by 1.6%, and the conforming MCAI increased by 0.9%.
“There was an increase in credit availability for jumbo loans, as well as loan products with low credit scores, higher LTVs, and adjustable-rate features,” Kan said.