Mortgage Credit Availability Improves in January

On Friday, the Mortgage Bankers Association’s (MBA) released its Mortgage Credit Availability Index (MCAI) report for January. According to the MCAI, which analyzes data from ICE Mortgage Technology, mortgage credit availability increased in January.

The MCAI increased by 0.7% to a reading of 92.7 in January, reversing two consecutive months of declining availability. The MBA notes that a decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012.

The Conventional MCAI rose 1.3%, while the Government MCAI was unchanged from December. Of the component indices the Conventional MCAI, the Jumbo MCAI increased by 1.9%, and the Conforming MCAI inched 0.2% higher.

In remarks accompanying the results of the January MCAI report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“There was a slight increase in credit availability in January, driven by a greater number of conventional loan program offerings. However, overall credit availability remained close to 2012 lows, and the conventional index was close to its record low in the series dating back to 2011. Even though there was an increase in cash-out refinance programs available, credit supply overall is tight. The challenging lending environment has pushed many lenders to reduce costs by cutting back on certain aspects of their business, including exiting origination channels, which has contributed to lower credit supply.”