Mortgage Credit Availability Increased Slightly in October

The Mortgage Banker Association (MBA) today (11-9-21) released their Mortgage Credit Availability Index (MCAI), which analyzes data from Ellie Mae’s AllRegs® Market Clarity® business information tool, for October. According to the MBA, the MCAI rose 0.1% to 125.7.6 in October.

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 increased 0.1%, while the Government MCAI was unchanged. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 4.1%, and the Conforming MCAI declined by -6.0%.

In a statement prepared for the release of the MCAI, Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said, “Credit availability inched forward in October, but the overall index was 30 percent lower than February 2020 and close to the lowest supply of mortgage credit since 2014. Within the sub-indexes, a 4 percent increase in the jumbo index was essentially offset by a 6 percent drop in the conforming index. There was an increase in the supply of jumbo ARM and non-QM products, which drove most of the increase in the jumbo index. On the conforming side, there was a pullback in ARMs, higher LTV loans, and lower credit score products. While there is tightening in ARM credit availability both for jumbo and conforming loans, ARM loans have accounted for a small share of loan applications, ranging from 2.5 percent to 5 percent of applications to date in 2021.”

“Tight credit availability, combined with ongoing supply and affordability challenges, are significant obstacles for some prospective first-time buyers,” Kan added.