Mortgage Credit Availability Rises in November—First Increase in Nine Months

According to the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI), which analyzes data from ICE Mortgage Technology, mortgage credit availability increased for the first time in nine months in November.

The MCAI rose by 1.4% to a reading of 103.4 in November. 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 increased 2.8%, while the Government MCAI remained unchanged. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 3.9, while the Conforming MCAI rose 1.0%.

Providing additional background and his analysis to the MCAI for October, MBA’s Vice President and Deputy Chief Economist Joel Kan said:

“Credit availability increased slightly in November, the first increase in nine months as lenders continued to navigate a challenging environment brought on by higher rates and a much slower housing market. Jumbo credit availability saw a 4 percent increase, as jumbo rates remained more competitive than rates on conforming loans. Lenders are seeking to capture more volume in this space. Most of last month’s increase came from more ARM loan programs being offered.”