US Mortgage Credit Availability Index Rises in May

On Tuesday, the Mortgage Bankers Association (MBA) reported that mortgage credit availability rose in May, according to its Mortgage Credit Availability Index (MCAI).

The MCAI increased 0.1% to a reading of 108.0. A decline in the MCAI indicates tighter lending standards, while increases indicate looser credit. The index was benchmarked to 100 in March 2012.

The Conventional MCAI rose 0.2%, while the Government MCAI was unchanged. Within the Conventional MCAI, the Jumbo MCAI rose 0.3%, and the Conforming MCAI was unchanged.

Commenting on the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Mortgage credit availability in May stayed close to the previous month’s levels. Mortgage rates reached nine-month highs over the month, which put pressure on homebuyers and reduced the demand for refinancing. Given the economic uncertainty and rate volatility, lenders held their loan program offerings fairly stable, although based on the subindexes, jumbo credit availability increased slightly over the month. The jumbo index increased 0.3%, with most of the increase coming from ARM loan offerings.”