US Mortgage Credit Availability Index Rises in October

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

The MCAI increased 2.3% to a reading of 106.8. A decline in the MCAI indicates tighter lending standards, while increases indicate looser credit. The index is benchmarked to 100 in March 2012.

The Conventional MCAI increased 4.1% in October, while the Government MCAI edged up 0.1%. Within the Conventional MCAI, the Jumbo MCAI rose 5.0%, and the Conforming MCAI increased 2.0%.

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

“Credit availability in October rose to its highest level since 2022 as investors broadened their loan offerings over the month. The increase was driven by growth in conventional mortgage credit availability, while government credit supply changed little. A greater number of ARM and cash-out refinance loan programs contributed to credit supply growth, although the programs were mostly limited to higher credit score borrowers. A steeper yield curve, leading to a bigger differential between fixed-rate mortgage rates in comparison to ARM loan rates, has increased the popularity of ARMs in recent months. Additionally, more non-QM programs supplemented the increase in the jumbo index to its highest level since 2020.”