US Mortgage Credit Availability Index Rises in October

On Tuesday, the Mortgage Bankers Association (MBA) reported that mortgage credit availability increased in October, following two consecutive months of declines, according to its Mortgage Credit Availability Index (MCAI), which analyzes data from ICE Mortgage Technology.

The MCAI rose 0.4% to a reading of 107.5. 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 increased 0.6%, while the Government MCAI rose 0.1%. Within the Conventional MCAI, the Jumbo MCAI increased 0.8%, while the Conforming MCAI was unchanged.

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

“Mortgage credit availability ticked up in October after two months of declines, with greater availability of conventional credit while the government segment remained flat over the month. With current mortgage rates still elevated, lenders increased their offerings of ARM loans for lower LTV borrowers, including some that allow for cash-out refinancing. This also boosted the jumbo index, which was up to its highest level in three months.”