Mortgage Credit Availability Inched Upward In July

Posted by Lauren Tyler on August 03, 2017 No Comments
Categories : Residential Mortgage

Mortgage credit availability rose slightly in July, increasing 0.3% to 179.0 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).

A decrease in the MCAI indicates that lending standards are tightening, while increases are indicative of loosening credit.

The index was benchmarked to 100 in March 2012.

Of the four component indices, the jumbo MCAI saw the greatest increase in availability over the month (up 2.7%), followed by the conventional MCAI (up 1.5%), and the conforming MCAI (up 0.3%). The government MCAI (down 0.6%) decreased from last month.

“Mortgage credit availability increased slightly in July, driven by increased availability of conventional programs,” says Lynn Fisher, MBA’s vice president of research and economics. “Many agency-eligible loan programs have been updated so that underwriting parameters for adjustable-rate mortgages more closely align with their existing fixed-rate counterparts.

“In many cases, this means higher loan-to-value ratios on existing ARMs loan programs, which exerted an upward pressure on the MCAI,” Fisher continues. “This change affected conforming loan programs as well as agency jumbo programs, which focus on loans in high-cost areas that exceed the baseline conforming loan limit of $424,000 but which are still eligible for purchase by the GSEs.”

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