Mortgage Credit Availability Increases in May

Mortgage credit availability increased in May, according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) which analyzes data from the AllRegs Market Clarity product. The MCAI increased 1.14 percent from 113.8 in April to 115.1 in May. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. The index was benchmarked to 100 in March 2012.   Mortgage credit loosened somewhat in May, partially as a result of a slight increase in the availability of jumbo loans. Another component was the action by some investors to lower credit score requirements on FHA loans. The MCAI now has an expanded historical series which gives perspective on credit availability going back 10-years. The expanded historical series covers 2004 through 2010, and was created to provide historical context to the current series by showing how credit availability has changed over the last 10 years – this includes the housing crisis and ensuing recession. Data prior to March 31, 2011, was generated using less frequent and less complete data measured at six month intervals and extrapolated in the months between for charting purposes.