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The Mortgage Bankers Association's Mortgage Credit Availability Index reported an increase in mortgage credit availability for October 2020.
The MCAI increased by 2.3% to 121.3 in October which points to a loosening of lending standards. The Conventional MCAI increased by 5.1% and the Government MCAI increased by 0.2%, according to the report. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 6.1%, and the Conforming MCAI rose by 4.1%.
"Credit availability increased in October for the first time since July. The ongoing economic recovery and improving labor market led to a rise in credit supply for various loan types," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "There was an overall increase in credit availability for low credit score and higher LTV loans, with conventional credit supply increasing 5.1%, and government credit staying essentially flat. Despite October's slight turnaround, credit availability remains constrained to near a low last seen in 2014."
"After seeing a drop in supply of around 60% since the onset of the pandemic, the jumbo index rebounded 6.1% in October to its highest level since July of this year. There was also an increase in ARM loan supply, likely driven by the GSEs' September 30 deadline for LIBOR ARM loan applications. More lenders rolled out SOFR ARMs following the deadline."