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Mortgage Credit Availability Sees August Boost

Christine Stuart
Sep 12, 2023

Jumbo loans drive the uptick while conforming index hits its lowest since 2011; industry trends towards streamlined offerings.

Mortgage credit availability inched up in August, as indicated by the latest Mortgage Credit Availability Index (MCAI) from the Mortgage Bankers Association (MBA). Analyzing data furnished by ICE Mortgage Technology, the report noted a 0.3% rise in the MCAI to stand at 96.6 for the month.

An increase in the MCAI suggests a trend towards more lenient credit terms, while a decrease indicates stricter lending standards. Historically, the index was calibrated at 100 in March 2012. In a breakdown of the numbers, the Conventional MCAI saw a 0.6% rise, with the Government MCAI remaining unchanged. The component indices of the Conventional MCAI revealed that the Jumbo MCAI went up by 2.7%, whereas the Conforming MCAI decreased by the same percentage.

“Credit availability in August increased slightly but remained close to the very low levels last seen in January 2013,” MBA’s Deputy Chief Economist Joel Kan said. “The overall increase was driven by an increased number of loan programs that included parameters such as cash-out refinances and mid-range credit scores. The conforming index dropped to its lowest level since 2011, while the jumbo index increased after three monthly declines.” 

Added Kan, “Industry capacity continues to decline as lenders reduce staffing and simplify their product offerings to reduce costs and raise profitability. While this dynamic has led to lower credit availability, it has also provided some lenders with new opportunities to expand some of their product offerings, and we saw some of that growth in the jumbo space last month.”   

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