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Mortgage credit availability loosens in October

Driven by increase in jumbo loans

Mortgage credit availability increased, easing credit standards slightly in October, according to the Mortgage Bankers Association’s Mortgage Credit Availability Index, which analyzes data from Ellie Mae’s AllRegs Market Clarity business information tool.

The MCAI increased 2.6% in October to 171.3, up from 167 in September.

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(Source: MBA)

To put this information into perspective, a decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012. Although the MBA was not measuring credit availability during the housing boom years of 2004 to 2007, a simulation model created by the MBA shows that the MCAI would have fallen between 750 and 850 during that time. 

“Credit availability loosened in October driven by several different factors," said Lynn Fisher, MBA vice president of research and economics. “The index was pushed up by an increase in the number of investors as well as an uptick in the availability of jumbo and high balance loan programs.”

“We are also seeing greater availability of conventional conforming loan programs that are designed to provide home ownership to a greater number of consumers,” Fisher said.

The Jumbo MCAI increased the most over the month with its growth of 5.8%. The Conventional MCAI also increased by 4%, followed by the Conforming MCAI’s increase of 2.2% and the Government MCAI’s increase of 1.6%.

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