Recent decline in mortgage rates leads to a leap in jumbo refinances

VA, FHA refis take a hit, though

The Mortgage Bankers Association is noting two distinctive trends in mortgage lending in it latest credit availability report.

The first is the recent declines in mortgage rates, which only just showed signs of leveling out, led to a leap in refinances for jumbo mortgages.

However, interest in Department of Veterans Affairs and Federal Housing Administration loans showed less refi interest.

Overall, mortgage credit availability increased in March according to the MBA’s Mortgage Credit Availability Index, which analyzes data from LOS provider Ellie Mae.

The MCAI rose 1.1% to 182.1 in March; the index benchmark is 100.

Looking deeper, the credit availability index for conventional loans increased 3.6%. However, the Government MCAI declined by 1.2%.

The Jumbo MCAI, by way of comparison increased by a whopping 5.2%.

“Credit availability increased in March, primarily due to a spike in jumbo mortgage offerings. The jumbo sub-index increased 5% and reached its highest level since last November, as the recent decline in mortgage rates led to a jump in refinances from borrowers with larger loans,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.

“The credit supply for government loans decreased in March, as investors continue to reduce FHA and VA streamline refi offerings,” Kan added. 

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