Mortgage credit availability decreased in November, according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) that analyzes data from Ellie Mae’s AllRegs Market Clarity business information tool.
The MCAI fell by 0.6% to 124.9 in November. 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.
The Conventional MCAI increased 1.9%, while the Government MCAI decreased by 2.7%. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 3%, and the Conforming MCAI rose by 0.2%.
“Credit availability in November was down slightly, even as the housing market continues to thrive amidst the improving job market,” observes Joel Kan, MBA’s associate vice president of economic and industry forecasting. “However, the picture was different depending on the market segment. An increase in conventional credit availability was offset by a decrease in government credit, as lenders reduced their offerings of government loan programs with lower credit scores, as well as those for investment homes.”
“Credit supply for jumbo loans increased for the fifth straight month,” Kan adds. “Lenders scaled back on jumbo supply at the onset of the pandemic, and even with the recent growth in credit availability, the jumbo index remains more than 40 percent below February 2020 levels. As home-price growth continues, and mortgage rates creep higher, increased credit availability is needed for qualified borrowers looking to purchase a home – especially for first-time homebuyers, who rely heavily on government mortgage programs.”