Mortgage credit availability increased slightly in March, driven mainly by the introduction of new jumbo loan products with less stringent credit requirements, according to the Mortgage Bankers Association's (MBA) Mortgage Credit Availability Index (MCAI) report.
‘Consistent with past months, many lenders and investors are providing borrowers seeking higher loan amounts with a broader range of financing options by introducing new jumbo loan programs,’ says Mike Fratantoni, chief economist for the MBA, in a release. ‘Over the month, some lenders made a complete exit from wholesale lending operations, while other lenders moved to enter that space or expanded operations.’
The MBA's weekly applications survey shows growth in purchase volume for applications with higher loan amounts and contraction in home purchase application volume for lower-balance loans. Similar trends have been noted in the National Association of Realtors' existing-home sales data as well. Lenders are likely moving to create a broader range of jumbo products in order to capture the increasing demand for such financing in the market.
The MCAI increased 0.44% from 113.5 in February to 114.0 in March. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit.
The index was benchmarked to 100 in March 2012. If the MCAI had been tracked in 2007, it would have been at a level of roughly 800, indicating the credit was much more available at that time.
The MBA's MCAI analyzes data from the AllRegs Market Clarity product.
