MBA: Mortgage Credit Availability Loosened in October


Mortgage credit availability increased 2.3% in October compared with September to reach score of 121.3 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).

Credit availability for conventional loans increased 5.1% compared with the previous month. Credit for government loans increased 0.2%.

Credit for jumbo loans increased 6.1%, while credit for conforming loans rose by 4.1%.

A decrease in the MCAI indicates that lending standards are tightening, while increases are indicative of loosening credit.

The index was benchmarked to 100 in March 2012.

“Credit availability increased in October for the first time since July,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “The ongoing economic recovery and improving labor market led to a rise in credit supply for various loan types.

“There was an overall increase in credit availability for low credit score and higher LTV loans, with conventional credit supply increasing 5.1 percent, and government credit staying essentially flat,” Kan says. “Despite October’s slight turnaround, credit availability remains constrained to near a low last seen in 2014.

“After seeing a drop in supply of around 60 percent since the onset of the pandemic, the jumbo index rebounded 6.1 percent in October to its highest level since July of this year,” Kan adds. “There was also an increase in ARM loan supply, likely driven by the GSEs’ September 30 deadline for LIBOR ARM loan applications. More lenders rolled out SOFR ARMs following the deadline.” 

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