Mortgage credit availability increased 0.1% in August, rising to a score of 104.0 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).
A decline in the index score indicates that lending standards are tightening, while an increase indicates loosening credit. The index, which analyzes data from ICE Mortgage Technology, was benchmarked to 100 in March 2012.
Credit availability for conventional loans increased 0.3%, while credit for government loans decreased by 0.1%.
Credit for jumbo loans was flat, month-over-month, while credit for conforming loans increased by 0.7%.
“Mortgage credit availability increased slightly in August, driven by a small increase in ARM product offerings, which was similar to what we saw in July,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “With mortgage rates declining, and some renewed application activity for both purchases and refinances, the demand for ARM loans has increased somewhat, although the overall level of ARM applications remains close to historically low levels.”
“Overall industry capacity seems to have stabilized after some significant declines over the past few years as companies adjusted to a lower volume environment,” Kan adds. “Combined with recent economic uncertainty, those factors continue to keep credit supply relatively low.”
Photo: Breno Assis