Mortgage credit availability increased 0.6% in September compared with August, rising to a score of 97.2 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).
The index was benchmarked to 100 in March 2012. When the index score goes down it indicates that lending standards are tightening – and when it rises, it indicates standards are loosening.
Credit availability for conventional loans increased 0.6% compared with the previous month, while credit for government loans also increased by 0.6%.
Credit availability for jumbo loans increased by 0.8%, while credit for conforming loans rose by 0.2%.
“Credit availability increased slightly in September, as lenders increased their loan offerings marginally to meet the changing needs of borrowers who are facing higher mortgage rates,” explains Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “There were more loan programs for ARM loans for borrowers seeking lower initial monthly payments and also some increases in non-QM product offerings. Credit availability increased across all loan categories, with the jumbo index increasing for the second straight month, driven by the expansion of ARM and non-QM offerings.
“Industry capacity has declined significantly since the peak originations months in 2021, and MBA expects to see further declines in originations volume, given the high interest rate environment and typical seasonal slowdown,” Kan adds.
Photo: Maria Ziegler