Mortgage Credit Availability Flat in December


Mortgage credit availability dipped slightly in December, falling 0.1% compared with November to a score of 122.1 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).

By category, credit availability for conventional loans decreased 2.8%, compared with the previous week, while credit for government loans increased by 2.1%.

Within the conventional category, credit for jumbo loans increased by 1.4% while credit for conforming loans fell by 7.2%.

“Credit availability in December remained essentially unchanged, with an increase in government credit offset by a decrease in conventional credit,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “The decline in conventional credit availability was the first in three months and was driven by fewer ARM offerings. ARM loans have increasingly seen a smaller share of the market, given the historically low rates for fixed-rate mortgages. Availability for government loans and jumbo loans have increased for four months and three months in a row, respectively.

“The increased credit supply for jumbo loans and government loans, driven in part by the greater supply of lower credit score and higher LTV loans, will support first-time home buyers entering the market,” Kan says. “This will also help to facilitate sustained purchase activity for what is expected to be a strong 2021 for the housing market.” 

The report analyzes data from Ellie Mae’s AllRegs Market Clarity business information tool.

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.

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