Mortgage credit availability increased 0.9% in August, according to the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).
The increase brought the index score to 99. A decrease in the score indicates that lending standards are tightening, while increases are indicative of loosening credit.
The index was benchmarked to 100 in March 2012.
Credit availability for conventional loans increased 1.8% compared with the previous month, while credit for government loans was unchanged.
Of the component indices of the conventional index, credit availability for jumbo loans increased by 1.5% while credit for conforming loans increased 2.6%.
“Credit availability increased in August, with the conventional credit index reaching its highest level since July 2022,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “This was driven by increased cash-out refinance and non-QM programs.
“Additionally, the jumbo index increased for the eighth consecutive month to its highest level since 2022,” Kan adds. “Mortgage rates have been on the decline since May 2024, prompting a pickup in refinance activity, which remains limited to a smaller segment of homeowners with higher rates. As a result, the increase in credit availability was the result of lenders broadening their refinance offerings to meet the greater demand.”
Photo: Giorgio Trovato