Mortgage credit availability increased slightly in July, rising 0.2% to a score of 103.9 on the Mortgage Bankers Association (MBA) Mortgage Credit Availability Index (MCAI).
Credit availability for conventional loans increased 0.5%, while credit availability for government MCAI decreased 0.2%.
Credit for jumbo loans increased by 0.9% while credit for conforming loans fell by 0.5%.
“Credit availability edged slightly higher in July, driven by increased availability of ARM loans,” says Joel Kan, vice president and deputy chief economist for the MBA, ion a statement. “This development was consistent with a steeper yield curve and the jumbo-conforming spread back in negative territory.”
“The average jumbo rate was around 8 basis points lower than the average conforming rate in July,” Kan says. “Additionally, data from a separate survey showed that ARMs loan applications have picked up in recent months, although activity is still muted compared to historical averages. Credit availability of conforming loans declined slightly over the month, mostly due to a pullback in renovation loans.”
The report analyzes data from ICE Mortgage Technology. A decrease in the index score indicates that lending standards are tightening, while increases are indicative of loosening credit. The index was benchmarked to 100 in March 2012.