Mortgage credit availability increased 0.4% in March compared with February, rising to a score of 100.5 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).
Credit availability for conventional loans increased 1.1%, while credit for government loans decreased by 0.2%.
Within the conventional realm, credit for jumbo loans increased by 1.4% while credit for conforming loans increased by 0.4%.
“Mortgage credit supply increased modestly in March but remained close to its tightest levels since 2013,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “With the spring buying season underway, lenders are grappling with the threat of a recession and tighter overall financial conditions following the recent bank failures. The supply of government mortgage credit – which includes FHA and VA loans that many first-time homebuyers rely on – declined for the third time in four months, which could potentially hinder first-time buyer activity.
“There was a small increase in credit availability for jumbo loans, with more programs offered for cash-out refinances,” Kan continued. “However, we expect banks, which account for most of the jumbo market, will tighten jumbo credit criteria in response to recent challenges in the banking sector.”
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.
Photo: Jennifer Grismer