The availability of mortgage credit increased in January, according to a report issued by the Mortgage Bankers Association (MBA) based on data obtained from ICE Mortgage Technology.
The MBA’s Mortgage Credit Availability Index (MCAI) rose in January to 92.7, or 0.7% above the December figure, based on the index’s initial benchmarking of 100 in 2012. The figures in Increases indicate that credit standards are relaxing, while tighter conditions are occurring when the MCAI tends to decline.
The MCAI of conventional loans increased by 1.3%, while the index of government loans remained stable compared to December, the MBA explained in its data release. Of the indices that make up the MCAI Conventional, the MCAI Jumbo increased by 1.9% and the MCAI Conformal increased by 0.2%.
The modest increase in mortgage credit availability is due to a greater number of conventional loan offers, according to Joel Kan, senior vice president and deputy chief economist at MBA.
“However, overall credit availability remained near 2012 lows, and the conventional index was near its all-time low in the series dating back to 2011,” he said.
However, there are still other headwinds that we need to monitor despite the rise of these programs.
“Although there has been an increase in cash-out refinancing programs available, the supply of credit overall is tight,” Kan explained. “The challenging credit environment has pushed many lenders to reduce costs by cutting certain aspects of their business, including exiting origination channels, which has contributed to a lower supply of credit.”