October saw increased credit availability according to the Mortgage Bankers Association (MBA) Mortgage Credit Availability Index (MCAI), which analyzes data from Ellie Mae’s AllRegs® Market Clarity® business information tool.
- MCAI increased 0.1% to 125.7 in October—indicating loosening credit
- The index was benchmarked to 100 in March 2012
- The Conventional MCAI increased 0.1%, while the Government MCAI was flat
- Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 4.1% and the Conforming MCAI decreased 6.0%
“Credit availability inched forward in October, but the overall index was 30% lower than February 2020 and close to the lowest supply of mortgage credit since 2014,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting, in a statement. “Within the subindexes, a 4% increase in the jumbo index was essentially offset by a 6% drop in the conforming index. There was an increase in the supply of jumbo ARM and non-QM products, which drove most of the increase in the jumbo index. On the conforming side, there was a pullback in ARMs, higher LTV loans and lower credit score products. While there is tightening in ARM credit availability both for jumbo and conforming loans, ARM loans have accounted for a small share of loan applications, ranging from 2.5% to 5% of applications to date in 2021.”
“Tight credit availability, combined with ongoing supply and affordability challenges, are significant obstacles for some prospective first-time buyers,” added Kan.