The Mortgage Bankers Association (MBA) Mortgage Credit Availability Index (MCAI) showed an increase of 0.1 percent to 125.7 in October 2021, indicating loosening lending standards and greater mortgage credit availability.
Joel Kan, MBA associate vice president of economic and industry forecasting, said while credit availability inched forward in October, the overall index was 30 percent lower than February 2020 and close to the lowest supply of mortgage credit since 2014.
“Within the subindexes, a 4 percent increase in the jumbo index was essentially offset by a 6 percent drop in the conforming index,” Kan said. “There was an increase in the supply of jumbo ARM [adjustable-rate mortgage] and non-QM [qualified mortgage] products, which drove most of the increase in the jumbo index.
“On the conforming side, there was a pullback in ARMs, higher LTV [loan-to-value] 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 percent to 5 percent of applications to date in 2021.”
Kan added, “Tight credit availability, combined with ongoing supply and affordability challenges, are significant obstacles for some prospective first-time buyers.”
The conventional MCAI increased 4.5 percent, while the government MCAI decreased by 0.7 percent, MBA stated. Of the component indices of the conventional MCAI, conforming and jumbo loan indices rose by 2.6 percent and by 5.8 percent, respectively.