Rates have remained high throughout most of the year thus far, but the Mortgage Bankers Association says that a key performance indicator revels that lending standards are loosening. According to the MBA, mortgage credit availability increased in April.
The Mortgage Credit Availability Index rose by 0.1 percent to 94 in April. A decline in the MCAI indicates that lending standards are tightening, while increases are indicative of loosening credit. The index was benchmarked to 100 in March 2012.
“Mortgage credit availability was little changed in April, with credit categories such as conventional, conforming, and jumbo seeing very small monthly gains,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The supply of credit has stabilized, expanding slightly over the past four months but remaining close to 2012 lows. Lenders continue to reduce capacity with mortgage rates still above 7 percent and origination volume moving at a slow pace. Even with challenging affordability conditions and fairly strong housing demand, credit remains tight and housing supply low.”
The Conventional MCAI increased 0.3 percent, while the Government MCAI decreased by 0.0 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 0.3 percent, and the Conforming MCAI rose by 0.3 percent.