MBA releases latest mortgage credit availability index report
Home lenders loosened their lending standards in March despite the recent spate of bank failures.
The Mortgage Bankers Association reported Tuesday that its mortgage credit availability index (MCAI) increased four basis points to 100.5% – indicating loosening credit. The index was benchmarked to 100 in March 2012.
While mortgage credit supply increased modestly in March, MBA deputy chief economist Joel Kan noted that it remained close to its tightest levels since 2013. “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,” he said.
MBA’s index showed that the availability of conventional loans increased by 1.1%, while government loans decreased by 0.2%. Of the component indices of the Conventional MCAI, jumbo loan supply rose 1.4%, and the conforming loans grew by 0.4% in March.
“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,” Kan said. “There was a small increase in credit availability for jumbo loans, with more programs offered for cash-out refinances.”
However, Kan expects banks, which account for most of the jumbo market, to tighten jumbo credit criteria in response to recent challenges in the banking sector.
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