Despite a flat credit index, lenders expand offerings as conventional and government applications climb
Mortgage credit availability was unchanged in April, holding steady after a notable increase in March, according to the Mortgage Bankers Association’s (MBA) latest Mortgage Credit Availability Index (MCAI).
The MCAI, which analyzes data from ICE Mortgage Technology, stayed flat at 102.9 for the month. To put that into context: a decline in the index signals tighter lending standards, while an increase suggests loosening credit conditions. The index uses March 2012 as its baseline, benchmarked at 100.
“Credit availability was unchanged in April following a sizable increase in March,” said Joel Kan, vice president and deputy chief economist at MBA. “Overall levels of credit supply remain tight but have generally grown since 2023, as lenders continue to offer cash-out refinance loan programs as well as jumbo and non-QM loans. Lenders remain positioned for potential refinance opportunities as mortgage rates continue to fluctuate.”
Both the Conventional MCAI and the Government MCAI remained unchanged in April. Within the components of the Conventional MCAI, the Jumbo MCAI slipped slightly by 0.1%, while the Conforming MCAI saw a modest increase of 0.2%.
This stability comes as lenders continue to adapt to shifting market conditions, particularly with mortgage rates moving lower in recent weeks. According to the MBA, refinance volume jumped 11% during this period, with VA refinance applications leading the way, rising 26%.
While refinance activity picked up, its share of total mortgage applications edged slightly downward to 37.1% from 37.3% the previous week. The adjustable-rate mortgage (ARM) share of applications increased to 8.3%.
Looking at government-backed loans, the FHA share of total applications dipped to 16.4% from 16.7% the prior week, while the VA share grew to 13.3% from 13.1%. The USDA share decreased slightly to 0.5% from 0.6%.
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Despite broader economic uncertainty, conventional purchase application volume climbed 13% and was up 9% compared to the same time last year, which MBA chief economist Mike Fratantoni said was “surprisingly strong.”
“Borrowers of conventional loans tend to have larger loan sizes and [are] more apt to be move-up buyers,” Fratantoni noted. “Government purchase loans were also up 6 percent for the week, led by a 9% growth in FHA purchase applications.”
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