Mortgage credit supply increased slightly in May, analysis shows ICE Mortgage Technology Data provided by Mortgage Bankers Association (Master of Business Administration).
The Mortgage Credit Availability Index (MCAI) rose 0.1% to 94.1 in May. The index was originally based on 100 in 2012. A decrease in MCAI indicates tightening lending standards, while an increase indicates an easing of credit.
“Traditional MCAI increased by 0.3%, while government MCAI decreased by 0.1%,” MBA explained. “Among the traditional MCAI component indexes, the Jumbo MCAI rose 0.1% and the Conforming MCAI rose 0.5%.”
The increase marks the fifth consecutive month of increases in mortgage credit availability, said Joel Kan, MBA vice president and deputy chief economist. But it is also affected by market conditions, as lenders respond to challenges related to high interest rates and limited inventory that impact borrower participation.
“In response to extremely low sales, the industry has reduced production capacity over the past two years,” Kan said in a statement. “In recent months, as lenders have expanded loan coverage to cope with the tight buying market, to attract more potential homebuyers, with a slight increase in the availability of conventional, conforming and jumbo credit.”
