In October, the availability of mortgage loans is the highest since 2022
Joel Kan, MBA vice president and deputy chief economist, noted that credit availability levels in October were the highest since 2022 as investors expanded their lending supply.
“The increase was driven by growth in the availability of conventional mortgage credit, while the supply of government credit changed little,” Kan added. “A greater number of ARM and cash-out refinancing programs contributed to the growth in credit supply, although the programs were mostly limited to borrowers with higher credit scores.
“A steepening yield curve, which has led to a larger spread between fixed-rate mortgage rates compared to ARM loan rates, has increased the popularity of ARMs in recent months. Additionally, more non-QM programs have supplemented the jumbo index’s rise to its highest level since 2020.”
The conventional, government, compliant and jumbo MCAIs use the same methodology as the larger MCAI index. They measure relative credit risk and availability within their loan categories.
The government’s MCAI tracks Federal Housing Administration, The U.S. Department of Veterans Affairs And US Department of Agriculture loan programs, while the conventional MCAI covers non-government loans.
The conforming and jumbo MCAIs are subsets of the conventional index, with the conforming MCAI tracking loans within the conforming limits and the jumbo MCAI tracking loans above the limits.
The broader MCAI includes an extensive historical series dating back to 2004 that provides context on credit availability during the housing crisis and recovery. Data prior to March 2011 were based on biannual observations and interpolated monthly for consistency. The historical methodology has not been updated.
