Mortgage credit availability inched up in September, according to the latest Mortgage Credit Availability Index (MCAI) report from the Mortgage Bankers Association (MBA).
The MCAI rose by 0.4% to 104.4 in September; the index was benchmarked to 100 in March 2012. The Conventional MCAI saw a 0.1% uptick while the Government MCAI increased by 0.8%. Of the component indices of the Conventional MCAI, the Jumbo MCAI dipped by 0.1% and the Conforming MCAI rose by 0.7%.
“Mortgage credit availability increased to its highest level in four months, driven by a growing supply of ARM loans, both in terms of more ARM products and broader eligibility requirements,” said Joel Kan, MBA’s vice president and deputy chief economist. “The ARM share of applications has moved higher recently because ARM loan rates remain around 80 basis points lower than fixed-rate loans. Because bank funding costs are more sensitive to Federal Reserve rate cuts than fixed-rate mortgage rates, it is not surprising to see more ARM offerings.”
