Mortgage credit availability inched up last month, according to the latest Mortgage Credit Availability Index (MCAI) report published by the Mortgage Bankers Association (MBA), although the level of available is still close to a 10-year low.
The MCAI was up by 0.4% to 100.5 in March. The index was benchmarked at 100 in March 2012 and the MBA noted that a decline in the MCAI showed lending standards are tightening while increases show loosening credit.
The Conventional MCAI increased 1.1% and two of its component indices, the Jumbo MCAI and the Conforming MCAI, were up by 1.4% and 0.4%. But the Government MCAI dipped by 0.2%.
“Mortgage credit supply increased modestly in March but remained close to its tightest levels since 2013,” said MBA’s Vice President and Deputy Chief Economist Joel Kan. “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.”
Kan added that 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. There was a small increase in credit availability for jumbo loans, with more programs offered for cash-out refinances. However, we expect banks, which account for most of the jumbo market, will tighten jumbo credit criteria in response to recent challenges in the banking sector.”
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