More mortgage credit becomes available in response to higher rates

More mortgage credit becomes available in response to higher rates
Written by Publishing Team

The Mortgage Bankers Association found that the availability of mortgage loans declined in December as lenders added programs to help consumers facing rising interest rates and lower housing affordability.

The real estate credit availability index rose 0.8% in December to 125.9 from 124.9 November. This is the highest level recorded by MCAI since thenlast May Credit availability remains 30% below pre-pandemic levels, Joel Kahn, associate vice president of economic and industrial forecasting at the MBA, said in a press release.

Growth in December was driven by more adjustable mortgage And lower credit score loan programs, which are likely due to a combination of high rate environment “In addition, there has been an increase in government simplified refinancing programs to help borrowers who are still looking to refinance before interest rates rise further,” Kahn said.

By investor type, the traditional MCAI is up 0.8% from November, while the government’s MCAI — which measures the Federal Housing Administration, Veterans Affairs, and USDA/Rural Housing Service lending programs — is up 0.7%.

The matching component of the traditional index rose 1.1%, while the jumbo sector gained 0.6%.

“The overall supply of mortgage credit grew just 3% compared to the same month last year, with a 34% increase in Availability of jumbo credit Kahn said he contributes to most of this growth. And government credit supply, as well as matching credit, has seen tightening in the past year.

However, in the second half of 2021, mortgage lenders relaxed their credit offerings every month except for November.

The MCAI is measured at 100 representing credit conditions in March 2012, and is computed by the MBA using loan program data from Ellie Mae’s AllRegs Market Clarity tool.


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