Mortgage Credit Availability Increases Slightly in December

Mortgage Credit Availability Increases Slightly in December
Written by Publishing Team

Mortgage loan availability increased in December 2021 according to the Mortgage Credit Availability Index (MCAI), a report by the Mortgage Bankers Association (MBA) that analyzes data from Ellie Mae’s AllRegs Market Clarity business intelligence tool. The MCAI rose 0.8% to 125.9 in December.

Credit supply rose in December, with growth across both traditional and government sectors of the market. The overall credit index rose to its highest level since May 2021, but remained 30 percent below its pre-pandemic level,” says Joel Kahn, associate vice president of economic and industrial forecasts at the MBA.

A decrease in the MCAI indicates that lending standards are tightening, while increases in the index indicate credit easing. The index was measured to 100 in March 2012. The traditional MCAI rose 0.8%, while the government’s MCAI rose 0.7%. Among the indices that make up the traditional MCAI index, the Jumbo MCAI Index is up 0.6%, and the matching MCAI Index is up 1.1%.

Kan continues, “Growth in December was driven by more ARM loan programs and lower credit score, which was likely due to a combination of a price environment and affordability challenges.” Lenders have expanded their offerings to eligible borrowers who have been most affected by these market conditions. 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.”

“The overall supply of mortgage credit grew only 3 percent compared to the same month last year, with a 34 percent increase in the availability of mega credit contributing most of this growth,” Kahn adds. , saw a tightening in the last year.”

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