The Mortgage Credit Access Index (MCAI), the Mortgage
Bankers Association’s (MBA’s) measure of credit availability, rose 1.4 percent
in May to a 129.9 reading. An increase in the index indicates a loosening of
mortgage underwriting standards.The Conventional MCAI increased 3.5 percent,
while the Government MCAI decreased by 0.3 percent. Of the component indices of
the Conventional MCAI, the Jumbo MCAI rose 5.1 percent, and the Conforming MCAI
by 1.6 percent. “Mortgage credit availability in May increased
to its highest level since near the start of the pandemic, but still remained
at 2014 levels. The increase was driven by a 3 percent gain in the conventional
segment of the market, with a rise in the supply of ARMs and cash-out
refinances. This is consistent with the uptick in mortgage rates and a slowing
refinance market, as well as MBA’s Weekly Applications Survey data showing
increased interest in ARMs,” said Joel Kan, MBA’s Associate Vice President of
Economic and Industry Forecasting. “The jumbo index jumped 5 percent last
month, but even with increases over the past two months, the index is still
around half of where it was in February 2020. A rapidly improving economy and
job market has freed up jumbo credit, as banks have deposits to utilize.
However, there is still plenty of restraint, as many sectors have not fully
returned to pre-pandemic capacity, and there are around 2 million borrowers
still in forbearance.” 


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