Mortgage credit availability edges higher in March

Mortgage credit availability increased in March, reaching its highest level since August 2022, as lenders modestly eased standards across conventional and government loan programs. That’s according to the Mortgage Credit Availability Index (MCAI) released Thursday by the Mortgage Bankers Association (MBA).

The MCAI, which analyzes data from ICE Mortgage Technology, rose 1.1% to a reading of 108.3 in March. The index was benchmarked to 100 in March 2012. A lower MCAI reading signals tighter credit, while a higher reading points to looser lending standards.

The Government MCAI, which includes Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) and U.S. Department of Agriculture (USDA) loan programs, led the monthly gains with an increase of 1.7%, while the Conventional MCAI increased 0.6%.

Within the conventional segment, the Jumbo MCAI climbed 0.8% and the Conforming MCAI was up 0.2%, MBA reported.

“Credit availability increased modestly in March to its highest level since August 2022, with growth across all loan types. Despite the increase, overall credit supply is still closer to the lower end of its historical range,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.

“Although March was volatile for mortgage rates and they moved higher over the month, there was growth in streamline refinance programs for lower credit score borrowers. Additionally, the jumbo index increased for the third consecutive month, driven by greater availability of non-QM loan programs.”

The MCAI is the only standardized quantitative index focused solely on mortgage credit availability, according to the MBA. It is calculated using several factors tied to borrower eligibility, including credit score, loan type and loan-to-value ratio.

Underwriting criteria from more than 95 lenders and investors are combined using data provided by ICE Mortgage Technology and a proprietary MBA formula to generate a single summary measure of credit availability at a point in time.

This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication. The system helps convert company announcements and industry data into HousingWire-style news coverage.