Mortgage credit availability edges higher in May

Mortgage credit availability inched higher in May, driven by a modest loosening in jumbo loan programs, according to the Mortgage Credit Availability Index (MCAI) from the Mortgage Bankers Association (MBA) that analyzes data from ICE Mortgage Technology.

The MCAI rose 0.1% to 108.0 in May. The index, which was benchmarked to 100 in March 2012, increases when lending standards loosen and declines when credit tightens.

The Conventional MCAI increased 0.2%, while 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 — was unchanged.

Within the conventional segment, the Jumbo MCAI rose 0.3% and the Conforming MCAI was flat, MBA reported.

“Mortgage credit availability in May stayed close to the previous month’s levels,” said Joel Kan, CMB, MBA’s vice president and deputy chief economist. “Mortgage rates reached 9-month highs over the month, which put pressure on homebuyers and reduced the demand for refinancing. Given the economic uncertainty and rate volatility, lenders held their loan program offerings fairly stable, although based on the subindexes, jumbo credit availability increased slightly over the month. The jumbo index increased 0.3 percent, with most of the increase coming from ARM loan offerings.”

The flat overall credit profile underscores that lenders are still cautious despite pressure from weak refinance volume and affordability-constrained purchase demand. Small changes in the jumbo segment — particularly growth in adjustable-rate mortgage (ARM) offerings — suggest some lenders are targeting higher-income borrowers who are less rate-sensitive and may still transact despite elevated rates.

The MCAI is a standardized, quantitative index focused exclusively on mortgage credit availability. It is calculated using borrower eligibility factors such as credit score, loan type and loan-to-value ratio, along with underwriting criteria from more than 95 lenders and investors.

This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication.