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Credit Availability Rose Slightly In July, Driven By Arm Loans

After a brief dip in June, mortgage credit availability increased in July, according to data from the Mortgage Bankers Association (MBA).

The Mortgage Credit Availability Index (MCAI), a report based on data from ICE Mortgage Technology, increased by 0.2% to 103.9 in July, which is indicative of loosening credit. Conversely, when the index declines, it means lending standards are tightening.

The Conventional MCAI increased 0.5%, while the Government MCAI decreased by 0.2%.

Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 0.9%, and the Conforming MCAI fell by 0.5%.

“Credit availability edged slightly higher in July, driven by increased availability of ARM loans,” said Joel Kan, MBA’s vice president and deputy chief economist. “This development was consistent with a steeper yield curve and the jumbo-conforming spread back in negative territory. The average jumbo rate was around 8 basis points lower than the average conforming rate in July.”

Kan continued, “Additionally, data from a separate survey showed that ARM loan applications have picked up in recent months, although activity is still muted compared to historical averages. Credit availability of conforming loans declined slightly over the month, mostly due to a pullback in renovation loans.”

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Credit Availability Rose Slightly In July, Driven By Arm Loans

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