But despite the ongoing economic recovery, credit supply remains low
Mortgage credit supply increased slightly in July, driven by an uptick in jumbo loan programs.
The Mortgage Bankers Association’s Mortgage Credit Availability Index (MCAI) was up 0.3% to 119.1 in July, indicating lending standards tightened a little compared to June. The index was benchmarked to 100 in March 2012.
“The overall gain was despite another month of pullbacks in high-LTV refinance programs due to GSE policy changes,” said Joel Kan, AVP of economic and industry forecasting at MBA. “The elimination of more high-LTV refinance loans drove most of the 3% drop in the conforming index, but that was somewhat offset by lenders adding new refinance loan programs to help qualified, lower-income GSE borrowers. The bounce back in jumbo credit availability followed a sharp drop in June, as some investors renewed their interest in jumbo ARM loans for cash-out refinances and investment homes.”
The Conventional MCAI grew 0.8%, while the Government MCAI remained unchanged. Of the component indices of the Conventional MCAI, the Jumbo MCAI rose by 3.8%, and the Conforming MCAI dropped by 3.2%.
“Even as the economic recovery is underway, overall credit supply has remained close to its lowest levels since 2014. Some borrowers are still in pandemic-related forbearance status, and servicers continue to work through possible resolutions for these borrowers,” Kan said.