Credit Availability Loosening (Slightly)

  The Mortgage Credit Availability Index increased 1.1 percent to 188.8 in November, signaling that credit was loosened last month. “The supply of credit continues to drift higher, driven once again by growth in the conventional credit space, while credit supply in government loans was essentially unchanged from the previous month,” said Joel Kan, associate vice president of economic and industry forecasting for the Mortgage Bankers Association. “There were more mortgage programs offered with high LTV and low-credit-score characteristics, likely attributable to rising demand from first-time buyers.” The Conventional MCAI increased, 2.4 percent, while the Government MCAI decreased, 0.1 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 1.1 percent, while the Conforming MCAI increased by 4.0 percent. The Conventional, Government, Conforming, and Jumbo MCAIs are constructed using the same methodology as the Total MCAI and are designed to show relative credit risk and availability for their respective index. The primary difference between the total MCAI and the Component Indices are the population of loan programs they examine. The Government MCAI examines FHA, VA, and USDA loan programs, while the Conventional MCAI examines non-government loan programs. The Jumbo and Conforming MCAIs are a subset of the conventional MCAI and do not include FHA, VA, or USDA loan offerings. The Jumbo MCAI examines conventional programs outside conforming loan limits, while the Conforming MCAI examines conventional loan programs that fall under conforming loan limits.