Saturday , 23 January 2021

Mortgage Credit Availability Flat in December

Mortgage credit availability dipped slightly in December, falling 0.1% compared with November to a score of 122.1 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).

By category, credit availability for conventional loans decreased 2.8%, compared with the previous week, while credit for government loans increased by 2.1%.

Within the conventional category, credit for jumbo loans increased by 1.4% while credit for conforming loans fell by 7.2%.

“Credit availability in December remained essentially unchanged, with an increase in government credit offset by a decrease in conventional credit,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “The decline in conventional credit availability was the first in three months and was driven by fewer ARM offerings. ARM loans have increasingly seen a smaller share of the market, given the historically low rates for fixed-rate mortgages. Availability for government loans and jumbo loans have increased for four months and three months in a row, respectively.

“The increased credit supply for jumbo loans and government loans, driven in part by the greater supply of lower credit score and higher LTV loans, will support first-time home buyers entering the market,” Kan says. “This will also help to facilitate sustained purchase activity for what is expected to be a strong 2021 for the housing market.” 

The report analyzes data from Ellie Mae’s AllRegs Market Clarity business information tool.

A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012.

The post Mortgage Credit Availability Flat in December appeared first on MortgageOrb.

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