Lenders made more low-down-payment programs available to prospective borrowers
Mortgage lending standards loosened in October from September, according to a report by the Mortgage Bankers Association (MBA).
The Mortgage Credit Availability Index (MCAI) rose 2.5% to 186.7 in October. The index analyzes data from Ellie Mae’s AllRegs Market Clarity tool. A decline in the index would indicate tightening lending standards.
"Credit availability increased in October, driven largely by an expansion in the supply of conventional credit, while government credit fell slightly over the month," said Joel Kan, associate vice president of economic and industry forecasting at MBA. "Reversing a trend from last month, lenders made more conventional and low-down-payment programs available to prospective borrowers. This increase in supply was likely in response to a growing number of first-time home buyers in the market, as home price appreciation has slowed and wage growth has picked up. Jumbo credit availability also expanded last month, with the jumbo index increasing again to its highest level since the survey began."
During the period, the conventional MCAI was up 5.5% and the government MCAI slipped 0.4%. Of the component indices of the conventional MCAI, the jumbo MCAI rose by 6.3% while the conforming MCAI climbed 4.6%.