Joel Kan, MBA’s vice president and deputy chief economist, noted that October’s credit availability level was the highest seen since 2022 due to investors broadening their loan offerings.
“The increase was driven by growth in conventional mortgage credit availability, while government credit supply changed little,” Kan added. “A greater number of ARM and cash-out refinance loan programs contributed to credit supply growth, although the programs were mostly limited to higher credit score borrowers.
“A steeper yield curve, leading to a bigger differential between fixed-rate mortgage rates in comparison to ARM loan rates, has increased the popularity of ARMs in recent months. Additionally, more non-QM programs supplemented the increase in the jumbo index to its highest level since 2020.”
The conventional, government, conforming and jumbo MCAIs use the same methodology as the larger MCAI index. They measure relative credit risk and availability within their loan categories.
The government MCAI tracks Federal Housing Administration, U.S. Department of Veterans Affairs and U.S. Department of Agriculture loan programs, while the conventional MCAI covers nongovernment loans.
The conforming and jumbo MCAIs are subsets of the conventional index, with the conforming MCAI tracking loans within conforming limits and the jumbo MCAI tracking those above the limits.
The broader MCAI includes an expanded historical series dating back to 2004, providing context on credit availability through the housing crisis and recovery. Data before March 2011 was based on semiannual observations and interpolated monthly for consistency. The historical methodology has not been updated.
