The Mortgage Credit Availability Index (MCAI), a survey from the Mortgage Bankers Association (MBA) that examines data from ICE Mortgage Technology, indicates that mortgage credit availability rose in August. Additionally, in August, the MCAI increased by 0.1% to 104.0. While an increase in the index signifies loosening credit, a decrease in the MCAI suggests tighter lending rules. In March 2012, the index was benchmarked at 100.
While the Government MCAI fell by 0.1%, the Conventional MCAI rose by 0.3%. The Conforming MCAI increased by 0.7%, while the Jumbo MCAI stayed the same among the Conventional MCAI’s component indices.
“Mortgage credit availability increased slightly in August, driven by a small increase in ARM product offerings, which was similar to what we saw in July,” said Joel Kan, MBA’s VP and Deputy Chief Economist. “With mortgage rates declining, and some renewed application activity for both purchases and refinances, the demand for ARM loans has increased somewhat, although the overall level of ARM applications remains close to historically low levels. Overall industry capacity seems to have stabilized after some significant declines over the past few years as companies adjusted to a lower volume environment. Combined with recent economic uncertainty, those factors continue to keep credit supply relatively low.”
Conventional, Government, Conforming & Jumbo MCAI Component Indices
In August, the MCAI increased by 0.1 percent to 104.0. While the Government MCAI fell by 0.1 percent, the Conventional MCAI rose by 0.3 percent. The Conforming MCAI increased by 0.7 percent, while the Jumbo MCAI stayed the same among the Conventional MCAI’s component indices.
Using the same technique as the Total MCAI, the Conventional, Government, Conforming, and Jumbo MCAIs are created to demonstrate the relative credit risk and availability for their respective indices. The population of loan programs that are examined is the main distinction between the Component Indices and the entire MCAI.
While the Conventional MCAI looks at non-government loan programs, the Government MCAI looks at FHA, VA, and USDA loan programs. FHA, VA, and USDA loan offerings are not included in the Jumbo and Conforming MCAIs, which are a subset of the standard MCAI. Conventional lending programs that come under conforming loan limitations are examined by the Conforming MCAI, whereas conventional programs outside of conforming loan limits are examined by the Jumbo MCAI.
Expanded Historical Series
Conventional, Government, Conforming, and Jumbo MCAI are not included in the enlarged historical series of the Total MCAI, which provides perspective on credit availability spanning around ten years. The purpose of the expanded historical series, which runs from 2004 to 2010, is to give the current series historical perspective by illustrating how credit availability has changed over the past ten years, including the housing crisis and the recession that followed.
Less frequent and incomplete data were measured at 6-month intervals and interpolated for charting purposes in the months previous to March 31, 2011. There has been no update to the methodology for the expanded historical series from 2004 to 2010.
Note: The Conforming and Jumbo indices have the same “base levels” as the Total MCAI (March 2012=100), while the Conventional and Government indices have adjusted “base levels” in March 2012. MBA calibrated the Conventional and Government indices to better represent where each index might fall in March 2012 (the “base period”) relative to the Total=100 benchmark.
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