Lending standards eased in August but are still at very low levels, according to a new survey.
The Mortgage Credit Availability Index (MCAI) rose 0.3% in August to 96.6, indicating that lending standards According to the Mortgage Bankers Association (MBA), easing is occurring but remains at very low levels. monthly survey,
The decline in MCAI indicates that Lending standards are becoming stricter While the rise in MCAI indicates that lending standards are loosening, MBA said.
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The MCAI was benchmarked at 100 in March 2012, according to the survey, which analyzes data from Intercontinental Exchange Inc. (ICE). mortgage technology,
The traditional MCAI rose 0.6%, while the government MCAI remained unchanged. The survey showed that among the component indices of traditional MCAI, jumbo MCAI increased by 2.7% and conformal MCAI decreased by 2.7%.
“Credit availability increased slightly in August but remained close to the very low levels seen in January 2013,” said Joel Kahn, MBA vice president and deputy chief economist.
An increase in the number of loan programs, which included factors such as Cash-out refinance and mid-range credit scoreThis, he said, boosted overall growth. He said the conforming index fell to its lowest level since 2011, while the jumbo index rose after three monthly declines.
Industry capacity continues to decline
“Industry capacity continues to decline as lenders are reducing headcount and simplifying their product offerings to reduce costs and increase profitability,” Kahn said. “While this dynamic has led to reduced loan availability, it has also provided new opportunities for some lenders to expand some of their product offerings, and we have seen some growth in the jumbo sector over the past month.”
Recent economic data suggests the Fed may do so Stop increasing interest rates Rate cuts will begin for the remainder of 2023 and perhaps even into 2024, which will ultimately lower mortgage rates and increase demand.
However, Fed Chairman Jerome Powell has repeatedly said that cutting rates too quickly could cause inflation to rise again. He said, the central bank is committed to reach this 2% inflation target,