All of a sudden, credit availability became easier in November 2019. According to the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index, credit availability for borrowers in November 2019 came in at the third highest reading during the post-crash years.
The MBA’s Mortgage Credit Availability Index rose +2.1% in November to 188.9. This index score was close to an eleven-year high of 189.5 in June 2019. Loans backed by the Federal Housing Authority, the Veterans Administration and the US Department of Agriculture increased for the first time in nine months. Conforming loans backed by Freddie Mac and Fannie Mae increased +0.2% after declining throughout most of 2019.
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The biggest jumps in credit availability not measured by private label mortgages saw mortgage availability rise +1.4% and Jumbo loans rose +2.2%. MBA economist Joel Kan said, “…the Jumbo Index climbed to yet another record high as investors increased their willingness to purchase loans with lower credit scores and higher loan-to-value ratios.”
(This analysis comes from Ellie Mae’s AllRegs Market Clarity that looks at credit scores, LTV, and loan types. Additionally, this data comes from an average of 95 lenders and investors.)
The MBA anticipates that low mortgage rates will spur home lending to a 12-year high of $2.07T in 2019 and that refinancing will likely reach $79B, the highest amount since 2016.
Kan, MBA’s chief economist, said, “Expanding credit availability will continue to support active levels in mortgage lending, even as refinance activity starts to level off…” into 2020 and beyond.
Thanks to HousingWire’s Kathleen Howley for source data.