Mortgage credit availability in US increases last month to highest since October 2023
Date
8/11/2024 4:16:48 AM
(MENAFN) According to a report released Thursday by the Mortgage Bankers Association (MBA), mortgage credit availability in the US saw an increase in July, reaching its highest level since October of the previous year. The Mortgage Credit Availability Index, which assesses borrower eligibility based on credit score, loan type, and loan-to-value ratio, climbed by 3.3 percent to a value of 98.1 for the month. This rise indicates a loosening of credit standards, as opposed to a decline in the index, which would signify tighter lending conditions.
Joel Kan, Vice President and Deputy Chief Economist at MBA, highlighted that this increase in credit availability was largely driven by the expansion of conventional loan offerings, including adjustable-rate mortgages (ARMs) and cash-out refinance options. Kan noted that while industry capacity had been constrained for an extended period, the recent credit expansion marks a positive shift that should benefit homebuyers and those looking to refinance, especially as mortgage rates have decreased in recent weeks.
In addition to the rise in the Mortgage Credit Availability Index, mortgage applications in the US also saw a notable increase of 6.9 percent for the week ending August 2. This uptick came as the average rate for 30-year fixed-rate mortgages fell to 6.55 percent, its lowest level since May 2023, down from 6.82 percent the previous week. This decline in rates, coupled with increased credit availability, is expected to provide additional support for prospective homebuyers and refinance borrowers.
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