Mortgage credit provided
The Mortgage Credit Availability Index rose 1.1% to 93.9 in March from 92.9 in February. The last time the MCAI was over the 100-point benchmark established in March 2012 was
Conventional credit offered increased 2.1% on a month-to-month basis, with jumbo product availability up by 2.6% — the only MCAI component that rose compared with last year — and conforming 1.2% higher.
"There were increased offerings of cash-out refinance loan programs across fixed rate and adjustable rate mortgage loans, as well as for all occupancy types," Joel Kan, the MBA's deputy chief economist, said in a press release. "Although credit supply increased for the third consecutive month, it remains low at nearly 7% below a year ago and still close to 2012 lows."
The growth in the jumbo portion was due to additional non-qualified mortgage and superjumbo product offerings, he added.
Government product availability was practically the same month-to-month, down by 0.1%.
The MCAI is formulated using data from ICE Mortgage Technology.
Cash-out refi rate locks increased by 10.7% in March compared with February but were 18.9% down from one year prior,
This loosening comes at a time when consumers are seemingly adjusting to interest rates remaining higher than they have in the recent past, Fannie Mae said.
Its Home Purchase Sentiment Index for March declined for the first time since November, by 0.9 points to 71.9, as the share of respondents who think rates will increase over the next 12 months now is greater than the share of those who believe they will drop.
A year ago,
In the March survey, 29% of consumers said rates would decrease through this time next year,
The share of respondents that expect no change increased to 36% from 32% one month ago.
Both the "good time to buy" (up 2 percentage points to 21%) and "good time to sell" (1 percentage point higher at 66%) metrics increased during the month, noted Doug Duncan, Fannie Mae's chief economist.
"However, consumers took a slightly more pessimistic view on the likely direction of mortgage rates, likely reflecting the fact that
Fannie Mae's March economic forecast expects an increase in property listings and sales this year. "We believe this will be driven not only by those coming off the sidelines due to a rate-related recalibration, but also by households who may need to move for other life reasons," Duncan said.
Consumers are coming to the realization that mortgage rates are not going back to 3%, Melissa Cohn, regional vice president of William Raveis Mortgage, said.
"The 6% rate environment is one that was considered to be a healthy rate environment in the 60s, and for many other times over the course of the past 50 years," Cohn said in a statement about current mortgage market conditions. "We're just going to have to recalibrate what we consider a market-competitive rate. It's creating a new norm."
