For the first time in almost two years, mortgage product offerings have climbed above levels they hit during the post-financial crisis period, the Mortgage Bankers Association found.
February's Mortgage Credit Availability Index was 100.4, an increase of 1.4%
March 2023 was the last time the MCAI was above the 100 benchmark
It is the third month in a row that mortgage credit extended to consumers has loosened, noted Joel Kan, MBA deputy chief economist, in a press release.
"The growth in credit supply was driven by greater investor appetite for [adjustable-rate mortgages] and cash-out refinance loans," Kan said in a press release. "Similar to what we have seen in recent months, the growth of [non-qualified mortgage] loan programs pushed the jumbo index higher over the month."
The conventional MCAI increased 1.3% compared with January, and is now at its highest point since June 2022, Kan said.
But that growth was entirely due to what was happening with jumbo product offerings, which increased by 1.9% from the prior month. The conforming MCAI was unchanged.
At the same time, the government MCAI rose 1.4%.
Optimal Blue's February Market Advantage report, which tracks rate lock activity and thus can be a bit of a trailing indicator of what consumer demand is, found
Conforming products made up 52% of the month's volume, while non-conforming (Optimal Blue does not distinguish between conventional and non-conventional) was 15.5%. Federal Housing Administration was 20.2%, Veterans Affairs, 11.6% and U.S. Department of Agriculture 0.7%.
The MBA's Weekly Application Survey released last Wednesday found
Separately, while one-third of consumers surveyed by ServiceLink for its State of Homebuying Report said their top motivation to refinance was to lower the interest rate, 11% wanted to switch the type of loan they have. Respondents could make multiple answers.
A generational divide exists. Among Gen Z mortgage borrowers, 19% said they would refi to switch the type of loan. Only 4% of baby boomers would want to change the terms and type of mortgage they have.
"For lenders, this provides an opportunity to tap into technology and increase offerings that buyers indicate they want to see," said Dave Steinmetz, president, origination services at ServiceLink, in a press release. "Lenders also should focus on education and increasing transparency to meet the current needs of today's buyers."
The MCAI is calculated using data from ICE Mortgage Technology that the MBA runs through a proprietary formula.
