The Mortgage Credit Availability Index (MCAI) rose in December, jumping 0.7 percent to 96.6.
The Conventional MCAI increased 1.3 percent, while the Government MCAI remained unchanged. Within the Conventional MCAI, the Jumbo MCAI increased by 2.3 percent, while the Conforming MCAI fell by 0.7 percent.
An increase in the index is indicative of loosening credit, while a decline in the MCAI indicates that lending standards are tightening. The index is benchmarked to 100.
“Credit availability increased slightly in December, driven by more offerings for ARMs and cash out refinances that are primarily for borrowers with better credit,” Joel Kan, MBA’s vice president and deputy chief economist, said. “These factors led to a slight rebound in conventional credit compared to the previous month. Additionally, the jumbo index rose to its highest level since August 2024.”
The Conventional, Government, Conforming, and Jumbo MCAIs are constructed using the same methodology as the Total MCAI. They are designed to show relative credit risk/availability for their respective index. The primary difference between the total MCAI and the Component Indices is the population of loan programs which they examine.
The MCAI, produced by the Mortgage Bankers Association, provides the only standardized quantitative index that is solely focused on mortgage credit.
The MCAI is calculated using several factors related to borrower eligibility, including credit score, loan type, loan-to-value ratio, among others. These metrics and underwriting criteria for over 95 lenders/investors are combined by MBA using data made available via ICE Mortgage Technology and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time.