Credit isn’t always equally available. When it’s tight, prospective borrowers will have a more difficult time getting approved for a loan. Lending standards are higher and fewer loan programs are available. When it loosens, borrowers can expect an easier time getting approved. That’s why the Mortgage Bankers Association tracks mortgage credit availability each month. Its Mortgage Credit Availability Index measures whether credit is loosening or tightening on a scale where any increase in the index indicates looser credit and declines are a sign that access to credit is tightening. In November, the index was up nearly 1 percent. Joel Kan, MBA’s vice president and deputy chief economist, says credit has been improving for months now. “Mortgage credit availability increased for the fifth consecutive month to its highest level since 2022, driven by a growing supply of ARM and cash-out refinance loan programs,” Kan said. “The mortgage rate on ARM loans is averaging almost 90 basis points lower than fixed-rate loans, so they remain a viable option for borrowers hoping to reduce their monthly payments or utilize some of their home equity.” (source)
