Jul 9, 2019 16:45 ET
Credit availability for jumbo loans reaches new peak
Are your clients looking for jumbo mortgages? According to the Mortgage Bankers Association’s newest Mortgage Credit Availability Index, jumbo loan credit availability is at its highest level on record.
Overall, mortgage credit availability increased 0.2% month over month in June, with the composite index posting a reading of 189.8. Increases in the index are indicative of loosening credit standards, with the index benchmarked to 100 in March 2012.
Although overall credit availability ticked up slightly in June, the component jumbo loan index grew 0.6%, compared to an 0.1% decline for the conforming loan index, said Joel Kan, the MBA’s associate vice president of economic and industry forecasting.
“Jumbo credit availability increased for the sixth month in a row and is at its highest level since 2011, when the survey began,” he said.
“Credit availability has generally increased in 2019 as lenders have worked to meet affordability challenges. Because mortgage rates have recently fallen and home-price growth has decelerated in many markets, credit availability may stabilize at its current levels.”
The conventional index (of which the jumbo and conforming indices are components) increased 0.3% in June compared to May. On the other hand, the government index — which includes Federal Housing Administration, U.S. Department of Veterans Affairs and U.S. Department of Agriculture loans — retreated by 0.1%.