Mortgage credit availability expanded in July, according to data released by the Mortgage Bankers Association.
The Mortgage Credit Availability Index rose 1% to 165.3 in July, the MBA reported Thursday. Increases to the index indicate a loosening of credit.
The MBA altered the methodology used to generate the index this month. As a result, the new methodology indicates that mortgage credit loosened in recent months, which reverses the MBA's previous reports that said it tightened.
"This is a result of new jumbo loan offerings that did not exist in our 2012 base period becoming more popular and prevalent in recent periods," Lynn Fisher, MBA vice president of research and economics, said in a news release. "Our new methodology captures the addition of these new loan offerings more effectively and better aligns with anecdotal evidence of loosening credit conditions over the last seven months."
July's increase stemmed from "an uptick in programs that allow for refinancing among relatively lower credit score borrowers," Fisher said.
At the component level, the jumbo and government MCAI both recorded the greatest loosening at 1.3% for the month followed by the conventional MCAI's 0.7% increase and the confirming MCAI's 0.1% uptick.
Additionally the MBA modified the definition of its conforming and jumbo indices so that they only include conventional loan programs. They were previously based on loan size, and the jumbo included high-balance FHA and VA loan programs.
