Mortgage credit availability in US grows to highest since last October

ISTANBUL

Mortgage credit availability in the US increased in July, reaching its highest since last October, according to a report Thursday by the Mortgage Bankers Association (MBA).

The Mortgage Credit Availability Index, calculated by credit score, loan type and loan-to-value ratio for borrower eligibility, rose 3.3% to 98.1 in July, MBA said in a statement.

A decline in the index indicates lending standards are tightening, while increases are indicative of loosening credit.

"Overall credit availability grew to its highest level since October 2023, driven by increased conventional loan offerings such as ARMs and cash-out refinance loans,” said MBA’s Vice President and Deputy Chief Economist Joel Kan.

"Industry capacity has been low for some time, but we have now seen more than six months of credit expansion, which should be supportive for homebuyers and refinance borrowers, as rates have declined in recent weeks," he added.

Mortgage applications in the US rose 6.9% for the week ending Aug. 2, as the 30-year fixed-rate mortgages fell to 6.55%, its lowest since May 2023, from 6.82% from the previous week, MBA said in a report Wednesday.