Mortgage rates remained high, and lending standards relaxed in November for the first time in nine months, according to the Mortgage Bankers Association (MBA). The MBA reports that the MCAI increased by 1.4% in November to 103.4. An increase in the MCAI, benchmarked at 100, shows that lending requirements are easing, while a decline in the index indicates that credit is becoming more restrictive.
In the jumbo segment in November, there was noticeable credit softening. The Jumbo MCAI increased by 3.9%, and the Conforming MCAI increased by 1% of the Conventional MCAI’s component indices. While the Government MCAI stayed steady, the Conventional MCAI grew by 2.8%.
According to Joel Kan, MBA’s vice president and deputy chief economist, the availability of jumbo credit increased by 4% since jumbo rates continued to be more affordable than rates on conforming loans. Lenders are attempting to increase their volume in this market. More ARM loan plans being provided are primarily responsible for the increase from last month. On the side of homebuyers, mortgage demand decreased in November despite rates falling after reaching a top of 7.16% the month before. Since then, rates have been down, dropping to 6.33% this week, according to Freddie Mac.
According to Fannie Mae’s predictions, the mortgage market will shrink from the anticipated $2.34 trillion this year to $1.74 trillion in 2023. After reaching 5.67 million in 2022, the agency predicts a sharp decline in single-family house sales to 4.42 million in 2019. Although mortgage rates are anticipated to decline in 2023, the outlook for the housing market is expected to worsen the following year. Click here to read more on this.
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