HousingWireHousingWire
Mortgage lenders increased their credit supply in May 2025 to the highest level in almost three years, according to data released Tuesday by the Mortgage Bankers Association (MBA).
“Credit supply increased to its highest level since August 2022, driven by growth in the supply of both conventional and government loans, as lenders offered a greater variety of loan types to support the spring homebuying season,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.
The Mortgage Credit Availability Index (MCAI), a report based on data from ICE Mortgage Technology, rose by 2.1% in May to a reading of 105.1, indicating that lenders loosened credit supply. Conversely, when the index declines, it means lending standards are tightening.
Government loan supply increased by 2.9% to the highest level since November 2023. According to Kan, this was mainly driven by more offerings of Federal Housing Administration (FHA) and U.S. Department of Veteran Affairs (VA) adjustable-rate mortgages (ARMs), along with streamline refinances programs.
Meanwhile, conventional lenders increased their offerings by 1.6% to the highest level since June 2022. Jumbo loans — those that exceed Fannie Mae‘s and Freddie Mac‘s baseline conforming loan limit of $806,500 for one-unit properties — rose faster (+2.1%) than conforming loans (+0.5%), mainly because of the increase in nonqualified mortgage programs.
In May, top mortgage lenders launched new products, with Rate investing in a new suite of non-QM loans and United Wholesale Mortgage offering 5/1 ARMs for FHA and VA loans.
May was also marked by an increase in mortgage rates, renewing calls for benchmark rate cuts by the Federal Reserve even as home purchase demand is stronger than it was a year ago. At HousingWire’s Mortgage Rates Center, 30-year conforming loan rates averaged nearly 7% in late May.
