An increase in credit access was reported in April according to the Mortgage Bankers Association’s Credit Availability Index (MCAI).
The MCAI and its four components are designed to show relative credit risk/availability based on information about borrower eligibility and underwriting criteria gathered for over 95 lenders and investors and combined with data from Ellie Mae’s All Regs Market Clarity product.
The national composite default index dropped by seven basis points from February to March, its first month-over-month decline in eight months, led by declines in both mortgage default indices, according to S&P Dow Jones Indices and S&P/Experian Consumer Credit Default Indices for March 2015 released Tuesday.
The mix of recent economic data suggests the economy is growing, but more slowly than at the end of 2014.
Moreover, the signs of moderation – retail sales and March’s slower increase in payrolls – suggest that the Fed isn’t likely to raise interest rates until later in 2015 or 2016.
Economic data affects rates by motivating investors to seek out or avoid risk. Higher demand means higher prices and lower rates. Investors are looking for clarity on the Fed’s plans regarding raising rates, among other things.
From here on out, volatility becomes an increasing risk heading into the Fed’s Announcement next Wednesday. It can either work for or against us, but the point is that if it does work against us, the potential damage is bigger than normal.