According to the Mortgage Bankers Association’s Mortgage Credit Availability Index (MCAI) report for June, mortgage credit availability decreased, as evidenced by an 8.5 percent drop in the MCAI, to 118.8.
The data, which are gleaned from Ellie Mae’s AllRegs Market Clarity tool, show that the conventional MCAI decreased 17.1 percent, while the government MCAI decreased by 1.4 percent.
Of the component indices of the conventional MCAI, the jumbo MCAI decreased by 11.5 percent, and the conforming MCAI fell by 23.5 percent.
“Mortgage credit availability in June fell to its lowest level since September 2020, ending more than half a year of increasing credit supply,” says the MBA’s Joel Kan. “The overall credit availability index remains close to 2014 lows, as mortgage credit has not recovered since the sharp downturn in the first half of 2020.
“The reduction in credit availability came as a result of GSE policy changes which reduced the availability of high LTV refinance loans, impacting both conforming loans and GSE-eligible high balance loans,” he adds. “We did see the addition of refinance programs designed to reduce costs for lower income borrowers, but the full impact of those new loan programs remains to be seen. In addition to the tightening in supply from the policy change, there was also a pullback in jumbo ARM offerings, which contributed to the lowest supply of jumbo credit since February 2021.”