Despite super-low mortgage interest rates, it actually got slightly harder for consumers to get a mortgage in June due to tighter credit, the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI) shows.
Mortgage credit availability decreased about 1.3% in June compared with May to reach an index score of 119.8. A decrease in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012.
Looking at mortgage credit availability by product type, credit for conventional loans saw the greatest tightening (down 2.4%), followed by conforming loans (down 1.8%), jumbo loans (down 0.9%) and government-backed loans (down 0.3%).
“Credit availability decreased over the month, driven primarily by a decrease in availability of conventional conforming loan offerings,” says Lynn Fisher, vice president of research and economics for the MBA, in a release. “In particular, a number of investors discontinued their conventional high balance seven-year adjustable-rate loan programs (agency jumbo ARM) while leaving their five-year and 10-year ARM programs unchanged.”
The MCAI analyzes data from Ellie Mae’s AllRegs Market Clarity business information tool.