The Mortgage Bankers Association (MBA) reports that mortgage credit availability decreased in July according to its Mortgage Credit Availability Index (MCAI), a report from MBA that analyzes data from ICE Mortgage Technology. The MCAI fell by 9% to 108.8 in July. A decline 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.
“Credit availability fell last month to the lowest level since May 2013, as lenders streamlined their loan offerings in this declining volume environment,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting. “The 9 percent decline in the July index was the largest monthly decrease since April 2020. Lenders have responded accordingly to the decrease in demand for refinance and purchase loans by reducing loan offerings, including for ARMs, cash-out refinances, and investment properties.”
The Conventional MCAI decreased 9.8%, while the Government MCAI decreased by 8.4%. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 13.4%, and the Conforming MCAI fell by 3.3%.
“The overall general tightening in credit availability also affected jumbo loans and non-QM loan programs,” adds Kan.
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