Mortgage credit availability continued to tightened for a seventh straight month in September, decreasing 5.4% compared with August to a score of 102.5 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).
Credit availability for conventional loans decreased 4.9%, while credit for government loans decreased by 5.7%.
Within the conventional category, credit availability for jumbo loans decreased by 5.8% while credit for conforming loans fell by 3.6%.
“Credit availability fell to the lowest level since March 2013 – the seventh consecutive month of tightening,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a release. “With the likelihood of a weakening economy, which would lead to an increase in delinquencies, there was a smaller appetite for lower credit score and high LTV loan programs, along with a reduction in government streamline refinance programs.
“As mortgage rates have more than doubled over the past year, resulting in a drop in refinance activity, lenders have worked to reduce excess capacity and costs by eliminating underutilized loan programs,” Kan adds. “All the component indices declined last month, with most of the indices falling to their lowest levels in over a year. In particular, the government credit availability index has declined in seven of the last eight months to its lowest level since April 2013.”
The index was benchmarked to 100 in March 2012.
Photo: Tierra Mallorca