As it has every month since December, mortgage credit availability continued to decrease in May, falling 3.1% compared with April to a score of 129.3 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).
Credit availability for conventional loans decreased 5.7% while credit for government loans decreased by 0.8%.
Credit for jumbo loans fell by 4.4% while credit for conforming loans fell by 6.9%.
“Mortgage lenders in May responded accordingly to the increased risk and uncertainty in the economy,” explains Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Credit availability continued to decline, with MBA’s overall index now at its lowest level since June 2014. There was a reduction in supply across all loan types, driven by further pullback in investors’ appetites for loan programs with low credit scores and high LTVs. Credit tightening was observed at both ends of the market, with less availability of low downpayment programs designed for first-time homebuyers, as well as for conforming and non-conforming jumbo loans.”