Mortgage Credit Availability Tightened in August

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Mortgage credit availability decreased in August, falling 3.9% to a score of 181.7 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).

Credit availability for conventional loans decreased 3.6% while credit availability for government loans fell by 4.1%.

Within the conventional category, credit for jumbo loans decreased by 3.2% while credit for conforming loans fell by 4.3%.

A decrease in the index score indicates that lending standards are tightening, while increases are indicative of loosening credit.

The index was benchmarked to 100 in March 2012.

“Credit supply declined across the board in August, even as mortgage rates fell and application activity picked up, particularly for refinances,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Last month’s decrease was the largest since December 2018, and also the first tightening we have seen for conventional loans all year. We anticipate some weakening of the job market in the year ahead as economic growth cools. It’s possible some lenders may be tightening credit in expectation of a slowdown.”

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