Mortgage Credit Availability Tightened in August 


Mortgage credit availability tightened slightly in August compared with July, as investors reduced their offerings of ARM and non-QM loan programs.

As a result, the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI) fell by 0.5% to a score of 108.3.

Mortgage credit availability for conventional loans decreased 1.0%, while credit for government loans remained essentially unchanged.

Credit availability for jumbo loans decreased by 0.7% while credit availability for conforming loans fell by 1.2%.

“With overall origination volume expected to shrink in 2022, some lenders continue to streamline their operations by dropping certain loan programs to simplify their offerings,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Additionally, with a worsening economic outlook and signs of cooling in home-price growth, the appetite for riskier loan programs has been reduced.

“Slightly offsetting these trends, however, was a small increase last month in new HELOC products,” Kan adds. “With aggregate home equity still at elevated levels, HELOCs could benefit borrowers who might not want to give up on their current, low mortgage rate but do want to utilize their home equity to support other spending plans.”

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