Mortgage credit availability decreased 0.3% in June to a score of 119.6 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index.
Credit availability for conventional loans increased 1.2%, while credit for government loans decreased 1.7%.
Of the component indices of the conventional index, credit for jumbo loans increased by 1.4% and credit for conforming loans increased 0.6%.
“Mortgage credit availability decreased slightly in June, as significantly higher mortgage rates compared to a year ago slowed refinance and purchase activity and impacted the overall mortgage credit landscape,” says Joel Kan, Associate Vice President of Economic and Industry Forecasting for the MBA, in a statement. “Credit availability was mixed by loan type, with the conventional index up 1.2 percent and the government index down 1.7 percent.”
“Although there was reduced supply of lower credit score, high LTV rate-term refinance programs, the decline was offset by increased offerings for conventional ARM and high balance loans,” Kan says. “With higher rates and elevated home prices, more prospective buyers are applying for ARMs, but activity remains below historical averages.”
“The decline in the government index was driven by the reduction in offerings for streamline refinance products from FHA and VA, which is the continuation of an ongoing trend reported in prior months,” Kan adds.
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.
Photo: Tierra Mallorca
