Mortgage credit availability plummeted in April, falling 12.2% to a score of 133.5 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).
Credit availability for conventional loans dropped 15.2%, while credit for government loans tumbled 9.5%.
Credit for jumbo loans fell a whopping 22.6% while credit for conforming loans decreased 7.1%.
“The abrupt weakening of the economy and job market – and the uncertainty in the outlook – drove credit availability down in April for the second consecutive month,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “The overall index fell to its lowest level since December 2014, and the sub-indexes pointed to tightened credit supply for all loan types. The decline was largely driven by lenders dropping many low credit score and high-LTV programs, as well as further reduction in jumbo and non-QM products.
“There was also a large decline in loan offerings pertaining to cash-out refinances, given the GSEs’ constraints in purchasing cash-outs that have fallen into forbearance,” Kan adds.