According to the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI), mortgage credit availability decreased in June, falling 8.5 percent to 118.8. This decline indicates that lending standards are tightening.
The conventional MCAI decreased 17.1 percent, with its components jumbo and conforming decreased 11.5 percent and 23.5 percent, respectively. Government MCAI also decreased by 1.4 percent.
“Mortgage credit availability in June fell to its lowest level since September 2020, ending more than half a year of increasing credit supply,” Joel Kan, MBA associate vice president of economic and industry forecasting, said in a release. “The overall credit availability index remains close to 2014 lows, as mortgage credit has not recovered since the sharp downturn in the first half of 2020.
“The reduction in credit availability came as a result of GSE policy changes which reduced the availability of high LTV refinance loans, impacting both conforming loans and GSE-eligible high balance loans,” he added. “We did see the addition of refinance programs designed to reduce costs for lower income borrowers, but the full impact of those new loan programs remains to be seen. In addition to the tightening in supply from the policy change, there was also a pullback in jumbo ARM [adjusted rate mortgage] offerings, which contributed to the lowest supply of jumbo credit since February 2021.”