The Mortgage Bankers Association’s (MBA) mortgage credit availability index (MCAI) revealed lending standards are tightening. The MCAI fell by 0.6 percent in November 2021, down to 124.9.
“Credit availability in November was down slightly, even as the housing market continues to thrive amidst the improving job market,” MBA Associate Vice President of Economic and Industry Forecasting Joel Kan said. “However, the picture was different depending on the market segment.”
The conventional MCAI increased 1.9 percent, with its component indices increasing by 3 percent for the jumbo MCAI and 0.2 percent for the conforming MCAI. In contrast, the government MCAI decreased by 2.7.
“An increase in conventional credit availability was offset by a decrease in government credit, as lenders reduced their offerings of government loan programs with lower credit scores, as well as those for investment homes,” Kan said. “Credit supply for jumbo loans increased for the fifth straight month. Lenders scaled back on jumbo supply at the onset of the pandemic, and even with the recent growth in credit availability, the jumbo index remains more than 40 percent below February 2020 levels.
“As home-price growth continues, and mortgage rates creep higher, increased credit availability is needed for qualified borrowers looking to purchase a home – especially for first-time homebuyers, who rely heavily on government mortgage programs.”