Mortgage Credit Availability Declined for the Third Consecutive Month in May 2022

According to the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI) report, which analyzes data from the ICE Mortgage Technology, Mortgage credit availability declined in May 2022.

The MCAI declined -0.9% to a reading of 120.0 in May. The MBA notes that 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.

The Conventional MCAI decreased -0.4%, while the Government MCAI decreased by -1.3%. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by -1.1 %, while the Conforming MCAI rose by 1.0%.

In a statement prepared to accompany the release of the MCAI for May, Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said:

“Mortgage credit supply declined for the third month in a row to the lowest level since July 2021. The index remains more than 30 percent below pre-pandemic levels, as recent months’ credit tightening has occurred in refinance loan programs.

Last month’s tightening was most notable in the government and jumbo segments of the mortgage market. The decrease in government credit was driven mainly by a reduction in streamline refinance programs, as mortgage rates increased sharply through May, slowing refinance activity. Jumbo credit availability, which was starting to see a more meaningful recovery from 2020’s pullback, declined after three months of expansion.”