Mortgage Credit Availability Declines for Eighth Consecutive Month in October

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 for the eighth consecutive month in October.

The MCAI declined 0.5% to a reading of 102.0 in October. 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 1.5%, while the Government MCAI increased by 0.4%. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 2.5%, while the Conforming MCAI was unchanged.

Providing additional background and his analysis, Joel Kan, MBA’s Vice President and Deputy Chief Economist, said:

“Mortgage credit availability declined for the eighth straight month in October to its lowest level since March 2013. Much higher mortgage rates and the worsening outlook for the housing market and economy are behind the continued tightening in credit availability. Lenders continue to reduce their capacity and are eliminating some loan offerings, including certain types of refinance loan products and others that require less than full borrower documentation.”