Mortgage Credit Availability Declines for Fifth Consecutive Month in July, Reaching Its Lowest Level Since May 2013

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 fifth consecutive month in July. The MCAI dropped 9.0% to a reading of 108.8.

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 9.8%, while the Government MCAI decreased by 8.4%. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 13.4 %, while the Conforming MCAI fell by 3.3%.

Commenting on the MCAI for July, Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said:

“Credit availability fell last month to the lowest level since May 2013, as lenders streamlined their loan offerings in this declining volume environment. The 9 percent decline in the July index was the largest monthly decrease since April 2020. Lenders have responded accordingly to the decrease in demand for refinance and purchase loans by reducing loan offerings, including for ARMs, cash-out refinances, and investment properties.

The overall general tightening in credit availability also affected jumbo loans and non-QM loan programs.”