Mortgage Credit Availability Declines in March as Lending Standards Tighten

According to the latest Mortgage Bankers Association (MBA) Mortgage Credit Availability Index (MCAI), which analyzes data from the ICE Mortgage Technology, mortgage credit availability decreased in March.

The MCAI declined by -0.7% to a reading of 125.1 in March. 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 increased 0.3%, while the Government MCAI decreased by -1.6%. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 1.5%, but the Conforming MCAI declined by -1.9%.

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

“Overall credit availability was down slightly in March, driven by a reduction in higher LTV, lower credit score programs. Credit availability has gradually trended higher since mid-2021 but remains around 30 percent tighter than it was in early 2020. There were also mixed trends for the various loan categories, as conventional loan credit availability increased for the second month in a row, while government credit supply decreased to its tightest level since February 2014. Additionally, jumbo credit expanded for the tenth time in the past 12 months but remained almost 40 percent lower than the pre-pandemic level.”