Mortgage Credit Availability Tightened For Second Consecutive Month in April 2022

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 April. The MCAI declined by -3.2% to a reading of 121.1 in April.

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 0.7%, while the Government MCAI decreased by -6.5%. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 0.3%, and the Conforming MCAI rose 1.2%.

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

“Mortgage credit availability fell for the second month in a row, as lenders reacted to the jump in mortgage rates over the past two months. With the rate/term refinance business drying up, lenders have reduced the availability of government streamline refinancing programs, which are no longer as relevant of an option for many borrowers.

The conventional index slightly increased, as lenders added more ARM programs to help borrowers overcome higher rates and home prices. The ARM share in MBA’s Weekly Applications Survey has also increased this year, but it is still low when compared to the mid-2000s. Furthermore, credit availability is much tighter than it was then, both in terms of credit requirements and the types of loans offered.

Jumbo lenders are somewhat loosening credit criteria, and jumbo rates have increased less than conforming rates this year, offering more opportunities for jumbo borrowers looking to purchase a home.”