Mortgage Credit Availability Tightens in June

According to Mortgage Bankers Association (MBA) Mortgage Credit Availability Index (MCAI), which analyzes data from the Ellie Mae’s AllRegs® Market Clarity® business information tool, mortgage credit availability decreased in June. The MCAI fell by -8.5% to 118.8 in June. 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 -17.1%, while the Government MCAI decreased by -1.4%. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by -11.5%, and the Conforming MCAI fell by -23.5%.

In remarks prepared for the release of the MCAI, Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said, “Mortgage credit availability in June fell to its lowest level since September 2020, ending more than half a year of increasing credit supply. The overall credit availability index remains close to 2014 lows, as mortgage credit has not recovered since the sharp downturn in the first half of 2020. The reduction in credit availability came as a result of GSE policy changes which reduced the availability of high LTV refinance loans, impacting both conforming loans and GSE-eligible high balance loans. We did see the addition of refinance programs designed to reduce costs for lower income borrowers, but the full impact of those new loan programs remains to be seen. In addition to the tightening in supply from the policy change, there was also a pullback in jumbo ARM offerings, which contributed to the lowest supply of jumbo credit since February 2021.”