US Mortgage Credit Availability Index Falls in August

On Thursday, the Mortgage Bankers Association (MBA) reported that mortgage credit availability fell in August, according to its Mortgage Credit Availability Index (MCAI).

The MCAI fell 1.0% to a reading of 107.3. A decline in the MCAI indicates tighter lending standards, while increases indicate looser credit. The index was benchmarked to 100 in March 2012.

The Conventional MCAI fell 1.8%, while the Government MCAI was unchanged. Within the Conventional MCAI, the Jumbo MCAI fell 2.5%, and the Conforming MCAI was unchanged.

Commenting on the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Credit availability decreased in August, as lenders reduced their offerings of loan programs that require flexible documentation, along with cash-out refinance loan. Many of these loan programs had jumbo features, which contributed to the decline in jumbo credit availability. The conforming index was unchanged and remained in a narrow range as conforming lending standards and loan offerings continue to be conservative, even as mortgage rates are at their highest levels in more than a year.”