US Mortgage Credit Availability Tightens in June

On Tuesday, the Mortgage Bankers Association released its Mortgage Credit Availability Index (MCAI) for June. According to the MCAI, mortgage credit availability decreased.

The MCAI fell by 1.3% to a reading of 103.7 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 1.2%, while the Government MCAI decreased by 1.7%. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 0.7%, and the Conforming MCAI fell by 2.2%.

In remarks accompanying the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Credit availability decreased in June after six months of growth, primarily led by fewer programs with low minimum credit scores. There was also a reduction in streamline refinance programs. With the job market softening, and increasing mortgage delinquency rates, some lenders are tightening up their credit offerings. Jumbo credit availability decreased slightly overall relative to the previous month, but the availability of non-agency loan programs increased slightly.”