Mortgage Credit Availability Declines in November

According to the latest Mortgage Bankers Association’s Mortgage Credit Availability Index (MCAI), which analyzes data from Ellie Mae’s AllRegs® Market Clarity® business information tool, mortgage credit availability declined in November. The MCAI fell by -0.6% in November to a reading of 124.9.

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 1.9%, while the Government MCAI decreased by -2.7%. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 3.0%, and the Conforming MCAI rose by 0.2%.

In a statement prepared for the release of the November MCAI, Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said, “Credit availability in November was down slightly, even as the housing market continues to thrive amidst the improving job market. However, the picture was different depending on the market segment. An increase in conventional credit availability was offset by a decrease in government credit, as lenders reduced their offerings of government loan programs with lower credit scores, as well as those for investment homes.”

“Credit supply for jumbo loans increased for the fifth straight month,” Kan added. “Lenders scaled back on jumbo supply at the onset of the pandemic, and even with the recent growth in credit availability, the jumbo index remains more than 40 percent below February 2020 levels. As home-price growth continues, and mortgage rates creep higher, increased credit availability is needed for qualified borrowers looking to purchase a home — especially for first-time homebuyers, who rely heavily on government mortgage programs.”