Mortgage credit availability ended 2019 with a whimper, according to the Mortgage Credit Availability Index (MCAI) report published by the Mortgage Bankers Association (MBA).
During December, the MCAI took a 3.5 percent drop
to end the year at 182.2. The Conventional MCAI decreased 1.4 percent and its component indices–the Jumbo MCAI and Conforming MCAI–took a 1.3 percent and 1.6 percent drop, respectively. The Government MCAI tumbled by 6.1 percent.
“Credit availability fell in December after three months of expansion, driven by drops in both conventional and government supply,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Perhaps most noteworthy was a 6 percent drop in government credit supply because of changes to the Veterans Administration (VA) loan program, which eliminated loan limits for certain borrowers as of Jan 1, 2020. This likely prompted many investors to remove VA programs in high cost counties from their offerings. There was also a reduction in streamline refinance programs, as slightly higher rates slowed the refinance market at the end of 2019.”