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MBA: Mortgage Credit Availability Inched Downward In June

Sarah Wolak
Jul 12, 2022
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The 0.3% decrease indicates that lending standards are constricting.

KEY TAKEAWAYS
  • The Conventional MCAI increased 1.2%, while the Government MCAI decreased by 1.7%.
  • According to MBA, the decline was offset by increased offerings for conventional ARMs and high-balance loans.

Mortgage credit availability decreased in June, according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) that analyzes data from ICE Mortgage Technology. 

The MCAI fell by 0.3% to 119.6% in June. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.

The Conventional MCAI increased 1.2%, while the Government MCAI decreased by 1.7%. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 1.4%, and the Conforming MCAI rose by 0.6%.

“Mortgage credit availability decreased slightly in June, as significantly higher mortgage rates compared to a year ago slowed refinance and purchase activity and impacted the overall mortgage credit landscape," said Joel Kan, MBA's associate vice president of economic and industry forecasting. "Credit availability was mixed by loan type, with the conventional index up 1.2% and the government index down 1.7%.”

Kan continued, "Although there was reduced supply of lower credit score, high LTV rate-term refinance programs, the decline was offset by increased offerings for conventional ARM and high-balance loans. With higher rates and elevated home prices, more prospective buyers are applying for ARMs, but activity remains below historical averages.”

He added, “The decline in the government index was driven by the reduction in offerings for streamline refinance products from FHA and VA, which is the continuation of an ongoing trend reported in prior months.” 

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