Overall Mortgage Credit Is Tightening

Mortgage credit is tightening — and it’s not. The Mortgage Bankers Association’s Mortgage Credit Availability Index (MCAI) decreased in March overall, but certain categories increased.

“Overall credit availability was down slightly in March, driven by a reduction in higher LTV (loan-to-value), lower credit score programs,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Credit availability has gradually trended higher since mid-2021, but remains around 30% tighter than it was in early 2020.

“There were also mixed trends for the various loan categories," he continued, "as conventional loan credit availability increased for the second month in a row, while government credit supply decreased to its tightest level since February 2014. Additionally, jumbo credit expanded for the 10th time in the past 12 months, but remained almost 40% lower than the pre-pandemic level.”

Overall, the MCAI fell by 0.7% to 125.1 in March. 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 0.3%, while the Government MCAI decreased by 1.6%. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 1.5%, and the Conforming MCAI fell by 1.9%.