Mortgage credit availability fell 8.5% to 118.8 in June – suggesting that lending standards are tightening every year Association of Mortgage Bankers Mortgage Credit Availability Index.
It’s the lowest MCAI level – the 100 used as the benchmark – as of September 2020 and ends more than six months of rising loan offerings, according to Joel Kan, associate vice president of Economic and Industry Forecasting at MBA.
“Mortgage lending has not recovered since the sharp downturn in the first half of 2020,” Kan said. “The reduction in credit availability was the result of GSE policy changes – which reduced the availability of high LTV refinancing loans, affecting both compliant and GSE-eligible high-balance loans.”
The conventional MCAI decreased 17.1% and the state MCAI 1.4%. Of the conventional MCAI component indices, the Jumbo MCAI declined 11.5%, and the conforming MCAI that included loans Fannie Mae and Freddie Mac decreased by 23.5%.
Kan added that the “full impact” of new loan programs remains to be seen.
“In addition to the supply shortage due to the policy change, there has also been a pullback in Jumbo ARM offerings, contributing to the lowest jumbo loan supply since February 2021,” he said.
After weeks Mortgage application The MBA reported yesterday that the total number of applications rose a whopping 16% in a week, driven by a drop in mortgage rates and an incentive for homeowners to lock in a refi.
On the buy side, the sheer amount of bidding battles decreased May through June, according to a study published by Redfin this week, as more homes have slowly come onto the market over the past month. The total inventory is still low, of course, but a slowdown in the market could soon lead to more prospective buyers and an increase in mortgage applications, experts said.
Last year, the jumbo credit index at that time was 54% lower than in February 2020. Securing a jumbo loan was the most difficult in four years. according to MBA data. But a thriving housing market gave way to jumbos from a wide variety of lenders, including Rocket mortgage and United wholesale mortgage.