The availability of mortgage credit declined in January according to the Mortgage Credit Availability Index (MCAI), a report by the Mortgage Bankers Association (MBA) which analyzes data from ICE Mortgage Technology.
The MCAI fell 0.9% to 124.8 in January. A drop in the MCAI indicates that lending standards are tightening, while increases in the index indicate an easing in credit. The index was benchmarked at 100 in March 2012. The conventional MCAI decreased by 2.5%, while the government MCAI increased by 0.7%. Among the indices that make up the conventional MCAI, the MCAI Jumbo fell 1.6% and the MCAI Compliant fell 4.2%.
“Credit availability fell to its lowest level since August 2021, even as the economy and labor market continued to improve,” said Joel Kan, associate vice president of economic and industry forecasting at MBA. . “The decline in credit supply came at a time of rising mortgage rates and limited inventory, adding to the challenges some potential buyers are facing. Conforming mortgage supply fell to an all-time low since 2013, due to a decline in investor demand for loan programs aimed at borrowers with higher LTVs and lower credit rating profiles.
Kan added: “Prior to last month, there were six months of increased jumbo credit supply, driven by strong demand, rapid house price appreciation and the overall strength of the economy. . That streak of growth came to an end last month as investors reduced their willingness to buy jumbo loans and also increased credit requirements.
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