December Mortgage Credit Availability Down 7%
Mortgage credit availability fell to its lowest level in nearly two years in December as lending standards tightened, the Mortgage Bankers Association reported this morning.
The MBA Mortgage Credit Availability Index decreased by 7.3 percent to 175.0 in December, its lowest level since February 2017. The Conventional MCAI decreased (14.5 percent) and the Government MCAI increased slightly (0.1 percent). Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 14.9 percent, while the Conforming MCAI decreased by 14.0 percent.
“The decline was driven by a sharp decrease in the conventional credit space, as we saw expiration of the Home Affordable Refinance Program,” said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. “The expiration of HARP also significantly impacted the availability of credit for both conforming non-jumbo and jumbo loans.”
The report analyzes data from Ellie Mae’s AllRegs Market Clarity business information tool. 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.
Expanded Historical Series
The Total MCAI has an expanded historical series, which gives perspective on credit availability going back 10 years (expanded historical series does not include Conventional, Government, Conforming or Jumbo MCAI). The expanded historical series covers 2004 through 2010, and was created to provide historical context to the current series by showing how credit availability has changed over the past 10 years–this includes the housing crisis and ensuing recession. Data prior to March 31, 2011, was generated using less frequent and less complete data measured at six-month intervals and interpolated in the months between for charting purposes. Methodology on the expanded historical series from 2004 to 2010 has not been updated.
About the Mortgage Credit Availability Index
The MCAI provides the only standardized quantitative index solely focused on mortgage credit.
The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.). These metrics and underwriting criteria for more than 95 lenders/investors are combined by MBA using data made available via the AllRegs Market Clarity product and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time.
Base period and values for total index is March 31, 2012=100; Conventional March 31, 2012=73.5; Government March 31, 2012=183.5.
To learn more about the Ellie Mae AllRegs Market Clarity platform visit http://answers.allregs.com/MCAI-Market-Clarity. For more information on the Mortgage Credit Availability Index, including Methodology, Frequently Asked Questions and other helpful resources, visit www.mba.org/MortgageCredit or contact MBAResearch@mba.org.
