Mortgage Credit Availability at 10-Year Low
Mortgage credit availability fell in February to its lowest level in more than 10 years, the Mortgage Bankers Association reported Tuesday.
The MBA Mortgage Credit Availability Index fell by 3.0 percent to 100.1 in February. The Conventional MCAI decreased 4.4 percent, while the Government MCAI decreased by 1.6 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 4.4 percent and the Conforming MCAI fell by 4.3 percent.
“Mortgage credit availability decreased to its lowest level since January 2013with all loan types seeing declines in availability over the month,” said Joel Kan, MBA Vice President and Deputy Chief Economist. “The conforming subindex decreased 4.3 percent to its lowest level in the survey, which goes back to 2011. This decline was driven by the ongoing trend of shrinking industry capacity as mortgage rates stayed significantly higher than a year ago. Additionally, in this volatile rate environment and potentially weakening economy, there was also a reduction in refinance programs offered for low credit score and high LTV borrowers.”
The MCAI analyzes data from ICE Mortgage Technology. 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.
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 ICE Mortgage Technology, 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.
