Based on a report from the Mortgage Bankers Association that analyzes data from ICE Mortgage Technology, U.S. mortgage credit availability decreased in June 2022, according to the Mortgage Credit Availability Index (MCAI).
The MCAI fell by 0.3 percent to 119.6 in June. 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 1.2 percent, while the Government MCAI decreased by 1.7 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 1.4 percent, and the Conforming MCAI rose by 0.6 percent.
"Mortgage credit availability decreased slightly in June, as significantly higher mortgage rates compared to a year ago slowed refinance and purchase activity and impacted the overall mortgage credit landscape. Credit availability was mixed by loan type, with the conventional index up 1.2 percent and the government index down 1.7 percent," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Although there was reduced supply of lower credit score, high LTV rate-term refinance programs, the decline was offset by increased offerings for conventional ARM and high balance loans. With higher rates and elevated home prices, more prospective buyers are applying for ARMs, but activity remains below historical averages."
Added Kan, "The decline in the government index was driven by the reduction in offerings for streamline refinance products from FHA and VA, which is the continuation of an ongoing trend reported in prior months."