Mortgage application activity and credit availability declined in the latest data reports from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, decreased 10% on a seasonally adjusted basis for the week ending July 11 compared to one week earlier. On an unadjusted basis, the index increased 13% compared with the previous week.
The seasonally adjusted Purchase Index decreased 12% from one week earlier while the unadjusted index increased 11% compared – the latter was also 13% higher than the same week one year ago. The Refinance Index decreased 7% from the previous week, although it was 25% higher than the same week one year ago, while the refinance share of mortgage activity increased to 41.1% of total applications from 40% the previous week.
Among the federal programs, the FHA share of total applications increased to 19% from 17.9% the week prior while the VA share of total applications decreased to 12.6% from 13% and the USDA share of total applications decreased to 0.5% from 0.6%.
Separately, the MBA’s Mortgage Credit Availability Index (MCAI) dropped by 1.3% to 103.7 in June; the index was benchmarked to 100 in March 2012. The Conventional MCAI decreased 1.2% while the Government MCAI decreased by 1.7%. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 0.7% and the Conforming MCAI fell by 2.2%.
“Credit availability decreased in June after six months of growth, primarily led by fewer programs with low minimum credit scores,” said Joel Kan, MBA’s vice president and deputy chief economist. “There was also a reduction in streamline refinance programs. With the job market softening, and increasing mortgage delinquency rates, some lenders are tightening up their credit offerings. Jumbo credit availability decreased slightly overall relative to the previous month, but the availability of non-agency loan programs increased slightly.”
