Mortgage credit availability dropped in April to a level not seen since January 2013, according to the latest Mortgage Credit Availability Index (MCAI) report from the Mortgage Bankers Association (MBA).
The MCAI dipped by 0.9% to 99.6 in April – the index was benchmarked at 100 in March 2012. The Conventional MCAI inched up by 0.5% and its two components offered mixed data: the Jumbo MCAI increased by 1.5% and the Conforming MCAI was down by 1.1%. The Government MCAI took a 2.1% tumble.
“Mortgage credit availability declined in April to the lowest level since January 2013, reflecting the tightening in broader credit conditions stemming from recent banking sector challenges and an uncertain economic outlook,” said Joel Kan, MBA’s vice president and deputy chief economist. “The contraction was driven by reduced demand for loan programs such as certain adjustable-rate mortgages loans, cash-out and streamline refinances, and those with lower credit score requirements.”
“Government credit supply decreased for the third consecutive month, as industry capacity continues to adjust to significantly reduced origination volume, along with the expectations of a weakening economy later this year,” added Kan. “Even with high mortgage rates and reduced credit availability, the lack of for-sale inventory continues to be the biggest hurdle to more home purchase growth this year.”
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