The Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association that analyzes data from ICE Mortgage Technology, found that mortgage credit availability decreased by 0.3 percent to 119.6 in June.
A decline in the MCAI indicates 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,” MBA’s Associate Vice President of Economic and Industry Forecasting Joel Kan said. “Credit availability was mixed by loan type, with the conventional index up 1.2 percent and the government index down 1.7 percent. 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.”
The Conventional, Government, Conforming, and Jumbo MCAIs are constructed using the same methodology as the Total MCAI and are designed to show relative credit risk/availability for their respective index. The primary difference between the total MCAI and the Component Indices are the population of loan programs which they examine. The Government MCAI examines FHA/VA/USDA loan programs, while the Conventional MCAI examines non-government loan programs.
The Jumbo and Conforming MCAIs are a subset of the conventional MCAI and do not include FHA, VA or USDA loan offerings. The Jumbo MCAI examines conventional programs outside conforming loan limits, while the Conforming MCAI examines conventional loan programs that fall under conforming loan limits.