There was a significant loss of credit access in June. The Mortgage Bankers Association (MBA) says its Mortgage Credit Availability Index (MCAI) fell by 8.5 percent month-over-month to 118.8, its lowest level in nine months. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.

All of the MCAI components moved lower. The Conventional MCAI decreased 17.1 percent, while the Government MCAI ticked down 1.4 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI declined 11.5 percent, and the Conforming MCAI fell by 23.5 percent. 



"Mortgage credit availability in June fell to its lowest level since September 2020, ending more than half a year of increasing credit supply. The overall credit availability index remains close to 2014 lows, as mortgage credit has not recovered since the sharp downturn in the first half of 2020," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "The reduction in credit availability came as a result of GSE policy changes which reduced the availability of high LTV refinance loans, impacting both conforming loans and GSE-eligible high balance loans. We did see the addition of refinance programs designed to reduce costs for lower income borrowers, but the full impact of those new loan programs remains to be seen. In addition to the tightening in supply from the policy change, there was also a pullback in jumbo ARM offerings, which contributed to the lowest supply of jumbo credit since February 2021." 

The MCAI and each of its components are calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.). These metrics and underwriting criteria for over 95 lenders/investors are combined by MBA using data made available via a proprietary product from Ellie Mae. The resulting calculations are summary measures which indicate 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.