A measure of the availability of mortgage credit dropped to its lowest level in a decade last month as lenders sought to reduce operating costs and homeowners cut back on cash-out refinancing. The Mortgage Bankers Association said its Mortgage Credit Availability Index (MCAI), MCAI fell by 0.3 percent to 96.3 in July. A decline in the MCAI indicates that lending standards are tightening, while increases in the index indicate loosening credit. “Mortgage credit availability declined to its lowest level since 2013, as lenders pulled back on underutilized loan programs and as liquidity concerns remain for some jumbo lenders,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Declining origination volumes have led to lower profitability for many lenders, resulting in narrower loan product offerings to reduce operational costs. “One key driver of this month’s decline was a drop in cash-out refinance loan programs. The 30-year fixed mortgage rate averaged 6.94 percent in July, more than a percentage point higher than July 2022, and this has significantly discouraged cash-out refinance activity, as borrowers turn to home equity and consumer loans instead. The jumbo index fell for the third straight month , as jumbo lenders further reduce the number of available loan programs.” The MCAI has four component indices. The Conventional MCAI decreased 0.5 percent, while the Government MCAI dipped 0.1 percent. The Jumbo MCAI, one sub-index of the Conventional MCAI decreased by 0.8 percent while the second, the Conforming MCAI, rose by 0.2 percent.
Related Articles
It’s worth giving consumer credit a closer look — here’s why
November 28, 2023
Mariel Alumit
Housing Wire
Comments Off on It’s worth giving consumer credit a closer look — here’s why
HousingWire recently spoke with Mike Darne, vice president of marketing at CreditXpert, about credit optimization and how taking a closer look at consumer credit can benefit borrowers. HousingWire: You have advocated for giving consumer credit another […]
Background, Credit Checks Are Fertile Ground for Lawsuits
September 7, 2022
Allen Santos
Daily Real-estate News
Comments Off on Background, Credit Checks Are Fertile Ground for Lawsuits
Property managers and other real estate professionals routinely conduct background and credit checks in the course of business. Be vigilant: You could be sued for not adhering to federal and state regulations when gathering and […]
Blackstone sees US real estate boon from tight credit
April 21, 2023
Mark Paul Cervantes
Economy, Financial Markets, Top News
Comments Off on Blackstone sees US real estate boon from tight credit
THERE’S a silver lining to the pullback in US commercial real estate and tighter construction lending – it should act as a boon in the long term, according to Blackstone’s Jonathan Gray. While vacancy rates of […]