Mortgage credit availability decreased in May according to the Mortgage Bankers Association’s Mortgage Credit Availability Index (MCAI). The MCAI fell by 3.1 percent in May, indicating that lending standards are tightening.
The Conventional MCAI decreased 2.3 percent, while the Government MCAI decreased by 3.8 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 1.5 percent, and the Conforming MCAI fell by 3.9 percent.
“Mortgage credit availability decreased for the third consecutive month, as the industry continued to see more consolidation and reduced capacity as a result of the tougher market. With this decline in availability, the MCAI is now at its lowest level since January 2013,” said Joel Kan, Vice President and Deputy Chief Economist. “The Conforming index decreased almost 4 percent to its lowest level in the history of the survey, which dates back to 2011. The Jumbo index fell by 1.5 percent last month, its first contraction in three months, as some depositories assess the impact of recent deposit outflows and reduce their appetite for jumbo loans.”
The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.).