The Mortgage Bankers Association’s monthly Mortgage Credit Availability Index measures how easy or difficult it is for borrowers to access credit. Any increase in the index indicates loosening credit while declines are a sign that credit is becoming tighter. There are a number of factors that affect whether availability has loosened or tightened, including current lending standards and available loan programs. In July, the MCAI was mostly flat, falling just 0.3 percent from the month before. Joel Kan, MBA’s vice president and deputy chief economist, says the decline was mostly due to fewer cash-out refi programs. “One key driver of this month’s decline was a drop in cash-out refinance loan programs,” Kan said. “The 30-year fixed mortgage rate averaged … 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.” Kan also noted a decline in the number of loan programs offered by jumbo lenders. (source)
