Availability of mortgage credit at lowest since March 2013

The Mortgage Bankers Association (MBA) collects data on borrower eligibility (FICO, loan type, LTV, etc.) and combines it with underwriting guidelines to determine if mortgages are getting easier or harder to get . The result is the Mortgage Credit Availability Index (MCAI), and it fell to its lowest level since March 2013 today.

Is this big news? Not entirely. The most recent update was not a major departure from the previous figure, with October falling 0.5% to an index value of 102.

“Much higher mortgage rates and deteriorating outlook for the housing market and the economy are driving the continued tightening of credit availability,” said Joel Kan, vice president and deputy chief economist at MBA. “Lenders continue to reduce capacity and eliminate certain loan offerings, including certain types of refinance loan products and others that require less than full documentation from the borrower.

At the sub-component level, the conventional index was down 1.5%, led by the jumbo sector, while the government index was down just 0.5%. Here’s a visual on how the subcomponents have behaved over time:

The MBA also offers an expanded historical series that provides context for the housing crisis. This is a great chart to discuss with people who are worried about some sort of retaliation in the event of a mortgage meltdown.

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