Mortgage credit availability decreased in August according to the Mortgage Credit Availability Index (MCAI), a report from the
The MCAI fell by 4.7 percent to 120.9 in August. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in
“Mortgage credit supply fell to its lowest level since
Added Kan, “Jumbo credit availability has fallen around 59 percent since the pre-pandemic months, and data from
CONVENTIONAL, GOVERNMENT, CONFORMING, AND JUMBO MCAI COMPONENT INDICES
The MCAI fell by 4.7 percent to 120.9 in August. The Conventional MCAI decreased 8.7 percent, while the Government MCAI decreased by 1.4 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 8.9 percent, and the Conforming MCAI fell by 8.6 percent.
The Conventional, Government, Conforming, and Jumbo MCAIs are constructed using the same methodology as the Total MCAI and are designed to show relative credit risk/availability for their respective index. The primary difference between the total MCAI and the Component Indices are the population of loan programs which they examine. The Government MCAI examines FHA/
The Conforming and Jumbo indices have the same “base levels” as the Total MCAI (March 2012=100), while the Conventional and Government indices have adjusted “base levels” in
EXPANDED HISTORICAL SERIES
The Total MCAI has an expanded historical series that gives perspective on credit availability going back approximately 10-years (expanded historical series does not include Conventional, Government, Conforming, or Jumbo MCAI). The expanded historical series covers 2004 through 2010, and was created to provide historical context to the current series by showing how credit availability has changed over the last 10 years – including the housing crisis and ensuing recession. Data prior to
ABOUT THE MORTGAGE CREDIT AVAILABILITY INDEX
The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit.
The MCAI is 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 the AllRegs(R) Market Clarity(R) product and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time. Base period and values for total index is
The MBA updated its methodology in
To learn more about the AllRegs Market Clarity platform click here (https://nam11.safelinks.protection.outlook.com/?url=http%3A%2F%2Fmba-pa.informz.net%2Fz%2FcjUucD9taT04MDgwMTgyJnA9MSZ1PTkzMjczNjc2NiZsaT02NzQ3NTU2Nw%2Findex.html&data=02%7C01%7Cftaylor%40mba.org%7C87eede24959343de6c5208d855898f7c%7C867e5d11bde4499fb45e61572f9f337c%7C1%7C0%7C637353396607061603&sdata=qEptLhDNJDoulcFkcr%2BdSdtS%2BxXh2NvoI43caEFIyeY%3D&reserved=0).
For more information on the Mortgage Credit Availability Index, including Methodology, Frequently Asked Questions and other helpful resources, please click here (https://nam11.safelinks.protection.outlook.com/?url=http%3A%2F%2Fmba-pa.informz.net%2Fz%2FcjUucD9taT04MDgwMTgyJnA9MSZ1PTkzMjczNjc2NiZsaT02NzQ3NTU2Ng%2Findex.html&data=02%7C01%7Cftaylor%40mba.org%7C87eede24959343de6c5208d855898f7c%7C867e5d11bde4499fb45e61572f9f337c%7C1%7C0%7C637353396607071593&sdata=vhQAo9YqPFoLp9jur1ZcU%2Fs0W3%2FP9JLaEWZdhBQM25k%3D&reserved=0) or contact MBAResearch@mba.org.
Click here to view Graph: https://www.mba.org/2020-press-releases/september/mortgage-credit-availability-decreased-in-august