Mortgage Credit Loosens Slightly In July

Mortgage credit was slightly more available last month after tightening every other month of the year to date, according to the Mortgage Credit Availability Index released by the Mortgage Bankers Association.

The MCAI rose by 1.5 percent to 126.9 in July. The Conventional MCAI increased 2.9 percent, while the Government MCAI increased by 0.4 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 5 percent, and the Conforming MCAI rose by 1.2 percent.

“Credit availability rose slightly in July – the first increase in eight months – as the supply of certain types of adjustable rate mortgages and jumbo loans increased. The improvement was more of a leveling off from the precipitous drop earlier this spring. Credit availability is still over 30 percent lower than a year ago and near its lowest level since 2014,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The July data signals that lenders saw conditions improve this summer, as forbearance requests flattened, and record-low mortgage rates spurred strong levels of purchase and refinance activity.”