Mortgage credit availability tightens slightly in September

Mortgage credit availability in the U.S. saw a slight decrease in September, with the Mortgage Credit Availability Index (MCAI) falling 0.2% to a reading of 107.1, according to the Mortgage Bankers Association (MBA).

A decline in the MCAI signifies a tightening of lending standards. The Conventional MCAI dropped by 0.4%, and within that, the Jumbo MCAI decreased by 0.3%, marking its second consecutive monthly decline. The Conforming MCAI also fell by 0.2%. Meanwhile, the Government MCAI remained unchanged.

Joel Kan, MBA’s vice president and deputy chief economist, stated that lenders tightened documentation requirements for conventional loans and reduced offerings for cash-out refinances and investor home purchases. He also noted that jumbo loan programs were affected by this tightening, though recent growth in nonagency loan programs provided support for that market segment.

The MCAI, which uses data from over 95 lenders and investors, incorporates factors such as borrower credit scores, loan types, and loan-to-value ratios.