Mortgage credit offerings fall to a 9-year low

Abstract

For the fifth straight month, mortgage credit tightened with availability falling by the most in over two years to levels last seen over nine years ago, according to the Mortgage Bankers Association. The MBA's July Mortgage Credit Availability Index, a summary measure tracking the availability of mortgage credit, dropped 9% from the prior month to a reading of 108.8. The Conventional MCAI fell by 9.8% month over month, primarily due to decreased availability of jumbo products. Downward pressure caused by rate and affordability issues have eaten away at demand for higher-cost properties in recent months. The Jumbo MCAI, a component within the conventional index, plunged by 13.4% month over month, as more reports emerged of cuts in asking prices. After reaching a record high of $460,000 in March, the average purchase loan amount has hovered near $410,000 over the past month. The conforming component of the Conventional index fell by a smaller 3.3% margin, a month after rising by 0.6%.Government-loan product availability also declined in July, dropping by 8.4% compared to June, when it recorded a 1.7% dip.