Mortgage credit availability goes further downhill in February

MBA's credit availability index has dropped 11 times in past 12 months

With interest rates high and the real estate industry still mired in uncertainty, mortgage credit availability fell further in February to its lowest level since January 2013.

That’s according to the Mortgage Bankers Association (MBA), whose overall Mortgage Credit Availability Index (MCAI) fell by 3% from January to a reading of 100.1 in February. The MCAI was benchmarked to a reading of 100 in March 2012; increases in the index reading denote easier access to mortgage credit, while declines in the MCAI reflect tightened lending standards.

The MCAI has been on a steady decline since March 2022, when assertive interest-raising policies from the Federal Reserve began to adversely impact the real estate market. Between March 2022 and February of this year, the overall MCAI increased just once — a 1.4% increase in November as lenders sought creative ways to capture volume via products like adjustable-rate loan programs.

On a year-over-year basis, the MCAI has now fallen nearly 26 points.

Every loan type saw a monthly decline in its index reading in February, noted Joel Kan, MBA vice president and deputy chief economist.

“The conforming subindex decreased 4.3% to its lowest level in the survey, which goes back to 2011,” Kan said. “This decline was driven by the ongoing trend of shrinking industry capacity as mortgage rates stayed significantly higher than a year ago. Additionally, in this volatile rate environment and potentially weakening economy, there was also a reduction in refinance programs offered for low-credit-score and high-LTV borrowers.”

The conforming subindex is one of the component indices of the Conventional MCAI, which is itself a component of the overall MCAI. The Jumbo MCAI — the other component of the conventional index — dropped by 4.4% in February.

The Government MCAI, which makes up the other half of the overall index, decreased by 1.6%.

The MBA’s various credit availability indices are calculated from data derived from ICE Mortgage Technology.


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