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Mortgage credit availability remained unchanged in June

Availability climbed by 0.1% in June, remaining close to the lowest level since early 2013

Mortgage credit availability barely increased in June as the industry continues to operate at reduced capacity. This is a consequence of persistently high mortgage rates resulting in lender consolidation as well as a decline in mortgage applications, the Mortgage Bankers Association said.

The trade group’s monthly Mortgage Credit Availability Index rose by 0.1% to 96.6 last month. A decline of the index, benchmarked to 100 in March 2012, indicates that lending standards are tightening while an increase suggests loosening credit.

“Mortgage credit availability was essentially unchanged in June, remaining close to the lowest level since early 2013, as the industry continues to operate at reduced capacity,” said Joel Kan, MBA’s vice president and deputy chief economist. “Lenders are streamlining their operations by offering fewer loan programs, with some exiting certain channels. Data from our Weekly Applications Survey indicated that June mortgage applications were more than 30 percent lower than a year ago and at the slowest pace since December 2022.”

Both the Conventional MCAI, which does not include loans backed by the government and the Government MCAI, which examines FHA, VA, and USDA loan programs, were unchanged. 

Of the two component indices of the conventional index, the Jumbo MCAI fell by 0.2% and the Conforming MCAI rose by 0.2%.

“The Jumbo Index declined slightly by 0.2 percent – the second straight monthly decrease – as liquidity conditions have been tightening for jumbo lending,” added Kan. 

The drop in mortgage credit availability follows a spike in mortgage rates last week, which rose to 6.81% as of July 6, according to Freddie Mac.

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