It Hasn’t Been This Hard to Get a Mortgage in 6 Years
WASHINGTON – Mortgage credit in August was the tightest in more than six years as a weak economy prompted lenders to tighten standards, according to the Mortgage Bankers Association (MBA).
The MBA's Mortgage Credit Availability Index (MCAI) fell 4.7% to 120.9 last month, the lowest since March 2014.
The drop in the availability of credit was "driven by a reduction in supply from both conventional and government segments of the market," said Joel Kan, an MBA associate vice president.
Measuring credit availability by loan type, the Conforming MCAI that tracks loans backed by Fannie Mae and Freddie Mac fell 8.6% to the lowest in the data series that goes back to 2011.
The Jumbo MCAI measuring high-balance loans fell 8.9%, and the Conventional MCAI that measures loans not backed by the government fell 8.7%. The Government MCAI that includes mortgages backed by the Federal Housing Administration, Veterans Affairs, and the U.S. Department of Agriculture fell by 1.4%.
Even with tighter standards, the lowest mortgage rates on record will push home lending this year to a 15-year high of $3 trillion, MBA said in an Aug. 20 forecast, and refinancing probably will reach $1.7 trillion, the most since 2003.
Source: HousingWire (09/10/20) Howley, Kathleen
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