Mortgage credit availability plunges to nine-year low

ACredit availability fell last month to the lowest level since May 2013, as lenders streamlined their loan offerings in this declining volume environment,” said Joel Kan, associate vice president of economic and industry forecasting at MBA. “The 9% decline in the July index was the largest monthly decrease since April 2020. Lenders have responded accordingly to the decrease in demand for refinance and purchase loans by reducing loan offerings, including for ARMs, cash-out refinances, and investment properties.”

Kan noted that the general tightening in credit availability also affected jumbo and non-QM loan programs.

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According to MBA, the credit supply of jumbo loans was down by 13.4% and the availability of conforming loans dwindled by 3.3%. Overall, the Conventional MCAI plunged by 9.8%, while the government index plummeted by 8.4%.