US Mortgage Credit Availability Dips as Rates Top 7%
The Mortgage Bankers Association reports a slight decrease in mortgage credit availability for September as lenders tighten loan requirements and interest rates rise.
Mortgage credit availability in the United States decreased slightly in September, according to the Mortgage Bankers Association's Mortgage Credit Availability Index. The index fell 0.2% to a reading of 107.1, a shift driven primarily by a 0.4% decline in conventional loan offerings.
Joel Kan, vice president and deputy chief economist of the Mortgage Bankers Association, noted that lenders tightened documentation requirements for conventional loans and reduced offerings for investor home purchases and cash-out refinances. Jumbo loan programs also saw a 0.3% decline, marking the second consecutive monthly decrease, although non-agency loan programs continued to provide some support to that segment. Government-backed mortgage indices remained unchanged during this period.
This tightening coincided with a rise in average 30-year fixed-rate mortgage loans, which increased by approximately 50 basis points to exceed 7%. These rising costs contributed to a 4.2% drop in mortgage applications for the week ending October 2.
