In February, there is an even steeper decline in the availability of mortgage loans 2023

As a result of rising interest rates and continued unpredictability in the real estate market, the availability of mortgage loans continued to decline in February, reaching its lowest point since January 2013.

According to the Mortgage Bankers Association (MBA), this is the case. In February, the MBA’s overall Mortgage Credit Availability Index (MCAI) saw a decrease of 3.0%, giving it a value of 100.1. Increases in the index reading indicate better access to mortgage credit, while decreases in the MCAI represent tighter lending criteria. The MCAI was benchmarked to a value of 100 in March of 2012; this reading serves as a reference point for the index.

Since March of last year, when aggressive interest-raising measures from the Federal Reserve began to have a negative influence on the real estate market, the MCAI has been in a steady drop and has continued to fall since that time. The total MCAI climbed just once between March 2022 and this past February: a 1.4% rise in November as lenders explored innovative methods to capture volume via products such as adjustable-rate loan programs. This is the only time the overall MCAI increased over this time period.

The MCAI has now dropped roughly 26 points as compared to the previous year.

According to Joel Kan, vice president, and deputy chief economist at the MBA, every single form of the loan had a monthly reduction in its index value in the month of February.

“The complying subindex plummeted 4.3 percent to its lowest level in the poll, which dates back to 2011,” said Kan. “This is the lowest level we’ve seen since we began tracking it in 2011.” “This reduction was driven by the continuous trend of declining industry capacity while mortgage rates stayed much higher than they were a year ago,” the author writes. “This decline was caused by the ongoing trend of shrinking industry capacity.” In addition, there was a drop in the number of refinance programs that were given to customers with poor credit scores and high loan-to-value ratios. This was because of the fluctuating rate environment and the potentially declining economy.

One of the component indices that makes up the Conventional MCAI, which in turn is one of the components that makes up the overall MCAI, is the conforming subindex. The other component of the conventional index, the Jumbo MCAI, had a decrease of 4.4% during the month of February.

The Government MCAI, which is responsible for the remaining half of the overall index, had a fall of 1.6%.

Calculations for the different credit availability indexes maintained by the MBA are carried out using data obtained from ICE Mortgage Technologies.