Fannie Mae’s Mortgage Credit Availability Index (MCAI) declined for the fourth straight month in June. The index, which measures the available credit offerings for home financing, fell 1.3%. Is this more bad news for the housing market?
The drop is primarily due to decreased credit offerings for conventional high balance loans. This was mainly due to the discontinuance of 7-year, agency eligible, high balance ARMS by some investors. It’s probably not a big seller under present rate conditions.
Although this index shows a decline, I believe many lenders still have plenty of loan programs available to provide financing to potential home buyers, and those wishing to refinance. Elimination of a 7 year ARM shouldn’t have any real negative effects.
Neither dismal employment numbers in April, nor improved jobs in May, did anything to improve the outlook for the housing market. We hear the economy is improving, but not enough for the Fed to increase rates; not just yet. Seems our economy is just treading water.
Regardless, there are still plenty of consumers out there who want to buy a home or refinance. Rates are low and lenders have the programs and know-how to get them what they need.
Do you believe the availability of mortgage credit is declining? Do you have the programs and the money to lend to those in need? If so, get the word out. Business may be a little scarce so it’s important to make the most of each opportunity.
Utilize technology, and all resources available, to minimize the costs to originate quality compliant loans, and ensure they are purchased once closed. Lenders finding the right way to do so will be fine, regardless of the indexes and market naysayers.