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Historic Increase in Mortgage Demand is Mitigated by Tighter Credit
Wednesday, March 11, 2020
Mortgage credit availability declined last month, and the Mortgage Bankers
Association (MBA) says it might be the result of too much of a good thing. MBA's
Mortgage Credit Availability Index (MCAI) dipped 0.3 percent from January to February
to a reading of 181.3. A decline in the Index indicates that lending standards
are tightening. Joel Kan, MBA's Associate Vice President of Economic and Industry
Forecasting said "Mortgage credit supply decreased in February, as both
conforming and jumbo segments of the market saw a decline. There were also
reductions in ARM program offerings, as well as in low credit score programs
offered by investors." Added Kan, "Last month's activity was the calm before the storm. Mortgage
rates dropped steeply in the last week of February and a large surge of
refinance activity followed. Investors may adjust their future mortgage credit
offerings based on the sudden upswing in demand."
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