Lending standards aren’t fixed. That means, depending on market conditions, getting approved for a mortgage can be easier at times and more difficult at others. Because of this, the Mortgage Bankers Association tracks mortgage credit availability each month. Any increase in its Mortgage Credit Availability Index indicates that standards are loosening and potential borrowers will have an easier time obtaining a mortgage. A decline means the opposite and indicates lenders are tightening standards. In December, the index was relatively unchanged from the month before. Joel Kan, MBA’s vice president and deputy chief economist, says higher rates have been affecting access to credit. “Mortgage credit availability was mostly unchanged in December as mortgage rates remained significantly higher than the prior two years and both refinance and purchase activity slowed dramatically,” Kan said. “The doubling of mortgage rates over the past year caused credit availability to shrink 18 percent during the same period.” (source)
