Mortgage credit availability declined in September to the lowest levels seen since March 2013. The MBA's mortgage credit availability index (MCAI) fell by 5.4% to 102.5 in September. A decline in the index indicates that lending standards are tightening, while increases are indicative of loosening credit. Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “With the likelihood of a weakening economy, which would lead to an increase in delinquencies, there was a smaller appetite for lower credit score and high LTV loan programs, along with a reduction in government streamline refinance programs."
The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the September 2022 Survey of Consumer Expectations, which shows that inflation expectations continued to decline in the short term, but increased slightly in the medium and longer terms. Household spending expectations fell sharply, posting their largest one month decline since the series’ inception in June 2013. Home price growth expectations continued to decline in September and are now at their lowest levels since June 2020. Households’ expectations about future credit access one year from now improved somewhat.
Potential home buyers are now paying out way more money for down payments on housing after costs doubled during the pandemic. Redfin said that soaring home prices coupled with heavy competition upped down payments but costs are beginning to decline as the housing market comes back down to more normal levels. “Home buyers don’t need to make enormous down payments anymore because they’re much less likely to encounter bidding wars now that so many Americans have bowed out of the market,” said Redfin Senior Economist Sheharyar Bokhari.
Mortgage credit availability declines. Short term inflation expectations decrease. Housing down payments surged during pandemic.
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