Mortgage credit access rose slightly in May to reflect credit underwriting conditions roughly even with April levels, the Mortgage Bankers Association (MBA) reported Tuesday.
The MBA’s Mortgage Credit Availability Index (MCAI), which tracks tightening and loosening credit conditions across the mortgage market, rose by 0.1% to 108 in May, a sign of stabilization after the index slid 0.4% the previous month.
“Mortgage rates reached nine-month highs over the month, which put pressure on homebuyers and reduced the demand for refinancing,” Joel Kan, deputy chief economist of the MBA, commented in the report. “Given the economic uncertainty and rate volatility, lenders held their loan program offerings fairly stable.”
The MCAI represents an aggregate measure of consumer access to mortgage financing, calculated using variables related to borrower eligibility like credit scores and loan-to-value ratios, as well as loan types offered by lenders.
May marked the third full month of the ongoing war with Iran, started by the U.S. and Israel on the last day of February. The conflict has triggered global energy supply and trade shocks that have pushed inflation in the U.S. sharply higher since the war began.
Heightened volatility and investor concerns that enduring impacts from the war will entrench inflation higher for longer sent yields on 10-year U.S. Treasury bonds soaring to 4.66% in mid-May, their highest level since the start of 2025. Mortgage rates on typical 30-year home loans spent most of May above 6.5% as a result, according to MBA data.
But the MBA’s index of credit availability, which analyzes data from ICE Mortgage Technology, suggests that lenders kept their underwriting criteria and loan programs steady after they tightened conditions in April. A decline in the index signals that lending standards are tightening, while an increase indicates loosening access.
The conventional component index, which tracks credit access for loans that meet Fannie Mae and Freddie Mac underwriting guidelines, rose 0.2% in May. The component index tracking access to government mortgages insured by the Federal Housing Administration, U.S. Department of Agriculture and Department of Veterans Affairs was unchanged.
Within the conventional component index, the jumbo MCAI rose 0.3%, reflecting loosening credit conditions for borrowers seeking loans higher than the conforming mortgage limits set by Fannie and Freddie. The conforming component index was unchanged in May.
