Mortgage credit availability in US rise in September: Report

By Ovunc Kutlu

ISTANBUL (AA) - Mortgage credit availability in the US increased in September, the Mortgage Bankers Association (MBA) said on Tuesday.

The Mortgage Credit Availability Index (MCAI) rose by 0.6% to reach 97.2 in September, the MBA said in a report.

A decline in the MCAI indicates that lending standards are tightening, while increases in the index signal loosening credit.

"Credit availability increased slightly in September, as lenders increased their loan offerings marginally to meet the changing needs of borrowers who are facing higher mortgage rates," said MBA Vice President and Deputy Chief Economist Joel Kan.

"Industry capacity has declined significantly since the peak originations months in 2021, and MBA expects to see further declines in originations volume, given the high interest rate environment and typical seasonal slowdown," he added.

The MBA joined the National Association of Realtors (NAR) and National Association of Home Builders (NAHB) in a letter sent to the Federal Reserve on Monday, calling for the central bank to halt rate hikes.

The Fed's current monetary tightening has "exacerbated housing affordability and created additional disruptions for a real estate market that is already straining to adjust to a dramatic pullback in both mortgage origination and home sale volume," said the letter.

The three groups asked Fed Chair Jerome Powell to state that the central bank does not contemplate further rate hikes; and it will not sell off any of its mortgage-backed securities holdings, which are around $2.6 trillion, until the housing market stabilizes.

"Housing activity accounts for nearly 16% of GDP according to NAHB estimates. We urge the Fed to take these simple steps to ensure that this sector does not precipitate the hard landing the Fed has tried so hard to avoid," the letter said.