"Credit availability declined in December to the lowest level since 2012, as ongoing industry consolidation is resulting in more loan programs being removed from the marketplace," said Joel Kan, the MBA's deputy chief economist, in a press release.

Credit availability shrunk even as mortgage rates went from 7.79% the week of Oct. 26 and 7.22% for Nov. 30 to end last year at 6.62%, according to Freddie Mac. 

But the countering force of industry reductions took its toll. In the third quarter of 2023, independent mortgage bankers lost $1,015 per loan produced and Marina Walsh, the MBA's vice president of industry analysis at the time reiterated an earlier statement that she did not see a turnaround in that until the second quarter.

Furthermore, at the group's annual convention in October, Walsh said more capacity remained to be wrung out of an industry that already dealt with large headcount reductions.

Both components of the MCAI, conventional and government, dropped during December compared with November. The conventional portion was down by 3.2%, with its conforming subindex 5.9% lower, while the jumbo part was down by 1.3%.

"The decrease in the government index was driven by lower investor demand for renovation loans and streamline refinance loans," Kan explained. This component was 5.9% lower in December from November.

The indices were set at 100 for credit conditions that existed in March 2012. The data comes from a program database maintained by ICE Mortgage Technology.

December marked the ninth consecutive month that the MCAI was below that benchmark level.