After decreasing slightly in September, mortgage credit availability jumped in October, rising 2.5% to a score of 186.7 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).
Decreases in the index score indicate that lending standards are tightening, while increases in are indicative of loosening credit.
The index was benchmarked to 100 in March 2012.
Credit availability for conventional loans increased 5.5% – however, credit for government loans was down 0.4%.
Credit availability for jumbo loans increased by 6.3% while credit for conforming loans increased 4.6%.
Joel Kan, associate vice president of economic and industry forecasting for the MBA, says the jump was “driven largely by an expansion in the supply of conventional credit, while government credit fell slightly over the month.”
“Reversing a trend from last month, lenders made more conventional and low down payment programs available to prospective borrowers,” Kan says. “This increase in supply was likely in response to a growing number of first-time home buyers in the market, as home price appreciation has slowed and wage growth has picked up.
“Jumbo credit availability also expanded last month, with the jumbo index increasing again to its highest level since the survey began.”