Looser underwriting standards for agency-eligible adjustable-rate mortgages helped increase credit availability in August to its highest level since April, according to the Mortgage Bankers Association.
The Mortgage Credit Availability Index increased 0.7% to 180.2 for August from July's 179. The index was 164.7 for August 2016.
"Mortgage credit availability increased slightly in August, driven by the expansion of credit among conforming and agency jumbo programs," said Lynn Fisher, the MBA's vice president of research and economics.
"Following the same pattern as last month, agency-eligible adjustable-rate mortgage loan programs continued to be updated in August to allow for higher loan-to-value ratios, effectively increasing the availability of credit."
There was a 0.1% increase in government product — Federal Housing Administration, Veterans Affairs and U.S. Department of Agriculture Rural Development — availability in August compared with July.
The increase to August from July marked three months in a row and 10 out of the last 12 months where credit availability has expanded.
The conventional MCAI increased 1.5% over the previous month. There was an increase of 1.6% in the conforming loan MCAI, while the jumbo index increased by 1.4%. The conforming and jumbo indices are subsets of the conventional MCAI.
The base for the index is 100, established for March 2012. The index is calculated by the MBA using information from Ellie Mae's AllRegs Market Clarity database.