Mortgage Availability Improves in August

Mortgage availability improved slightly in August, giving homebuyers a better chance at entering the housing market. The Mortgage Bankers Association’s Mortgage Credit Availability Index rose by 0.1% in August, indicating that lending standards have loosened slightly. For conventional loans, the index grew even more by 0.3%. Meanwhile, the index tracking government-backed loans fell by 0.1% in August.

“Mortgage credit availability increased slightly in August, driven by a small increase in ARM product offerings, which was similar to what we saw in July,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “With mortgage rates declining, and some renewed application activity for both purchases and refinances, the demand for ARM loans has increased somewhat, although the overall level of ARM applications remains close to historically low levels. Overall industry capacity seems to have stabilized after some significant declines over the past few years as companies adjusted to a lower volume environment. Combined with recent economic uncertainty, those factors continue to keep credit supply relatively low.”