Mortgage lenders reversed what had been a months-long decline in mortgage credit availability last month, new research from the Mortgage Bankers Association found, as the improving economy reduced risk. 

The MBA’s Mortgage Credit Availability Index (MCAI), which analyzes data from Ellie Mae, rose by 2.3 percent to 121.3 in October. The increase is the first seen since a small uptick in July, and the largest increase since credit availability tightened dramatically this spring as the COVID-19 pandemic struck the United States. 

Credit availability for conventional mortgages rose 5.1 percent, the availability of jumbo mortgages rose 6.1 percent and the availability of conforming loans rose 4.1 percent. However in a sign of lender caution around the lower end of the market – where the biggest employment losses of the COVID-19 recession have been concentrated – the availability of government-backed mortgages barely rose at all. 

“Credit availability increased in October for the first time since July. The ongoing economic recovery and improving labor market led to a rise in credit supply for various loan types,” MBA Associate Vice President of Economic and Industry Forecasting Joel Kan said in a statement. “There was an overall increase in credit availability for low credit score and higher LTV loans, with conventional credit supply increasing 5.1 percent, and government credit staying essentially flat. Despite October’s slight turnaround, credit availability remains constrained to near a low last seen in 2014.”