The latest Mortgage Credit Availability Index (MCAI) report from the Mortgage Bankers Association says that mortgage credit availability increased in March 2015.

Based on data from Ellie Mae, the MCAI rose to 121.4, an indicator that mortgage credit is loosening. A finding under 100 means that lending standards are tightening.

Mike Fratantoni, MBA's Chief Economist, said there are a number of factors that contributed to the loosening of credit in March. Freddie Mac's introduced their 97 LTV program following Fannie Mae in December. Parameters expanded on jumbo loans and there was an increase in offerings of cash-out refinance loans. FHA and VA refinances were streamlined.

"As a result of these changes, all four component indexes of the MCAI increased last month: jumbo, conforming, conventional, and government," said Fratantoni. "Although credit remains tight by historical standards, this increase in availability, coupled with low rates and job market strength, should lead to stronger home purchase activity this spring."

In the last week in March, mortgage applications increased 4.6 percent from the week before on a seasonally adjusted basis, said the MBA. The Refinance Index increased 4 percent from the previous week while the Purchase Index increased 6 percent from one week earlier.

The unadjusted Purchase Index increased 6 percent compared with the previous week and was 8 percent higher than the same week a year ago. That could be a harbinger of a busy spring housing season.

Lynn Fisher, MBA's Vice President of Research and Economics said, "The increase in purchase volume was led by a nearly 6 percent increase in both conventional and government markets, perhaps signaling that households are finally ready to begin the home-buying season."

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.89 percent from 3.90 percent, with points and 20 percent down.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.90 percent from 3.89 percent, with points and 20 percent down.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.73 percent from 3.71 percent, with points for an 80 percent LTV loan.