Mortgage activity took a slight breather last week, but applications for government-backed loans went on a tear after the government insurer of home loans lowered annual insurance premiums by half a percentage point.
The Federal Housing Administration accepts mortgages with down payments as low as 3.5 percent.
Conventional refinance volume was up only 0.5 percent for the week. FHA purchase applications were also up 12.4 percent, despite a decrease in purchase applications in the rest of the market
Clearly the drop in insurance premiums, while a bit less than a $100 monthly savings for the average borrower, is bringing more people back to the mortgage table, be it to refinance or buy a home. The added incentive of falling mortgage interest rates is not hurting either.
Combined, the two are not just providing savings, but giving buyers more purchasing power.The FHA share of total applications rose to 13.1 percent of total mortgage applications last week, up from 9.1 percent the previous week