Apps for government-backed mortgages surge ahead of FHA premium hikes

U.S. mortgage refinance applications declined by 6.2 percent last week to their lowest level since February, while mortgage applications for purchase rose by 6.7 percent to their highest level of the year, according to new data from the Mortgage Bankers Association through April 1. The MBA said the rise in purchase applications was spurred by a 10.3 percent spike in applications for government loans from the week prior, which brought government loan applications to their highest level since May 2010. But while purchase volume was up last week, it “remains relatively low by historical standards, at levels last seen in 1997,” Michael Fratantoni, vice president of research and economics for the MBA, pointed out. Last week’s surge, he said, was likely due to borrowers who were “motivated to apply [for government loans] before a scheduled increase in FHA insurance premiums that became effective last Friday.” Interest rates, meanwhile, stayed relatively flat, with the 30-year fixed-rate mortgage at 4.93 percent, up from 4.92 percent one week earlier, and its 15-year counterpart at 4.14 percent, down from 4.16 percent in the previous week. TRD