The Real Deal Miami

FHA insurance premium hikes drive down mortgage apps: MBA

April 14, 2010 12:08PM

Mortgage loan application volume saw significant drops last week, down 9.6 overall and down 9 percent and 10.5 percent in the refinancing and purchasing sectors, respectively, according to data from the Mortgage Bankers Association for the week that ended April 9. The declines were driven largely by government purchase applications, the MBA said, which dropped 19.1 percent week-over-week. Conventional purchase applications dropped by just 2 percent during the same period. An increase in Federal Housing Administration mortgage insurance premiums was to blame for the decrease in applications for government mortgages, according to Mike Fratantoni, vice president of research and the economics for the MBA. In addition, mortgage interest rates spiked during the week prior, contributing to the decline in refinance application volume last week, Fratantoni said. The average contract interest rate for 30-year fixed-rate mortgages dropped back down to 5.17 percent from 5.31 percent by April 9. TRD