As FHA rate hikes go into effect, fewer apply for government-backed mortgages

Mortgage applications for home purchases declined nationwide last week as a long-anticipated hike in insurance premiums from the Federal Housing Administration took effect, according to data from the Mortgage Bankers Association through April 22. While applications for refinancing remained relatively steady — down 0.6 percent from the week earlier — purchase applications declined by 13.6 percent from the previous week, reaching their lowest level since February. That drop-off was driven by a 26.6 percent fall in government purchase applications, the MBA said. “This decrease reverses a 20 percent increase in government purchase applications over a four week period, which was likely driven by borrowers attempting to beat this [FHA premium] deadline,” said Michael Fratantoni, vice president of research and economics for the MBA. Interest rates also declined last week. The 30-year fixed-rate mortgage averaged 4.8 percent and the 15-year mortgage averaged 4.03 percent, down from 4.83 percent and 4.07 percent one week ago, respectively. TRD